If you’re considering a new home build or significant remodel, you likely know that proper preparation is critical. The cost of such an undertaking is often second only to your purchase of the property itself. As licensed architects and general contractors, we’ve seen the countless mistakes that homeowners make when embarking on a major home construction project here in Los Angeles. 

Fortunately, knowledge is power. After we break down our Top 7 Home Building Mistakes, you'll have the tools to avoid these common financial pitfalls: 

1. Hiring an Architect Who Blows Your Budget 
2. Hiring the Cheapest Contractor 
3. Interior DIY: Taking on Finish & Fixture Selections Yourself
4. Not Defining Your Scope & Budget at the Start
5. Choosing to Act as an Owner-Builder 
6. Not Including Your Architect in the Construction Process
7. Not Considering Your Team’s Experience 

‍Mistake #1: Hiring an Architect Who Blows Your Budget‍

An architect should know your budget from the very beginning of the design process. They should be working directly with a licensed contractor, a cost estimator, and an interior designer to accurately assess your project’s risks, establish realistic timelines, and schedule important material selections. Inexperienced architects and designers may not know the right questions to ask or realize how working closely with other professionals can avoid challenges that lead to budget overruns.

Working with an architect who doesn’t collaborate with other industry professionals can lead to:

• The creation of a design that meets all of your wants and needs, but can’t be built within your means
• Your project being put on hold indefinitely because of failure to account for soft costs like surveys, engineering, plan check, or permitting fees
• Losing out on custom details like finishes, fixtures, and appliances that you had your heart set on due to market fluctuations in material costs and availability

Here’s an example:

Let’s say you want to remodel your home and add a second story. You find an architect to create a design that will include a new primary suite, stairs, and a hallway for access. These renovations will add 800 square feet, and the architect estimates the cost at roughly $400 per square foot, setting the budget at $320,000. That seems reasonable, so you hire them to design it, permit the work, and prepare a bid set for contractors.

But when you start receiving bids back, the lowest construction bid is at $575,000! And this doesn’t even include finishes and fixtures for your primary bath, flooring, or soft costs - the architect’s fees, engineering fees, permitting costs, inspection fees, the interior designer’s work, or your moving costs for the duration of the remodel and addition. The other key issue here is that initial estimate from your architect did not include the other areas of the home that would be affected. When you finally add up all of these costs yourself, you realize that what you thought was going to cost $320k will now set you back more than twice that. OUCH.

Could you have avoided getting into this predicament? Absolutely.

Best Practices to Prevent this Mistake: 

Early Discussions

As you interview potential architects, make sure to clearly discuss your budget. Be clear about what you expect to be included, and keep an open mind if some things need to be adjusted to meet your costs. This will set the groundwork for realistic designs and limit future misunderstandings and frustration. Ask your architect how they estimate total project costs and for the details they consider as they build their budgets. Do they perform regular budget checks throughout the course of the project? How do they prevent scope creep and handle requests that are not possible within your budget?

Regular Check-ins 

Regular check-ins can help keep the design within budget as it evolves. Make sure that your architect communicates with you regarding changes that affect your budget, such as expensive steel work or custom features.

Transparent Budget Conversations 

Discuss pricing for hard and soft costs at different stages of design. This can help you understand where your all-in project costs will land and allow you to take corrective actions early to avoid cost overruns. How does your architect track project budgets? Will they select your finishes and fixtures, and if so, how do they budget for those, as they can get expensive quickly?

For a deeper look into managing architectural costs, check out our article that covers everything you should know when it comes to making sense of the different types of architectural bids and fees.‍

Mistake #2: Hiring the Cheapest Contractor

Hiring the cheapest contractor often leads to more problems than savings. Undervaluing this key decision may lead to issues such as omissions, change orders, modifications to essential design elements for cost-cutting, the use of inferior materials, or hiring unlicensed trades. Ultimately, this could result in a home that does not match the carefully crafted design envisioned with your architect, compromising the quality and success of your project, and the investment of your hard-earned money.

