If there's one thing that worries anyone considering building or renovating a home, it's the budget getting out of hand. You start with a clear figure in mind… and end up paying considerably more than you anticipated. Therefore, understanding how to avoid cost overruns in a construction project isn't just about saving money, but also about peace of mind, planning, and control.
The good news is that most cost overruns aren't due to bad luck, but rather to errors that can be foreseen and avoided with proper management. In this article, we clearly explain the most common cost overruns and, above all, what you can do to prevent your project from becoming a bottomless pit.
Why do cost overruns appear in a construction project?
An additional cost is any expense that arises and was not included in the initial budget. Sometimes it's small, other times several accumulate, and the final impact can be significant.
It doesn't always mean that someone has acted wrongly, but it usually indicates that something wasn't well defined at the beginning, that there was a lack of control during the work, or that decisions were made without assessing their economic consequences.
Common mistakes that skyrocket the budget
Last-minute changes
Changing a material, moving a partition, or modifying an installation once construction is underway is usually much more expensive than doing it according to the plans. Not only do you pay for the new work, but in many cases, you also have to undo what has already been done.
Unrealistic budgets
Sometimes a budget is presented that looks very attractive but is incomplete. It doesn't include certain items, doesn't cover certain facilities, or is based on unrealistic prices. The result is that "extras" appear later on that were actually necessary from the beginning.
Lack of planning
Starting a project without everything properly defined—design, materials, timelines, suppliers—is almost a recipe for cost overruns. Every improvised decision usually translates into extra money.
Poor coordination
When architects, construction companies, manufacturers, and clients aren't aligned, errors, duplication of effort, or poorly executed work occur, requiring corrections later. And correcting mistakes always costs more than getting it right the first time.
How to avoid cost overruns in a construction project step by step
Define the project clearly before starting
The more rigidly structured the project is at the outset, the less room there will be for deviations. This implies:
- Have a clear final design.
- Choose materials and finishes before starting.
- Resolve all technical doubts about the plan.
Investing time in this phase saves a lot of money later.
Prepare a fixed and well-itemized budget
A good budget is not just a final figure, but a detailed document that clearly shows how much each thing costs: structure, masonry, installations, finishes, carpentry, etc.
This allows you to understand where the money is going and detect potential shortcomings before signing anything.
Set aside a margin for unforeseen events
However well planned a project is, small surprises can always appear: a pipe that wasn't where it should be, a foundation that needs reinforcement, a regulation that requires something to be modified.
That's why it's wise to set aside between 101% and 151% of your budget as a safety net. It's not for spending, it's for being prepared.
Choosing the right construction company
An experienced company doesn't just build, it anticipates problems. It knows the terrain, local regulations, real-time timelines, and common mistakes.
Choosing a construction company that plans, advises, and manages professionally greatly reduces the risk of financial deviations.
Monitor the work during its execution
It's not enough to start well; you have to keep it up. Regularly monitoring progress, comparing what's been done with what was budgeted, and reviewing certifications helps detect any deviations while they're still easy to correct.
Waiting until the end is usually too late.
Put everything in writing
Changes, decisions, adjustments… everything must be documented in writing and approved before implementation. This prevents misunderstandings and subsequent arguments about what was and wasn't included.
The value of experience in construction management
The difference between a project whose price skyrockets and one that stays within budget is usually not in the materials, but in the management.
Experience allows you to detect risks before they become problems, adjust timelines, coordinate teams and, above all, make decisions with both economic and technical criteria.
Good management isn't noticeable when everything is going well... it's noticeable when something could go wrong but doesn't.
Conclusion: Spending wisely means spending less
Avoiding cost overruns in a construction project is not about cutting corners on quality or looking for the cheapest option, but about better planning, making decisions earlier, and monitoring progress.
A well-defined project, a clear budget, a professional construction company, and constant communication are the best tools to ensure the final price closely resembles the initial one.
Because in the end, a job well done is not the one that costs the least, but the one that costs what it should have cost from the beginning.
If you are looking for a construction company in Mallorca with the best guarantees, contact us. At Armalutx we have over 50 years of experience on the island.
