Many family houses end up costing more than the first quote suggested. That is not a law of nature, and it is not always a sign of a dishonest builder. Cost overruns on a build have a handful of recurring sources, and most of them are visible before the contract is signed, if you know where to look. In this article I go through where extra costs come from, how the type of contract price divides the risk, how change orders should be agreed, and how to set a contingency so that you know what it actually covers.
Where do the extra costs on a build come from?
When the final account is reviewed after completion, the difference from the contract price can almost always be split into a few groups. Each has a different origin, a different moment when it shows up, and a different way of keeping it under control.
| Source of overrun | When it shows up | What dampens it |
|---|---|---|
| Incomplete or late documentation | At the first detail missing from the drawings | A finished construction-stage design before the builder is chosen |
| Client changes during construction | Any time, most often during finishing works | Materials and fittings decided in advance, changes only in writing |
| Hidden conditions in the ground or in an existing building | During earthworks and demolition | Surveys and opening-up works while the design is still on paper |
| Movement in material and labour prices | Between the quote and the purchase of materials | A short time from quote to start, clear price-adjustment rules in the contract |
| Items outside the contractor's quote | During finishing and moving in | A complete list of exclusions and a separate budget for them |
Documentation that never reached the detail
A quote is only as precise as the information it is based on. If a builder prices the house from the planning-permission drawings, they are missing the floor build-ups, window details, roof junctions, terrace falls and service routes. Someone has to decide those things for them. If that happens on site, the decision is made under programme pressure, without comparing alternatives, and at a price set by whoever is already on site. The cheapest decision is the one made on paper.
Client changes during construction
Once the shell is up, the house suddenly feels different from the visualisation, and the urge to change something is natural. Every change carries three price tags, though: the new work itself, the work that has to be demolished or redone, and the time it costs the other trades. Larger changes are not only a question of money either. If they depart from the permitted documentation, they may count as a change to the building before completion, which the Slovak building act 25/2025 Z. z. handles through its own procedure.
Hidden conditions in the ground and in old structures
Groundwater, made ground, a weak layer at foundation level or rock that has to be broken out: all of these usually appear in a quote as an assumption, not as a fact. A geotechnical survey before the foundations are designed turns the assumption into data. In renovations there are even more unknowns: damp masonry, floors in worse condition than they looked, services that have to be replaced entirely. Opening-up works before the design cost a fraction of what a surprise during demolition costs.
Prices that move
A quote is valid as of the date it was written. If months pass between the quote and the purchase of materials, the builder will either want to adjust the price or has already built the risk into it. In both cases you pay for it. What helps is shortening the time between quote and start of works and agreeing in the contract whether, and on what basis, the price may change.
What is often not in the contractor's price at all?
The most unpleasant overrun is not a more expensive item, but an item that was never in the quote. Typically it is the staircase (especially a timber or steel one supplied by a joiner or metalworker), terraces with their balustrades, external works from paved areas to fencing, utility connections, and the kitchen. Each of them can be priced sensibly, just not inside a house price that leaves it out. A detailed overview of what each level of delivery includes is in the article on shell, weathertight shell and turnkey. Here one rule is enough: list the exclusions from the quote and price each of them separately while you are still deciding on financing.
Lump sum or unit prices: who carries the risk?
The type of price in the contract for work does not decide what the build costs. It decides who pays when reality departs from the documents.
| Question | Fixed price (lump sum) | Unit prices and actual quantities |
|---|---|---|
| What is agreed | One sum for a described scope of work | A price per unit of measure for each item |
| Who carries the risk of quantity errors | The contractor, if the scope is clearly described | The client, payment follows what is actually built |
| Who carries the risk of an incomplete design | In practice the client, through change orders | The client |
| How the builder protects against uncertainty | A risk premium in the price | A smaller premium, the risk stays open |
| When it makes sense | A new build with a finished construction-stage design | Renovations, earthworks, unknown conditions |
A lump sum looks like certainty, but it is exactly as firm as the description of the work. What is not in the design is not in the lump sum either, and it gets added as extra work. Unit prices are more honest about what cannot be measured in advance, but you only know the final sum at the end. In practice the two approaches are often combined: a fixed price for the clearly described part and unit prices for items with uncertain scope, such as excavation or masonry repair.
