Cost & contract · Glossary
Cost overrun
Also called: budget overrun, over budget, renovation overrun
A cost overrun is the amount by which a renovation's final cost exceeds its original contracted budget. On residential remodels, overruns of 10 to 20 percent are common and usually trace to three causes: hidden conditions found during demolition, mid-project scope changes, and under-scoped allowances for finishes. A funded contingency reserve is what absorbs an overrun instead of stalling the job.
Example
A $60,000 kitchen remodel that uncovers failed subfloor and outdated wiring during demo can run $8,000 to $14,000 over budget, a 13 to 23 percent overrun that a contingency reserve absorbs if one was set.
Why this matters for renovation projects
Cost overrun shows up on permits, contracts, or estimates that Renology covers across LA, San Diego, San Francisco, Seattle, Portland, and Denver. Most homeowners encounter the term once a project is already mid-flight, when there is no time to learn its mechanics without slowing the contractor. Knowing what it means before signing the contract is the difference between a clean project and an avoidable surprise. For how Renology calibrates cost ranges against permit valuations and contractor invoices, see the methodology.