paying for architectural plans you can't use - read this!

fern4April 6, 2008

I posted this article from the New York Times on the Kitchens forum where it received little interest. While it doesn't offer any silver bullet solution to the problem of people not knowing the costs of construction before getting plans drawn, it's an eye-opener that people should read. I read it before we started and still had trouble. (By the way, I'm not posting this as an endorsement of design/build firms as they can create the same problems.)

February 17, 2007

Short Cuts

The Pain of Paying (a Lot) for House Plans You Dont Use


Correction Appended

A few years ago, when the charm of sharing a room with his brother had worn off for our older son, we decided to look into remodeling.

We had a budget of about $20,000 and a goal to give each son a room of his own. We hired an acquaintance who was an architect to draw up some plans within that budget. The idea was to create a dormer window in our multipurpose room and then possibly divide it into two small rooms.

The bids from contractors started coming in, with not one under $40,000, and some topping $50,000. It also turned out, as one contractor noted, that we would probably have to strengthen our living room beams, which the dormer would rest on, adding more to the cost and the overall disruption. (It was a little worrisome that the architect and other contractors had not noticed this.)

So, after paying more than $1,000 for architectÂs drawings, we decided to go another route  revamping a guest room into a third bedroom  and dropping the dormer idea altogether.

It was the first time we had used an architect, and I did not think much about it, except to be glad we hadnÂt spent more money.

Then I started hearing similar stories.

"We bought our house in 2001, planning to do a two-story addition," said Victoria Lesser, who lives in Larchmont, N.Y. "Our budget was a really flat $150,000."

Before even moving into their new house, Ms. Lesser explained what she wanted to an architect she found through friends. But when the bids from the contractors started rolling in, they hovered around $300,000.

"I felt so misled," she said. "We would never have bought the house had we known  we would have put the $150,000 into buying a bigger house."

They still ended up paying the $18,000 the architect charged for the drawings.

"It was such a waste of money," she said. "It killed me."

Ms. Lesser and her husband ended up remodeling on a much smaller scale, and now, she said, their only hope of recouping the loss from the architectÂs drawings is to include them as part of a deal when and if they sell their house.

A surprising number of people shared similar tales of sitting down with an architect and planning a project over months, then finding out, once the drawings were done, that the bids were way out of whack with what they could afford.

"It happens a lot," said Nina Patel, senior editor of Remodeling magazine and deputy editor of Upscale Remodeling.

Naturally, architects and homeowners have very different perspectives on why this can happen.

One problem, said Andrea Cioccolanti, an architect based in Newton, Mass., is that unlike Ms. Lesser, many homeowners who are doing renovations feel reluctant to say what their budget is, "which is like having to design in the dark."

Ms. Cioccolanti said once the process begins, clients also are often unwilling to cut back.

"They donÂt want to compromise, and thereÂs no sense of reality, and then theyÂre frustrated they canÂt afford it," she said. "While itÂs very human, itÂs also very unfortunate."

It often helps to make sure a contractor is on board from the start to help keep both homeowner and architect in check. "An architect should talk from the beginning about what itÂs going to cost," said Andrew Garthwaite, a partner in the architectural firm of Haynes & Garthwaite in Norwich, Vt.

If a contractor is involved early on, "he can double-check what an architect says," Mr. Garthwaite said. "Much more than the architect, he has his finger on the pulse of the real costs."

But even that does not necessarily avert trouble. My sister, who lives in La Jolla, Calif., wanted to put a $250,000 addition on her home. She worked with an architect and contractor and had plans drawn up for a total of $30,000 Â and had even gone so far as to submit them to the city for permits.

To her shock, when the bids started coming in, they were double that estimate; almost $500,000. She and her husband ultimately had to shelve the project.

"It turned out the electricity had to be almost completely rewired, which meant tearing down a lot more walls than we planned," she said. "But I donÂt know why this wasnÂt figured out in the first place."

Mr. Garthwaite said architects often created a menu of items to let homeowners eliminate those that are the least painful. It is not so difficult to cut a project down by 10 percent of its cost, he said, but "you have to do something pretty drastic to get 20 percent out."

One factor that is very hard to keep under control is cost of material and labor; architects estimate that the cost of construction goes up 20 percent every year.

Leslie Pepper saw firsthand how zooming prices affected her planned remodeling project.

