As Graham Builders vice president of operations, Ryan Graham, has seen many situations in which hidden construction costs catch homeowners completely off-guard, delaying projects and sometimes derailing them completely.

“Building or renovating a house involves more than just the obvious costs, like materials and labor,” he says. “It’s really important to account for all potential expenses before diving in.”

Permitting and fees: Obtaining permits and paying fees for design, engineering, surveys and utilities can add up quickly.

Tip: Ask your builder for a list of pre-construction fees. Experienced builders can anticipate them and provide a rough estimate of their total.

FYI: “Graham Builders provides each client with a detailed list of fees, relative to the scope of work, that they will incur prior to any design or construction,” Graham says.

 Rental property/storage: If you’re planning a major remodel or new build, you’ll probably need to include the cost of a rental home in your budget.

“Some homeowners want to stay in their homes during major remodels, not realizing how challenging that can be,” says Graham. “If you’re doing a kitchen or bath remodel, how will you cook and clean for your family?”

Tip: Graham recommends discussing your plans with your contractor before starting your project. Research storage facilities for furnishings you won’t need. Start looking for rental properties early, at least six months before your project begins, and obtain a construction schedule from your builder to determine the length of your lease.

FYI: Graham Builders works with realtors who have experience assisting clients with short-term rentals.

Unexpected costs/hidden defects: During remodels or additions, hidden issues like water and termite damage, antiquated wiring and corroded plumbing could add significant costs to your project.

“Some repairs require multiple trades,” Graham says. “For example, replacing old electrical wiring requires drywall removal and replacement, light fixture replacement, and painting.”

Tip: Create a contingency fund that’s not part of your total construction budget. Ask your contractor about potential hidden costs and a reasonable amount for the fund, relative to the age and condition of your home, and the scope of work.

FYI: As standard practice, the Graham Builders team always carefully inspects and accounts for the condition of each home it remodels, and advises clients of appropriate contingency allowances for potential hidden defects.

Site work/blue rock excavation: Land preparation for your project could include major excavation, grading and utility connection.

“Sloping lots might need retaining or stem walls, mass excavation to remove clay soils, or drainage,” explains Graham. Blue rock removal can be tedious and time-consuming, and add significant cost to your project. And it cannot be quantified if it’s below grade (underground), so obtaining an accurate estimate is difficult.

Tip: Obtain a soils report. The report will alert your contractor or engineer to the appropriate amount of excavation, backfill and the presence of blue rock. Ask your contractor about their experience with similar projects and costs, and set aside an allowance to cover removal.

FYI: In the earliest stages of every project, Graham Builders’ design team considers topography, site location and design layout to determine site requirements.

“We communicate these costs to our homeowners, and account for them in the budget, to avoid surprises during construction,” Graham says.

Landscaping and outdoor living: Sometimes, homeowners forget to include landscaping and outdoor living areas in their projects. Those add costs, too.

Tip: Before starting design or construction, plan your landscape with a landscape architect or via DIY layout. You’ll have to estimate your own costs or obtain them from your contractor.

FYI: Graham Builders’ design team carefully configures home and addition layouts to accommodate each client’s landscaping plans.

Financing costs: Financing for a new construction project often comes with additional costs like closing costs, origination fees and appraisal fees.

Tip: Explore your financing options. Find a mortgage broker who will provide multiple lending options.

FYI: Graham Builders works with a mortgage broker that provides financing for its clients.

“It’s essential to consider all the potential hidden costs before starting your project to ensure that there are no surprises along the way,” concludes Graham. “An experienced firm that anticipates these costs on your behalf can save you thousands of dollars in the long run.”

Honolulu design/build company Graham Builders is the recipient of the Better Business Bureau of Hawaii Torch Award for ethics in small business. Learn more about the basics of home remodeling and rebuilding at Graham Builders’ free Building Your Home for Life seminar from 9 to 11 a.m. on June 3. For information and registration, visit or call 808-593-2808.

CONTACT 808-593-2808