Unexpected costs when building a house are not a welcome surprise. Of course, unforeseen challenges can often lead to extra expenses. But, in this case, we’re talking about the hidden costs of building a home that many people unknowingly overlook.
As a top North Shore custom home builder and renovator, we believe in clear communication and complete transparency. That means no hidden costs! So, to ensure you have all the information you need to start accurately planning and budgeting your custom home or renovation project, we’ve compiled a list of the most common unexpected costs when building a house.
Here’s what you need to know so you can expect the unexpected!
Table of Contents:
Cost Overview
Expect These Unexpected Costs
Prepare With A Contingency Fund
The Key to Avoiding Unexpected Costs
Build with Hasler Homes
Overview – Expect These Unexpected Costs When Building a House
Here’s a quick overview of the twelve most common hidden costs of building a house. Below, we’ll discuss each expense in more detail – so you know exactly what to expect.
- Surveying & Site Preparation Costs
- Permit, Inspection & Testing Fees
- Insurance
- Fixtures & Appliances
- Furniture & Decor
- Window Coverings
- Landscaping
- Utility Connections & Service Upgrades
- Change Orders
- Cost Increases
- Delays
- Moving Expenses
Please note: Our list of unexpected costs when building a house does not include land procurement. For this article, we’ll assume you already own the land you’ll be building on. If you still need to purchase land, this will be a considerable expense (especially in the Vancouver area – Vancouver, North Vancouver, West Vancouver, Squamish, Burnaby, etc.) that you’ll need to add to your budget. There may also be unexpected costs associated with buying land, such as land surveys, title searches, and other legal fees and closing costs.
12 Unexpected Costs When Building a House Explained
Before we jump into the hidden costs of building a home, it’s important to note that some of these expenses will be included in the price quoted by your builder. A good home builder will be transparent and communicate all known costs upfront. So, if you’re unsure whether certain expenses are included, be sure to ask!
1. Surveying & Site Preparation Costs
Before your home builder can start construction, your land must be surveyed and prepared for development. These hidden costs of building a custom home are often significant and may include clearing trees, excavating and grading the site (including bringing in or removing dirt), demolishing old structures, removing debris, etc.
In some cases, surprises (and extra costs) can also arise if there are hidden items on your property. For example, we have seen older homes with hidden objects like oil tanks and buried logs (which were used to build up the land). These items can cause problems and, therefore, must be removed – resulting in unexpected costs.
Depending on the location of your property, you may also encounter added costs associated with securing the building site and providing road access suitable for construction equipment. For example, the BC Building Code requires residential construction sites to have a fence or barricade when construction (or demolition) may pose a hazard to the public. Therefore, you may need to pay for temporary fencing to surround your property.
These unexpected costs when building a house can add thousands of dollars to your project. However, the total cost will depend on lot size, location, slope, soil conditions, and other factors.
IMPORTANT TO NOTE: A full-service Vancouver custom home builder like Hasler Homes will include surveying and site preparation costs in your project quote. If you’re unsure whether your builder has included these expenses in their pricing, be sure to ask!
2. Permits, Inspections & Testing
Whether you’re building or renovating a home, your project will require various permits and inspections. For example, if you’re building in Burnaby, you may need the following permits: demolition, building, electrical, forced air heating, gas, and plumbing and hydronic heating.
The cost of permits varies depending on location and the construction value of the project. But, in most cases, permit fees for a new custom home or large-scale renovation in Metro Vancouver will be thousands or tens of thousands of dollars.
During the permit process, your city’s building department will review your project plans to make sure they meet all applicable requirements. They’ll also determine whether your project requires engineering involvement. If it does, this can add thousands of dollars in extra costs.
Your new home will also require inspections throughout the building process to ensure it meets local safety and building codes. For instance, in North Vancouver, a new, single-family home requires the following inspections: pre-construction, erosion and sediment control, footings and forms, site servicing, underground and underslab, electrical and mechanical rough-in, framing, insulation and vapour barrier, final electrical and mechanical inspections, final building inspection and a boulevard restoration review.
While the cost of these inspections is typically covered in your permit fees, failing an inspection can result in costly changes. Therefore, it’s important to hire the right builder.
Want to make sure you hire a good contractor? Learn how to choose a home builder.
To comply with the BC Energy Step Code, your home must also meet (or exceed) efficiency standards for its building envelope, airtightness, and systems and equipment. Therefore, your project will require energy-efficiency testing. These unexpected costs when building a house can range from hundreds to thousands of dollars.
