Most people start a renovation with the fun part, the photos saved on Pinterest and the trip to the tile store, and the money part catches up with them later when it starts going out faster than they thought. The Houzz numbers show this happens to a lot of people. In its latest study of U.S. homeowners, 37% of the people who set a budget for their 2025 project spent more than that budget, and the typical project came to around $20,000.
And when you look at why they went over, around half said products and labor cost more than expected, which is fair enough. But 35% said they picked more expensive materials than they planned, and 31% said they added more work after the job had already started. So a good part of the extra money came from decisions the homeowners made themselves in the middle of the project, and those are decisions you can make early, sitting at home, before any contractor is in the house.
Most Overruns Start With A Choice Made Mid-Project
These are the reasons Houzz got from the homeowners who went over budget. Many gave more than one, so it adds up to more than 100%:
- 52% said products or services cost more than they expected
- 35% went for higher-end materials than they first planned
- 31% added more work once the project had started
Prices going up is something you can’t do much about. The other two normally happen the same way. You go back to the tile store in week three and see a tile you like more than the one you picked, or the crew pulls up the old floor and somebody says that since it is open anyway, why not move the sink too. On the day, it feels like a small thing, and then it comes back as a change order with more labor, a new delivery date, and sometimes another inspection on top.
Finish The Selections List Before Anything Gets Signed
A contractor prices what is written in the bid and nothing else. A lot of bids have an allowance in them, like “$1,500 for tile,” and if the tile you end up choosing costs more, the difference comes out of your pocket. So pick the actual products before you sign and let the bid carry their real prices. For a kitchen or bathroom, that usually means:
- faucets, sinks, and the toilet, with the model numbers
- floor and wall tile, and the grout color too (most people forget grout until the installer asks)
- cabinet style, the finish, and the pulls
- the countertop material and the edge you want on it
- light fixtures, and where every outlet and switch should go
- paint colors, written down with the brand’s color code
Then take the list and a tape measure and walk through the room at the time of day you actually use it, the morning rush for a kitchen and the evening for a bathroom. You will notice things this way that would have turned into change orders later.
Hold Back 10 To 20 Percent For What The Walls Hide
Most remodelers will tell you to keep 10% to 20% of the project cost on the side for problems that only show up once the walls are open, like framing that rotted under an old tub that leaked for years, wiring that won’t pass inspection, or a joist somebody cut into decades ago to fit a pipe. With an older house, go closer to 20%.
Keep this money for repairs only. If it goes on nicer tile in the middle of the job, it won’t be there when the plumber finds a cracked drain line.
A Kitchen Remodel Spends More Time In Planning Than In Construction
In the same study, homeowners spent 9.5 months planning a kitchen and 5.8 months building it, so the planning took longer than the actual work. Some of that time goes on the design and getting bids, and a lot of it is waiting, because custom cabinets can take weeks to come, special-order windows usually take longer, and the building department will look at your permit when it gets to it.
So order everything that has to be ordered before demolition, so the crew isn’t standing around waiting on a truck in a kitchen that is already torn out, and ask the contractor to write the delivery dates into the contract schedule. Months of planning feels slow, but it is still better than cooking on a hot plate in the garage for an extra month because the cabinets are on backorder.
What A Contractor Can Legally Ask For Before Work Begins
Deposit rules change from state to state, and California has some of the strictest. There, the down payment on a home improvement contract can’t be more than $1,000 or 10% of the contract price, whichever is less, and after that, the contractor can’t take more than the value of the work done or the materials delivered.
So on a $40,000 kitchen, how much can a California contractor take when you sign?
$1,000. Ten percent would be $4,000, but the lower number is the one that counts.
In other states, the limit may be different, and some states don’t have one at all, so check with your state’s contractor licensing board before you sign. Most boards also let you look up on the same website whether the contractor’s license is active. Wherever you are, tie the payments to finished stages, like the rough plumbing being done or the cabinets being installed, so you are never paying far ahead of the work.
Also ask for lien waivers from the main suppliers and subcontractors when you pay. In many states, a supplier who didn’t get paid can put a lien on your house even if you paid the contractor every dollar.
Houses Built Before 1978 Need A Lead-Safe Certified Contractor
Lead-based paint was banned for homes in 1978, so if your house is older than that, there is a good chance some walls still have lead paint under the newer coats. The EPA’s Renovation, Repair and Painting Rule says the contractor on a pre-1978 home has to be a certified lead-safe firm when the job disturbs more than 6 square feet of paint inside or more than 20 square feet outside, and any window replacement counts whatever the size. You should also get the EPA’s Renovate Right pamphlet from the contractor before the work starts.
Getting The House Ready For A Crew In It Every Day
About a week before demolition, get the house and the family ready for people coming in every morning:
- Set up a temporary kitchen in another room with a microwave, a coffee maker, a hot plate, and a tub for the dishes
- Take photos of every room near the work, floors and ceilings too, so you have a “before” picture if something gets damaged
- Pack away anything fragile on shared walls, since hammering on one side can shake the shelves on the other
- Ask the crew where they will park, which bathroom they will use, and what time they start
- Sort out a plan for the pets, because doors will be open all day and a nervous dog can slip out
And then there is the permit. In most towns, the permit should be pulled in the contractor’s name, not yours, because whoever holds it is the one the inspector holds responsible if the work fails. If a contractor asks you to pull it yourself, it can mean they are not licensed for that kind of work, so ask them why.
None of this is as much fun as choosing tile, but if the list, the payments, and the house are sorted out before the crew shows up, the budget you started with has a much better chance of holding.