Sticker shock begone

I hear from architects and builders from all over the country about the alliances they’re forming with each other, providing integrated design/build services to benefit their mutual clients. It’s through this kind of collaboration that our industry is making great strides toward optimizing the project delivery method, making the design-bid-build system more like design/build, which is a change I find commendable.

Interestingly, in custom home designing and building, the designer typically is far removed from the production and delivery of the final product. It’s entirely within our grasp, however, to deliver a product to the consumer without a lot of fuss, and with systems in place to make the customer experience an enjoyable one. For this to transpire, the product provider (the architect) should integrate every system rather than subject the customer to shopping the competitors.

I recently took part in organizing the fourth annual meeting of the AIA CRAN (Custom Residential Architects Network) and the HBA’s Custom Builder Council in my town. In this meeting a panel of residential architects and custom builders discussed how they handle delivering cost information to the client in the early stages of design and through contract signing. Overall, it was a great discussion, and all six of the presenters spoke openly about their processes and encouraged those in attendance to create alliances with each other in the early stages of design.

 

There was candid conversation about sticker shock at about every turn; at the time of preliminary cost, then again at final cost; during construction when allowances are insufficient and when change orders are required because design issues are not resolved; at completion when final change orders are presented; and at final recap of a cost-plus job. The presenters emphasized that architects should know more about historical costs, and extolled the virtues of selecting a builder before preliminary design and having the client paying professional fees for preliminary costing.

In spite of the very positive exchange, the experience of “sticker shock” to customers continued to surface. The reality is that when dealing with construction cost budgeting, whether in design-bid-build or the best design/build scenario, certain processes must be followed. It all begins with the very first phone call you take from a prospect.

 

It’s critical that the person taking the prospect call is capable of discussing features, costs and explaining to the caller what they can get for their money. Most clients know what they can spend, but few have a realistic concept of what it will buy. And while many prospective clients are not ready to share what their budget is, they are eager for information. Custom designing and building a home certainly is an educational endeavor, and we should share our cost expertise for the caller’s benefit, and ultimately our own.

Unfortunately, many design-only firms are unwilling to deal with cost issues, particularly early on, to secure a commission. It’s these firms that too frequently end up with a collection of plans on their shelves that never get built, and are a big part of the reason custom designing and building has such a bad reputation. It is no wonder that consumers can be fearful and distrusting of architects and builders.

Imagine a world of customers, architects, builders and interior designers where the customer calls and in that first conversation can get all the information about cost — not in price per square foot but in a lump-sum dollar figure — to make an informed decision. And what if the company providing that cost information, once hired, is committed to verifying that budget against the preliminary plan and updating the cost with each plan update?

In this world the word allowance doesn’t exist; all selections are included in the cost and design development and the original budget is a reflection of the final construction contract price. There are no surprises, and because plans are so well designed and detailed there is no finger pointing, and inconsistencies between design and construction are handled internally without financial consequence to the customer.

That world is one of a well-organized design/build company, whether fully integrated or a partnership among providers, that takes responsibility to the customer for the final design, performance and cost of the product. It is achievable, and when our industry is able to deliver this level of service as a standard, then building a custom home might not be the nightmare it can be today.

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