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Understanding the Average Cost of Rebuilding a House

Understanding the Average Cost of Rebuilding a House 

Considering the Average Cost of Rebuilding a House and embarking on a project to tear down and build a new home reveals its complexity. The process involves architectural and interior design, engineering, construction planning, and obtaining permits, including possible approvals from the committee of adjustments for deviations from typical city regulations.

Given the intricacies and time-consuming nature of such a project, it’s no surprise that there are numerous factors to consider in the overall cost. Generally, a rebuilding budget comprises three primary components: a management fee, a detailed line item scope of work, and the necessary purchases, such as materials or bid contracts for trades.

To gain a better understanding of the average cost of rebuilding a house, here are some essential factors to consider.

Management Fee

A management fee is how the builder of any project gets paid to provide the services and business infrastructure required to make your new home a reality. The service is provided as either a fixed fee or a percentage of gross construction costs. The fee often includes the services of an experienced construction manager overseeing the build and coordinating with the people hired to perform the work on site.

The management fee applies for the duration of the project, from concept to completion, and ensures all work is performed according to specifications detailed in the scope of work and design drawings. Construction management is time-consuming, methodical, and skilled work that involves
pre-planning every aspect of the build and working with the team to keep the plan on track. Depending on the size of the construction project, other personnel, such as a site superintendent, may be required to manage day-to-day on-site efforts.

Ensuring high-quality results, efficient production and accurate budgeting are part of the recipe that ensures your Simcoe Muskoka County builder will deliver the results you and your family count on!

Detailed Line Item Scope of Work 

The scope of work is the meat and potatoes of the construction plan and budget. It is a detailed list that itemizes every aspect of construction and assigns a dollar value by vendor type or category, complete with quantities and unit pricing for labour and materials. From demolition to foundation, framing to finishes and everything in between, all construction activities are accounted for and then summarized in a document that becomes the project budget. It should be straightforward to read so that projected costs can be compared to actual costs as the project progresses. The financial information provided enables the construction manager to provide detailed information about what was spent and generate further reporting tools to the client, often referred to as the Cost To Complete document.

Materials and Bid Contract

A bid is a proposal from trades and vendors to perform a job that usually includes labour and materials at a specified contract price. Bid contracts for trade work are required for portions of the project, such as the foundation, cabinetry, plumbing, HVAC or landscaping. Bid contracts remain constant when there are no changes to what they were originally asked to do. When the scope of work changes or site conditions are outside of their original assumptions, bid contracts are subject to adjustment based on the terms of the agreement. The construction manager would review the situation, submit a change order, approve the change and update the budget accordingly.

During the costing phase and prior to your home renovation contractor receiving bids, they will use their experience with past projects to anticipate what the budget will be for each line item. Contingency planning for unforeseen circumstances is often included to ensure the project is adequately funded. Builders who have good accounting and project records are able to compare the proposed work in front of them to similar projects they have recently completed. Many factors are considered, but in simplistic terms, custom homes of the same scale and complexity and in similar neighbourhoods provide comparables that are useful when calculating costs.

Approving a home rebuild budget can seem daunting if you are unfamiliar with the different fee structures. In most cases, you can expect to see three primary parts in the rebuild budget, a management fee for the construction manager to run the rebuild, a detailed line item scope of work listing all aspects of the construction, and materials and bid contracts needed to complete the work. Don’t be afraid to ask questions — knowledge is power, and Dan Robinson Construction Management is here to help!

Reach out today, and we’ll help you make your dream home a reality! 

Christine Lantain
General Manager
Dan Robinson Construction Management

Considering a home renovation or addition?

Whether you want more space for your growing family or crave a space that reflects your vision better, Dan Robinson is here to help transform your dream into a reality.

Regardless of where you are in the process, contact us, and we’ll call to arrange a no-obligation consultation at your convenience. We will come to your home, discuss your vision and begin the process of helping you love your home again.

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Dan is happy to meet with you, listen to your ideas and provide you with a free site quotation no matter where you are in the renovation decision process. No charge…with no pressure, no obligation and no strings attached. We promise. We simply want you to have all the information you need to make the best decisions related to your Innisfil, Simcoe County home renovation or addition.