Three Things Your Estimating Process Gets Wrong Every Time

Research on construction cost overruns points to three systematic errors. All of them are fixable before the next bid goes out.

Builder's Benchmark · February 22, 20262 references

Construction cost overruns aren't random. A meta-analysis of 1,400 residential projects found that cost overruns follow predictable patterns — and the three most common errors account for 72% of all budget variance.¹

Error 1: Underestimating site conditions

The single largest source of cost overruns in residential construction is site-related surprises. Soil conditions, drainage issues, and access constraints add an average of 8-12% to project costs when they're discovered after the bid is accepted.²

References

1Flyvbjerg, B. et al. (2023). "Residential Construction Cost Overruns: A Meta-Analysis." Construction Management and Economics.

2NAHB Research Center (2024). "Cost of Constructing a Home." National Association of Home Builders.

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Three Things Your Estimating Process Gets Wrong Every Time

Error 1: Underestimating site conditions

References

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