The Hidden Costs in Your Custom Home: How Scrutinizing General Conditions Can Save You Thousands  

As an owner's representative in the world of high-end home construction, I’ve seen firsthand how quickly budgets can spiral. While clients are often laser-focused on the big-ticket items – the marble countertops, the custom cabinetry, the state-of-the-art appliances – a significant portion of the project’s cost lies in a less glamorous but equally impactful category: general conditions.

General conditions, in construction terminology, are the indirect costs of running a project. Think of them as the project's essential, temporary infrastructure. This includes everything from the project manager's salary and the site office trailer to the portable toilets, temporary fencing, dumpsters, and builder's risk insurance. While these items are absolutely necessary for a smooth and safe construction process, they are also a prime area for potential cost savings that often goes unexamined.

The reality is that many general contractors, while excellent at their craft, are not always incentivized to find the best price on these recurring expenses. They often have long-standing relationships with preferred vendors and are accustomed to a certain way of operating. The path of least resistance is to use their usual suppliers, regardless of whether their prices are competitive. This isn't malicious; it's simply a matter of efficiency for them. Their focus is on building the house, not necessarily on squeezing every last dollar of value out of the logistical line items.

This is where having an owner's representative can provide a significant return on investment. Part of our role is to dive deep into the numbers during the value engineering phase, and that includes a thorough review of the general conditions. We aren't beholden to any specific vendor, so we're free to shop around.

A recent project for a client in the Hamptons serves as a perfect example. The initial budget for general conditions was substantial, and upon review, we identified several areas where we could be more strategic. We took the time to price out portapotties from multiple local suppliers. We re-evaluated the dumpster size and the frequency of pickups, tailoring it to the actual anticipated flow of work rather than a generic schedule. We shopped around for the builder's risk insurance, securing a policy with the same coverage for a lower premium.

By carefully scrutinizing the sequencing and pricing of these essential items, we were able to help our client realize a savings of $65,000.

What’s more, these savings had absolutely no detrimental effect on the project. The quality of the construction was not compromised, the schedule was not delayed, and the site remained safe and efficient. The only thing we trimmed was the waste – both in terms of physical materials and in our client's budget.

When you're building a high-end home, every dollar counts. While it's easy to get caught up in the design and finishes, it pays to have a knowledgeable advocate on your side who will sweat the small stuff. As this recent success story illustrates, a meticulous approach to the less-than-glamorous aspects of a project can lead to very glamorous savings.