That said, government rebates may be available to help offset testing costs. For example, the BC government offers various rebates for new home construction through programs like FortisBC’s New Home Program and the CleanBC Better Homes program. These rebates can range from $1,000 to $8,000. Talk to a builder to learn what rebates may be applicable to your project.
IMPORTANT TO NOTE: Some Vancouver home builders, like Hasler Homes, will include the cost of permits, inspections, and energy-efficiency testing in their quotes. But be sure to verify with your contractor whether these expenses are included.
3. Insurance
Building a home is one of the most significant investments you’ll make. Therefore, it’s essential to protect your home from potential risks – both while it’s under construction and once complete. So, while insurance costs may be considered hidden costs of building a home, they’re necessary to protect your investment.
Top builders, like Hasler Homes, work with reliable insurance companies, like Travelers Insurance, to provide financial protection and coverage against various risks and unforeseen events when building a new custom home. In addition, Hasler’s partnership with 2-5-10 Year Warranty offers mandatory home warranty insurance that provides protection and coverage for any major structural defects.
IMPORTANT TO NOTE: In some cases, your homebuilder will include the cost of necessary construction insurance and mandatory home warranty insurance in their quote. However, once the project is complete, you’ll need to purchase regular home insurance from your preferred insurer.
**At Hasler Homes, we offer our clients the option of getting their own construction insurance. We provide this option because purchasing construction insurance as a homeowner is typically cheaper – since the homeowner is not a company.**
4. Fixtures & Appliances
In most cases, when building a custom home, you’ll need to purchase new fixtures and appliances. These unexpected costs when building a house are often overlooked but can add up quickly! For example, you’ll need bathroom fixtures, lighting, kitchen appliances, and home comfort appliances like HVAC, air filtration and ventilation systems.
The total cost for fixtures and appliances can vary considerably depending on your needs, preferences, quality standards, and required energy efficiency. Therefore, it’s essential to budget for these necessities according to your specific requirements.
IMPORTANT TO NOTE: A full-service home builder can help you budget for these items and can even offer different options at various price points. The cost of fixtures and appliances is typically included in a home builder’s quote under “allowances.” This means the contractor sets a general budget for the items, but the total cost is not fixed. The homeowner must pay the final amount, even if it exceeds the allowance.
**At Hasler Homes, we let our clients know these costs beforehand (e.g., high, medium, low) so they are aware and not blindsided.**
5. Furniture & Decor
Many people also overlook the cost of furniture and home decor when budgeting for their new build or renovation. New furniture and decor can be costly, depending on your style and how many items your home requires.
Again, hiring a professional home builder will ensure that these details are not overlooked in your budget!
IMPORTANT TO NOTE: If requested, a design-build company can include these extra costs when building a house in your quote under “allowances” and can even help you choose options that fit your style and budget.
**At Hasler Homes, we work with professional, award-winning interior designers and can offer various options and price points to suit your needs.**
6. Window Coverings
One of the biggest unexpected costs when building a house is the cost of window coverings. Window coverings can be expensive due to several factors, including the cost of high-quality materials, customization and sizing, brand reputation, and specialty features. The price also depends on the type of window covering, the size of the windows, and the complexity of the installation. That said, even without customizations, this “hidden” cost of building a home can add up to thousands of dollars.
IMPORTANT TO NOTE: While the cost of window coverings is not typically included in a home builder’s quote, it can be added upon request.
7. Landscaping
During the initial stages of planning a custom home, most homeowners are focused on the house itself – the number of rooms, features, building materials, etc. As a result, they often forget about landscaping costs. But your stunning new custom home won’t look (or feel) complete without gorgeous landscaping!
The cost of everyday landscaping items, like trees, plants, grass, and rock, is anticipated. However, other landscaping costs, like grading, planting, irrigation, and hardscaping (such as pathways and retaining walls), are easy to overlook. And these hidden costs of building a home can add up – especially if you have a big yard or want to add custom features.
Another extra cost when building a house that many homeowners aren’t aware of is boulevard restoration. During the permitting process, your city’s building department will outline any requirements for boulevard restoration. In most cases, local governments require you to restore any city property affected during construction to its original condition.
IMPORTANT TO NOTE: Some builders will include landscaping costs in their pricing, while others will leave it up to you to find and hire a landscaper. Be sure to ask about this when interviewing builders – so you can select a contractor that’s right for you.
**At Hasler Homes, we offer our clients different options depending on their needs and preferences. For those looking to include landscaping as a part of their project, we have close relationships with exceptional landscapers in Vancouver and can provide different options at various price points. We also include the cost of boulevard restoration in our landscaping budget, as the local government covers curbs and connections in their fees.**
8. Utility Connections & Service Upgrades
To function properly, your new home must be connected to utilities, including electricity, gas, water and sewage. But many people forget about this step, resulting in unexpected costs when building a house that can range from hundreds to thousands of dollars.