Three years ago, when pregnant with her third child, she planned to add another bedroom and make some other changes to her Long Island house.

She hired an architect that her sister-in-law had used.

"I guess I should have interviewed more than one person," she said.

She started getting contractor bids ranging from $140,000 to $210,000, which did not include bathroom fixtures and appliances, making it more than she could afford.

"We looked at our finances and said, ÂWhat, are we nuts? " Ms. Pepper said. "We had delusions of grandeur. The ball keeps rolling and everyone around us is doing big renovations and I got caught up in that."

Also, the process from first meeting with an architect to final plans can take from six months to a year and much can change, as Ms. Pepper found out.

"When I first started, the home equity rate was extremely low," she said. "When the plans were all worked out, it started going up."

At the same time, oil costs were skyrocketing, and hurricanes were hitting Florida, affecting the cost and the supply of materials.

"Materials had gone sky-high," she said.

Ms. Pepper ended up doing a smaller remodel for about $75,000 and not using the $8,000 worth of architectural plans, which are sitting in her closet.

One of the ways to avoid being surprised by the costs is to go with what is known as a design-build firm; one that does both the designing and building, so there is no sticker shock at the end.

Design-build firms can work in a number of ways, depending on the project; they can subcontract to architects, use stock plans or use a draftsman who is not a licensed architect. ItÂs important to know what your municipality requires, however; some allow only licensed architects to file plans.

"One of the perceived disadvantages of design-build is that you have all your eggs in one basket," said William Quatman, chairman of the American Institute of ArchitectureÂs Design-Build Committee. "Homeowners like an architect to keep an eye on construction." If they hire a design-build company, "they can feel, ÂWhoÂs looking out for me? It requires a great leap of faith."

Not only is an architectÂs job to draw up plans, but she acts as the homeownerÂs advocate and oversees construction to ensure the contractor adheres to the drawings.

In addition, those who want top-end remodels usually are more interested in "high design" and name architects, Mr. Quatman said. He said, however, that there are many times that design-build firms may be a better option than an architect.

One advantage, Ms. Patel said, is that design-build firms can have a much better sense of the real cost of labor and materials than an architect.

One way to avoid nasty surprises is to understand how architects work. Interview at least three or four, even if your best friend, sister or neighbor swears by one. Find out how she is paid. There are many different compensation methods; for example, as a percentage  usually ranging from 10 percent to 15 percent  of the construction costs; an hourly fee; an overall flat fee; or costs calculated on square footage.

What is the architectÂs experience and track record with cost estimating? Talk to past clients about that and about her communication skills.

As for us, I think weÂll wait a while until we plunge into the world of renovation again. Now each boy seems satisfied with a room of his own; once they are teenagers we may need to take another look at the basement.


Correction: February 20, 2007

The "Short Cuts" column in Business Day on Saturday, about architectural plans that go beyond a homeowner's renovation budget, misstated the name of a professional organization whose chairman commented on using firms that design and build instead of architects. It is the American Institute of Architects, not the American Institute of Architecture.

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We've done 3 major remodels and only once used the contractor's architect to draw up rough drawings. We've always decided first on the contractor we wanted and then worked with him on costs. Based on what we learned from the GC, we'd then adjust the work we wanted to do on the house.

Yes, there's always extra costs than one plans for and we went into the project expecting to spend a little extra due to 'surprises' hidden in the walls.

    Bookmark   April 6, 2008 at 3:34PM
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I and most other architects I know, stopped putting full drawings out for competitive bids in the early 70's. With the current slowdown in construction homeowners are starting to ask for competitive bids again and it pains me to have to explain to them why this approach usually costs more and always takes more time.

In my opinion, the only way to keep a project within a budget or a schedule is to interview contractors, review their OH&P or proposed Fee, look at their work, check references, and then hire one to act as a consultant (or as the GC) during the design development phase providing advice and updating the project budget weekly.

The construction contract used for this kind of job is common in commercial work and is called "Cost of the Work with a Fixed Fee" (with or without a Guaranteed Maximum Price and/or Shared Savings). In order to administrate such a contract the architect should provide construction phase services.

Most homeowners think this method is more risky but the lesson to be learned from the stories above is that it is less risky.

In my opinion, the best project delivery method is to bypass the temptation to search for the lowest possible cost, and negotiate for a cost that is fair to all parties and allows the project to start quickly with as few contingencies and surprises as possible.