Both routes rest on the same document. A bill of quantities derived from the construction-stage design gives the lump sum an exact description of what it covers, and gives the unit prices a list of items against which changes are later priced too. Without it you have nothing to compare either the quote or the invoice against.
How should extra and omitted work be agreed?
Extra work (viacpráce) is work beyond the contract; omitted work (menejpráce) is contract work that in the end is not carried out. Disputes at the end of a build almost always arise because these were only discussed verbally. A working procedure has five steps:
- A written proposal before the work is done. Whoever proposes the change describes it so that it can be priced. "Different tiles in the bathroom" is not enough; you need the specific product, the area and the laying method.
- Pricing from the unit rates in the quote. If the item already exists in the priced bill, its rate applies. New items are priced separately and checked by comparison.
- Impact on the programme. A change that moves the completion date has to say so immediately, not with the final invoice.
- Deducting omitted work. If the new work replaces the original, the original is deducted at the contract price. Otherwise you pay twice.
- Signatures of both parties and a running record. A numbered schedule of changes with a running total shows where the budget stands at any point during the build.
As part of design supervision, the architect assesses whether a change is technically sound and consistent with the design. The decision whether you want to pay for it, however, stays with you, which is why you want it in front of you on paper.
Which design choices carry a hidden premium?
Some materials look as harmless in the budget as their ordinary alternatives. The difference only shows in the work they demand.
- Exposed concrete is both the structure and the final surface. It needs high-quality formwork, a trial panel, careful compaction and protection throughout the build. A defect cannot be hidden under plaster, so a builder who prices it as ordinary concrete has either made a mistake or is counting on a result you do not have in mind.
- Facing brick is laid more slowly than ordinary masonry, needs ties to the loadbearing wall, resolved lintels, corners and movement joints, and material from a single production batch. On the drawing it is a hatch; on site it is craft work.
- Stone cladding is heavy, needs a structural design for its fixings, a lot of cutting, and an allowance for waste that varies with the type of stone and format.
By contrast, masonry from standard blocks, an external thermal insulation system with render, a common roof covering or windows in standard sizes are priced reliably. Builders do them every week and their prices can be compared. That does not mean a distinctive material has no place in the design. It means it has to be drawn in detail in the design, priced as a separate item and quoted by a builder who has done it before.
How large a contingency should you keep?
A contingency is not a fixed percentage added to the bottom of the budget. It is the sum of the risks that are not yet resolved, and its size depends on two things: the type of project and the stage you are currently at.
A new build on a plot with investigated ground and a finished design needs a smaller contingency than the renovation of an older house, where every wall that is opened up can bring something new. Distinctive materials, non-standard structures and a long gap between quote and start of works all make the contingency larger.
| Stage | What is still unknown | What the contingency should cover |
|---|---|---|
| Concept design | Structure, standard, ground, prices | Almost everything, which is why the estimate is only a range |
| Permit design | Details, fittings, real quotes | Refining the design and choosing the builder |
| Priced bill of quantities and contract | Hidden conditions, your own changes | Ground, existing structures, changes during construction |
| During construction | Only the remaining uncovered risks | Whatever is left, released step by step |
The practical method is simple: for each open risk, write down what it could cost, and the contingency is their sum. Then you know what it is for, and when a risk closes, you know how much of it you can release. Keep the contingency outside the contract price and outside the budget the contractor sees.
Why count life-cycle cost when cutting?
When the budget does not add up, the first reflex is to cut where it seems easiest: thinner insulation, cheaper windows, a simpler heat source. Yet these are exactly the items that cannot be changed later, or only by demolition, and their saving comes back every year in higher energy and maintenance bills. Life-cycle costing counts the purchase together with operation, maintenance and replacements, and shows which cuts are real savings.
It is more sensible to reduce the floor area, simplify the shape of the house or postpone what can be added later without touching the structure: floor tiles, the kitchen, built-in furniture or external works. How the cost of the design is split into stages and what you get for it is covered in the overview of how much an architect costs.