The Dangers of Choosing the Lowest Bidder

A contractor who bids too low may mean that: 

• Inferior materials and installation methods for items such as roofing, windows and doors, and flooring could be used. These may not hold up over time and need to be replaced. It’s never advisable to cut corners when selecting components that need to be durable and stand the test of time.
• The contractor may expect you to pick and purchase finishes and fixtures, or include only the cheapest options, leaving opportunity for costs to skyrocket later.
• Reduced costs could result in failed inspections and delays which create added costs. If installations are not made to code, the cheaper contractor you chose will need to redo work to pass inspections and is likely to hit you with a change order.
• Improper waterproofing and poor tile installation are other possible issues. For example, instead of floating the walls, a cheap contractor might install a backer board, causing tiles not to be level and leaving slivers in corners.
• Excessive change orders due to underbidding are also common. Cheap contractors often intentionally omit important items from their bids to come in lower than other bidders. 

Here’s an example:

You sign on the lowest bidder, feeling like you’ve gotten a bargain and excited to have saved some money. Unfortunately, from day one it’s a disaster. Inexperienced framing crews lead to a long list of structural corrections during city inspections. Electrical work fails inspections repeatedly as well. Mold remediation becomes necessary because of improper waterproofing, costing an additional $15,000. The promised six-month project drags on for nearly two years, resulting in over $100,000 in unexpected expenses. Finally, you fire the low bidding contractor and hire a reputable firm. By then, you have spent almost double correcting mistakes—an additional $300,000 beyond your initial budget, and years of frustration, stress, and rental fees.

So Where Did You Go Wrong?:

Quality vs. Cost Trade-offs

High-quality materials and skilled labor are essential to build a durable, well-constructed home. Choosing a contractor based solely on the lowest price can compromise the integrity of your home and lead to costly repairs or renovations in the future. You can read more in our blog that explains why seeking a build that's cheap, quick and high in quality is not a realistic dream.

Long-term Costs 

A contractor who cuts corners might save you money initially, but the cost of fixing poor workmanship or replacing inferior materials can far exceed any initial savings. It’s crucial to select a contractor with a proven track record of quality and reliability.

Best Practices to Prevent This Mistake: ‍

Be Thorough In Your Hiring Process

On the flip side, just because a contractor submits the highest bid does not mean that they are necessarily more qualified or have an all-inclusive bid. You will want to make sure that you are conducting thorough interviews, and working with a contractor who comes recommended by friends or family members who have been happy with work on their own homes. As an alternative, you can lean on your architect to recommend contractors who they have worked with and have had a great experience with. 

Pay Close Attention to Your Contractor’s Process

Make sure that qualified contractors are bidding early and often, and track your budget to carefully plan for items they may be excluding. Continue to get itemized bids and compare apples to apples between the scope of work being offered with each bid. While a contractor's bid might seem high, it may actually be fair and reasonable compared to others who have excluded key elements in an effort to win your business now and stack on costs via change orders later.

Work with a Design Build Firm

And of course, you can turn to Letter Four, Inc., where we provide both licensed architectural and construction services in-house in the Los Angeles area. This means that you get a streamlined process with transparent and inclusive bidding, with one team who remains accountable from start to finish. With us, you get peace of mind that we have done this time and time again, with a proven track record of assessing project costs up front and working within strict budgets. We will bid your project three times through the course of our architectural work and we constantly and transparently monitor your project budget at all times. Check out our CLEAR 4-Step Process for more information.

Mistake #3: Taking on Finish & Fixture Selection Yourself

While DIY projects can be rewarding, taking on these selections without professional help can lead to underestimating the complexities of space planning, incorrect material quantities and/or parts, selection of subpar materials, and difficulty coordinating installations. 

Common Problems: 

• An unrealistic budget
• Lack of expertise and knowing which questions to ask and when 
• An inability to foresee possible hiccups or opportunities for miscommunications
• Selecting materials based on price rather than quality, requiring earlier replacement 
• Professionals may get discounts from relationships that you won’t get
• Undue stress from underestimating project complexity 
• Incorrect measurements and ineffective space planning 
• Knowing which elements of a renovation bring the highest impact to your home value
• Not properly vetting subcontractors 

Let’s Walk through an Example:

Say you plan to renovate your primary bathroom and set a budget of $20,000, including contractor fees. As the project progresses, you realize you didn't prepare an accurate budget before placing orders. Maybe you decided to have your double vanity cabinet custom made rather than finding something off-the-shelf. This vanity could have cost you $3,500 or less, but the custom cabinetry is $4,000, plus you need to purchase a full slab for the counter, two sinks, faucets, and drains. Now you’ve spent half of your budget on the vanity alone, and don’t have money for the soaking tub of your dreams.