It also allows you to use the contractor you like, which may be the greatest benefit considering you are inviting this person and his/her subs into your home and it will be difficult to isolate yourself and your family from the inevitable stress.

    Bookmark   April 6, 2008 at 3:40PM
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So we aren't the only ones! We originally planned a 2 story addition plus kitchen renovation with a planned budget of about $300,000 (and a ceiling of $325,000). One market downturn later, we are only doing the kitchen for the moment with the rest on hold -- of course, we've already sunk $20,000 into architectural plans. Live and learn. To be fair, however, design/build isn't always the best option. If you go with them you are locked into their contractors and have no opportunity to shop around -- in our area these types of firms are the most expensive by far, although they do offer a nice product and it is certainly convenient.

    Bookmark   April 7, 2008 at 1:23PM
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Let me please ask a question. I live in So Florida... what can I expect to pay for drawings for a 200 sq. ft. addition off the bedroom? This would be to just square off the back of the house and enlarge the bedroom and add a new master bath. I'm freaking out when I read 8K, 12K, 18K for drawings. I know what we want, have sketched it out, but of course have to make sure it's structurally sound and will need accurate drawings to submit to the town for permits. I'm beginning to feel like we're biting off more then we can chew.

    Bookmark   April 7, 2008 at 10:20PM
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I think I wrote in an earlier post to you that you need to be careful about the costs of additions -- they are expensive! That was about the construction cost, not the architect's fee.

I cannot say how much it should or might be but I can say that we paid $5,000 for just a structural engineer's work and towards the upper end of the range you set out for the architect -- for a 2-story addition.

I'm sure there is more than one way to accomplish all of this but here's one way. First, you shop around for an architect, the same way you would for anybody else: interview, check references, look at portfolios. While I personally would not recommend design/build firms you do want to make sure that the architect you hire really has a firm grasp on construction costs. You seek to have something that could be called "phase I" drawings or "conceptual drawings" or something similar to that. These are just the ideas -- more than one but probably less than four -- and that costs you maybe 1-3 thousand. (I'm sure that if my range is wrong someone will correct me.) Once you have that, then you can obtain an estimate on the cost of construction. This is just an estimate, it's not based on what actual ppliances, flooring, etc. you will have. It is not a firm bid. Nobody is promising that this estimate is accurate. This is where things can also go very wrong. The estimate may be way lower than the actual costs will be. This is where you have to throw away your desire to hear Low Numbers and Demand that your architect give you the really bad news. If you read mightyanvil's comments it appears that he is suggesting that you have a GC involved during this whole process whose job it is to keep an eye on the costs on a consulting basis. (I think this is the idea of hiring an expert on costs to be involved which costs you more up front but keeps you out of trouble later. I have no experience with this.) If your architect doesn't know enough about construction costs he or she will be useless to you at this critical stage because this is where you decide whether you want to plunge in and hire the architect to enter the really expensive part and you need to know what the construction costs are going to be before you make this investment.

Now, perhaps your addition isn't at all complicated and you just need drawings, not really anything that's the least bit of design work...I have no experience here either but perhaps someone else can advise you.

    Bookmark   April 7, 2008 at 11:20PM
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For a small addition I would suggest getting bids from contractors and asking them if they have an architect on staff. One GC we used for a major remodel used his own architect to draw up designs for permits. There was a charge, but nothing like what I'm seeing on this thread.
The fact you know what you want and have a sketch will make things a lot easier.

    Bookmark   April 8, 2008 at 2:09PM
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My architect did an on-site consultation for free (I have a previous relationship from an addition/kitchen remodel 5 yrs ago). She started charging when she started measuring for the upstairs 30' shed dormer to add a small upstairs (master) bath and expanding the 2nd bedroom in my 1928 home.

I really appreciated when she was able to call me and say that she had determined that my existing stairs were too steep even to be grandfathered with the extent of the upstairs remodel, and to proceed with the plans, she would have to draw in "legal" stairs. This would add HUGELY to the scope and cost of the project, so I just stopped the plans then and was able to limit my costs to under $1K.

I sure wish that all architects had this kind of practice. She did give me the complete drawings of existing structure she did from the measurements, and also what would be needed for "legal" stairs. I figure I can give these to any subsequent owner.

    Bookmark   April 8, 2008 at 10:16PM
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