Cost Contingencies | Playoust Churcher North Shore Architect

Playoust-Churcher-Cost-Contingency-Management

Early design phase contingencies

The early design phase of any project is full of excitement and opportunity. This is when your vision for your dream home starts to come to life.

At this stage, your architect will ask you lots of questions to understand what you need from your home. More than just the number of bedrooms and bathrooms, they will want to know about your lifestyle and design preferences so they can design a home perfectly matched to you.

But there are also a lot of unknowns in this stage. For alterations projects it is impossible to gauge from the initial design consult meeting and/or the early design stages whether the electrical wiring to the existing home is adequate or if the roof framing will need repairs. With most older homes this will be the case, but not always. To cover these upcoming unforeseens, experience tells us to factor in a 20% contingency.

“With any home building project, it is impossible to predict every scenario or possible challenge that might occur,” says Brett. “And that’s why we have very open conversations about budgets with our clients. At the end of the day, if we don’t set realistic expectations, we are going to end up with a disappointing outcome. This early budget and cost contingency planning is to protect our client’s vision for their dream home.”

Detailed cost reports

Once we have the early concept and drawings, we move the design onto the CAD system and often include draft engineering concepts. It is critical at this stage to engage a cost consultant. The cost consultant uses various inputs, including the architectural drawings, as well as some selections for taps, tiles etc. that help to set the quality or standard finish of the job. The report from the cost consultant gives us a market value based on these inputs.

“What we are trying to avoid is those nasty surprises,” says Brett. “Often a client will get excited about a particular feature of their home, such as a staircase or bath tub… but if we don’t have open communication with them to explain that the element will add $70,000 to their build, they can’t make informed decisions.

It’s very easy to get excited by the vision but there has to be some element of taking responsibility for the dollar side of things. In our process, it’s not a matter of saying you can’t have something because it’s out of budget… we help our clients make informed decisions by giving them options.”

The risk of not having these conversations based on thorough cost analysis is that you start to sacrifice the concept. Every decision and change through the process has a flow on effect… and those changes impact the concept and the cost.

Managing the cost of your build

By far the greatest way you can control the cost of your build – and maintain the integrity of your concept – is to avoid design on the run.

It may not seem like a big deal to make decisions during the build process, but when you are looking at cost contingencies of 30-50% versus 10-15%, the decision is simple. As Brett explains,

“For a new house build, you need to allow a 10% contingency. 5% is for unforeseen items such as demolishing the existing house, digging a basement etc.

The other 5% is for client changes. Through our process we actually have this down to between 2 and 4%. We provide a lot of detailed documents and drawings which have all been priced as part of the cost consultant report. Changes are inevitable… but by making all of those big decisions early, you avoid falling into the expensive trap of design on the run.

Likewise, for alterations and additions, you need to allow up to 15% contingency. 5% is for client changes and the other 10% is for unforeseens such as reworking existing parts of the house. The biggest mistake we see people make is not looking at the alterations projects as a big picture. If you have a new addition to the back of the house, it’s very rare that you won’t need to do any work to the front of the house – such as polishing floor boards or painting – to tie the new into the old. Through our process, we have this contingency down to between 5 and 8%.”

While you may be tempted by the flexibility of being able to make decisions through the build process, you will end up paying for the fluidity, big time. The most successful projects are those that combine good design with solid cost and budget planning. And that’s exactly what we do at Playoust Churcher.

Partner with a team of expert North Shore Architects

We’ve been working as North Shore Architects for decades. Our design expertise and our ability to help you manage the costs and budget for your build combine to make us an exceptional team.

Contact us to discuss how we can bring your dream home vision to life and guide you through the entire process from initial drawings to the completion of your build.