Now you need to cut costs and scope in other areas to make up for overspending on the vanity. The custom vanity has added six weeks of additional time, so you need to keep your rental for another two months, adding $16,000 to your budget. The primary bathroom, expected to cost $20k, now costs over $50k because you refused to use a professional, and you’ve added unnecessary stress to your life.

Best Practices to Prevent This Mistake: 

Benefits of Working with Professional Designers

Professional designers have access to exclusive discounts on materials and labor, ensuring high-quality finishes while typically reducing overall costs. Their expertise in aesthetics and functionality is invaluable in achieving a cohesive and beautiful home interior. Professionals bring expertise in project planning, access to quality resources, and the ability to manage unforeseen issues efficiently. They ensure a cohesive design and save time and stress, ultimately preventing the costly mistakes you’re likely to otherwise encounter. Their experience underscores that the hidden costs of DIY—financial strain and emotional toll—often outweigh the perceived savings, making professional help a more effective and less stressful solution for achieving a dream home.

Mistake #4: Not Defining Your Scope & Budget at the Start

Initiating a construction project without a well-defined scope and budget sets the stage for complications. Midway through the project, you might discover a desire for additional features or upgrades, leading to budget overruns and delays. Comprehensive planning at the outset is crucial to avoid these pitfalls and keep the project on track. 

Cost Implications of After-the-Fact Changes

Unexpected expenses can rapidly accumulate during a construction project without careful planning. For instance, a homeowner who added custom cabinetry mid-project faces hidden costs and logistical challenges, such as ordering additional materials and coordinating new schedules with contractors. 

Now Let’s Look at an Example: 

For example, consider a homeowner who began a kitchen renovation with an initial budget of $80,000 using RTI (Ready To Assemble) cabinets and manufactured countertops. Midway through the project, they decided to switch to custom cabinetry, natural stone countertops, and high-end appliances, upgrades that were not part of the original scope. The introduction of custom cabinetry meant that not only were there increased fabrication and finishing costs, but the plumbing and electrical locations needed to be reconfigured based on the custom layout. The higher end cabinets, finishes, and appliances increased the budget by $80,000+ and extended the timeline by three months!

Best Practices to Prevent This Mistake: 

Develop an Action Plan

At Letter Four, Inc., we start every project with a comprehensive Action Plan that dives into specific site conditions and your needs. Establishing a realistic budget, timeline, and scope of work from the beginning minimizes setbacks, clarifies project parameters, and reduces the likelihood of missed items and added costs. This initial step involves robust Due Diligence, creating a Conceptual Design that aligns with your vision, and determining an all-inclusive budget. A comprehensive plan ensures that you’ve made design decisions early. You know what your project is going to look like, what's included in your scope of work, and how much it's going to cost. You’ve weighed your options and have made educated decisions on how best to move forward. As a result, you’re able to avoid or eliminate costly changes down the road.

Detailed initial planning, exemplified by the successful strategies at Letter Four, Inc., helps to avoid unexpected expenses, aligns all involved parties towards a common goal, and leads to a more efficient and cost-effective project completion. 

Mistake #5: Choosing to Act as Owner-Builder

Opting to act as an owner-builder can seem like a cost-effective decision, but results in substantial responsibilities and significant risks. Coordinating subcontractors, managing inspections, ensuring compliance with building codes, and managing project accounting are intricate tasks that require knowledge, experience, and meticulous attention. Errors in these areas can lead to substandard work, costly delays, expensive rework, and of course budget overruns.

Let’s Walk through an Example:

Let’s say that you plan to act as owner-builder to save on the contractor’s 20% mark-up. The contractor’s bid for your remodel came to $1M. So, you’re expecting to save $166k. Let’s conservatively break down the costs you’ll need to cover what would normally be part of the contractor’s $1M contract:

How A Contractor Would Bill:
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‍What Your Cost Would Be If You Act As Owner-Builder:
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The result: The $1M budget that was quoted by a licensed, experienced general contractor is now close to $200k+ more and you’ve taken on an immeasurable amount of stress and the quality level of your home isn’t up to par due to your inexperience.

Common Problems When You Act As Owner-Builder: 

Framing Problems

One common mistake during the construction process is failing to thoroughly review the framer’s work and relying solely on city inspectors or engineers. While inspectors ensure general compliance, they are not in charge of ensuring the quality of the work, that’s the General Contractor’s responsibility — Or yours, should you choose to act as Owner-Builder. The consequence of this oversight is the potential development of structural weaknesses, which can lead to cracks in drywall or floor finishes, ultimately requiring costly reinforcements and repairs.