The total cost to connect to utilities will vary depending on where your home is located, whether your land already has utility hookups, and if connection points need to be extended. If you require hookups or connection extensions (e.g., additional trenching for utilities), need to install a septic system, or have other special requirements for your home, this cost can increase significantly.
In some cases, there may also be extra costs if your services need to be upgraded. For example, if you require more power than is currently available, your services will need to be upgraded (e.g., a new transformer must be installed).
IMPORTANT TO NOTE: In most cases, home builders do not include the cost of utility connections and service upgrades in their quotes. Instead, the subtrades will get approximate pricing when the client calls in to approve BC Hydro or Fortis Gas connections.
9. Change Orders
Change orders (requests to change your original, finalized project plans or specifications) can also result in unexpected costs. In some cases, these costs can be significant, especially if they are architectural or design changes. For example, if you decide you’d like to change the size of your kitchen, this can result in a significant increase in costs – both for materials and labour.
To minimize (or eliminate) these unexpected costs when building a house, plan thoroughly and finalize all design details before construction begins, maintain good communication with your builder, and try to avoid last-minute changes.
10. Unexpected Cost Increases When Building a House
There’s also the potential of costs changing throughout the building process. This can result from upgrades needed due to changes in the building code, increases in material costs, etc.
For example, a recent update to the BC Building Code requires new houses to have a radon rough-in installed. Depending on the stage your project was at when this update was implemented, you may have been required to incorporate this new system into your home at an additional, unexpected cost.
The best way to prepare for the hidden costs of building a custom home like this is with a contingency fund. More on this below (including our recommendation for how much you should set aside in your contingency fund).
11. Delays
Various unforeseen circumstances can cause delays during your project—weather delays, material shortages, etc.
Delays can result in unexpected costs when building a house, as they can extend the construction schedule, increase labour requirements, and postpone your move-in date (which can affect costs like living expenses).
Again, the best way to prepare for these extra costs when building a house is with a contingency fund.
12. Moving Expenses
Remember, once your new home is complete, you’ll need to move in! Depending on how far you’re going and whether you hire professional movers, you could be looking at thousands of dollars in extra costs. Therefore, this is another component of building a house that is often overlooked but should be included in your budget.
IMPORTANT TO NOTE: Generally, Vancouver home builders don’t include moving expenses in their quotes.
**At Hasler Homes, we leave moving costs up to the client – so they can decide which option is right for them.**
It’s essential that you consider ALL of the costs discussed above to create a realistic budget for your custom home. Hiring an honest builder is another key to a successful project. Working with a good builder will ensure you avoid any hidden costs when building a house and help you minimize unexpected expenses. On top of this, the best way to ensure you stay on budget is with the help of a contingency fund.
Prepare for Unexpected Costs When Building a House With A Contingency Fund
One of the best ways to prepare for unexpected costs when building a house is by setting up a contingency fund. A contingency fund is money that is set aside for unexpected expenses or unforeseen events that may arise during the building process.
Not only will a contingency fund help you stay on budget, but it will also provide you with peace of mind, knowing you have the funds to cover any extra costs when building a house.
CONTINGENCY FUND RECOMMENDATION: At Hasler Homes, for new builds, we recommend establishing a contingency fund equal to 5% to 7% of your total construction budget – as long as you have completed the full scope with designers and architects before the build begins.
For renovations, we recommend a contingency fund of 20% to 30% of your budget, depending on how high-end the reno will be.
The Key to Avoiding Unexpected Costs – Hire an Experienced Vancouver Home Builder
Want to avoid the hidden costs of building a home as much as possible? Hire a local, experienced builder that prioritizes communication and transparency.
Working with an experienced builder early in the home-building process can help you minimize extra costs when building a house. The best builders in Vancouver, including Hasler Homes, will help you set a realistic budget and (through experience and specialized tools) keep your project on time and on budget.
Don’t Settle for Unexpected – Build with Hasler
Ready to build your dream home? Hasler Homes is here to help you every step of the way!
Known for our integrity, transparency and open, honest communication, Hasler Homes is a top-choice home builder serving Vancouver, North Vancouver, West Vancouver, Squamish, Burnaby and beyond! Best of all, we’ve been in the home building business for years – first building and renovating our own homes and then doing the same for others – so we know a thing or two about the costs (expected and unexpected) involved.
Call, email or message us today and let’s discuss your project!
Phone: 778 688 7846
Email: info@haslerhomes.ca
Contact Form: https://haslerhomes.ca/contact/