Electrical Wiring Errors

Incorrect installation or connection of electrical wiring is another frequent issue, often arising from using substandard materials. The consequences of such errors are severe, ranging from electrical fires to electrocution hazards or frequent power outages. To resolve these issues, extensive and expensive rewiring by a professional electrician may be necessary.

Plumbing Issues

Plumbing mistakes, such as improper pipe connections or inadequate sealing, can lead to significant problems. Poor installation can cause leaks, water damage, mold growth, and even structural damage. Repairing these issues typically demands significant remediation efforts and additional costs.

Improper Insulation and Ventilation

Installing insulation or ventilation systems incorrectly is another costly error. This can lead to insufficient thermal regulation, resulting in high energy bills, uncomfortable living conditions, and moisture-related issues like condensation and mold growth. Upgrading or replacing these systems to restore efficiency often becomes necessary.

Work Sequencing

Incorrect work sequencing or scheduling overlapping trades is another major pitfall when you act as Owner-Builder. Poor coordination can cause trades to interfere with one another, leading to inefficiencies, rework, and increased labor costs. This will extend the overall project timeline and unnecessarily increase labor, material, and rental costs.

Waste Management

Neglecting proper waste management, such as failing to sort and recycle construction waste, is a common oversight. This can lead to increased disposal costs, environmental penalties, and a negative impact on sustainability efforts, all of which harm the project’s environmental and financial outcomes.

Best Practices to Prevent This Mistake: 

Hire a Professional Licensed Contractor

Expert Oversight
‍Hiring a licensed General Contractor alleviates the burden of day-to-day operations. They handle subcontractor coordination, budget management, and scheduling, ensuring smoother construction progress. They know how your home needs to come together and take responsibility for warranties and quality. They are required to follow CSLB (California’s Contractor’s State Licenscing Board) regulations to protect you as homeowner.

Risk Mitigation
‍Their experience reduces the likelihood of costly errors and regulatory violations, providing peace of mind throughout the project.

Engaging a professional General Contractor, like Letter Four, not only alleviates the logistical burden but also mitigates risks, ensuring smooth operations and compliance with regulations. Avoiding errors, such as incomplete permits, can prevent costly delays and legal penalties, ultimately contributing to a more efficient and financially sound construction project.

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Mistake #6: Not Keeping Your Architect On Board During Construction

When construction begins without your architect’s involvement, misunderstandings in plans or unexpected site conditions can lead to costly errors or deviations from your original vision. By keeping your architect engaged throughout the construction phase, you benefit from their expertise in resolving design challenges. This approach helps maintain the integrity of your project’s design and reduces the risk of expensive mistakes. Your architect will guide you through the construction phase and watch out for your best interests when your contractor submits invoices and change orders, and suggests design changes or materials for cost savings.

An Example: 

A homeowner hired an architect to design a home renovation, but decided to part ways once permits were approved, relying solely on the contractor to handle the project from there on out. As construction progressed, the contractor faced unforeseen issues. Permit drawings are not Construction Documents and lacked details like tile layouts, sconce locations, cabinet configurations, lighting and power plans, and so much more! As a result, the contractor did not have a complete set of drawings to build from. They decided to make assumptions to the detriment of the project, as they’re not an architect, afterall. They pick finishes and fixtures because nothing was specified, and they select the cheapest options, which don't match, and aren't in line with your design aesthetic. Things like cabinet layouts, lighting designs, molding profiles, and more are at odds with each other, and you’ve been billed for change order after change order because the bid was based on an incomplete set of drawings. You fired your architect, so they're not there to help you with aesthetic selections as they are made, and are not there to review the contractor's invoices. Now you've spent a lot more money just to end up with a final product that doesn’t match your goals or expectations, and your home feels like a spec home, not the custom home you envisioned.

Common Problems: 

• Incomplete drawings that don’t account for important final touches like lighting and power layouts, tile details, casing and trim, flooring, etc. 
• A contractor who makes assumptions of your final design goals, resulting in a home that’s cookie-cutter
• Change orders and associated invoices that stem from additional, unforeseen work, that you’re forced to approve, not knowing whether the pricing is fair
• Major delays while you scramble to work through details that your architect would have handled
• Stress and missed working hours because you need to go to site at least weekly to make sure that the contractor’s work is progressing and that you’re making the design decisions that your architect would have made
• Sub-standard quality and final installation details because you’re not an architect, and neither is your contractor, you don’t have the design eye and this is your first time building a home

Why An Architect Is Essential: 

Smooth Process

When you involve the architect throughout construction, they perform routine checks that will help them to identify and adjust designs and specifications in real-time when discrepancies or roadblocks inevitably arise. This ongoing collaboration minimizes disruptions and keeps the project moving forward smoothly.

Checks and Balances

It’s standard practice for your architect to review contractor bills and change orders and protect you from overcharges and errors. This fail-safe keeps you on-budget and makes sure that the work meets quality standards and building codes. Their in-depth level of involvement will be endlessly valuable.

Design and Installation Details

Your architect has design standards and details that they’ve worked years to perfect. They know whether to use buillnose or Schluter to trim out your tile. They know what countertop material is going to be best for the wear and tear your family will subject the material to. They know how to properly layout lighting so that light levels are consistent throughout your home and properly illuminate your art. And, they’ll consider where to locate things like floor outlets and USB chargers so that you don’t have to run unsightly extension cords to charge your devices and power reading lamps.

Mistake #7: Not Following Your Professional’s Processes

Each firm has their own process to work through design and construction. Disregarding the established processes of the firm you choose to work with can lead to miscommunication, errors, and rework. Adhering to the company’s procedures provides you with a more efficient and cost-effective design and construction process.

Let’s Look at an Example: 

The Fallout of Bypassing Protocol

Imagine embarking on the journey of building your dream home with a reputable Design-Build firm. Initially, excitement fuels your decisions, but challenges arise when you start to directly engage with consultants and subcontractors and make unauthorized design changes. 

You decide to change the roof structure and ask the structural engineer to re-engineer without consulting your architect. Now the plans are now coordinated and the architectural and structural drawings don’t match. Your architect needs to redo their drawings and charges for additional services to do so. This takes more time and costs you more money. You contacted the framer who was building the project directly, outside of your contractor and, as the architectural and structural drawings don’t match, they frame your home incorrectly and need to redo work. 

Cutting out your design-build team leads to a cascade of issues—miscommunication, errors, and extensive rework. The budget swells by $50,000, and completion is delayed by three months. 

Upon returning to the firm's structured protocols, a remarkable transformation occurs. Communication becomes clearer, and coordination among all involved parties improves significantly. This shift not only halts further delays and cost escalations, but also restores confidence in your project's trajectory. The experience vividly underscores the advantages of a Design-Build approach, where cohesive teamwork between designers and builders minimizes stress and ensures seamless execution.

Here’s an Analogy:

You buy a plane ticket to fly across the country. You know where you're going, but you would never try to fly the plane yourself. Not following your architect or design-builder's process is like buying a plane ticket and then trying to fly the plane yourself!

Common Issues When You Don’t Follow Your Firm’s Processes or Try to Take The Lead Yourself

• Making changes with vendors directly that are not up to code 
• Hiring cheaper, less experienced vendors 
• Trying to skip steps that you'll have to go back and complete anyway 
• City fines when they discover unpermited work
• Mismatched fixtures 
• Inconsistencies in the final design 
• Deviation from the original goals and hence subpar final results for the project

Best Practices to Prevent This Mistake: 

Early and Frequent Bidding

By involving contractors from the project's inception within the Design-Build framework, you get timely bidding processes and accurate cost estimates. Proactive engagement secures competitive pricing and establishes a solid foundation for efficient project management. It mitigates risks associated with delayed procurement and unforeseen expenses, thus avoiding the budget overruns and delays experienced when protocols were bypassed.

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Clear Communication, Fewer Delays

Similarly, within Letter Four’s emphasis on constant communication, the scenario of miscommunication and errors from bypassing protocols is negated. This commitment to following the proper process and addressing changes early minimizes delays, re-work, and additional services charges, and provides for a well coordinated design and positive experience throughout the design and construction of your new home.

Wrap Up

With over 14 years in the industry, Letter Four, Inc. can provide you with the assistance you need to enjoy every phase of your project, ensuring no detail is overlooked. To learn more about our step-by-step approach, check our Clear 4-Step Process.

By addressing these common mistakes and incorporating professional guidance from experienced firms like Letter Four, Inc., you mitigate risks, streamline the construction process, and achieve desired outcomes within budget. The stress saved by working with a dedicated team who understands the intricacies of home building is invaluable. With Letter Four, you don’t just build a house—you create a home with confidence and peace of mind. Book a call with us today to put the wheels in motion on your next project!