Budget Checkpoints: How to Control Costs During Home Design

William Reid: [: 00:00:00

and most recently, I've covered a lot of the design professionals from beginning with architects, interior designers, and so on. We're gonna skip out of that area for a minute and we're gonna talk about the design process, your roadmap. And what you could expect or should expect, I should say, when it's time to begin designing your project with a design professional.

in one form or another. And [: 00:01:00

So today we're gonna hop into the shop studio. Me and my mobile studios here, and we're gonna talk about the introduction to the design process. See you there.

All right. Picture this, you're standing on the street overlooking the brand new lot that you purchased, that you just got really excited about, and you and your spouse are coffee in hand enjoying the view, envisioning your new home, or at least trying to envision your new home. But what is it gonna take to get from that point?

right people that we've just [: 00:02:00

To help you get to that point, and I think it's really important that we share that with you so that you can get in their head so you can understand what they're looking for, what you need to know so that you can convey everything that you want and your wishes and your dreams, and then set those expectations for each one of those steps.

I wrote a story, it's actually a fictional story in my book, in the prologue, in the epilogue, but it's really, it's like a true story. And it it articulates what people go through two different scenarios, two kind of real life scenarios that can happen and that, and the variety of ways has happened.

[: 00:03:00

And the McMillan's, however, had brought their architect and the construction agent to evaluate the lot first before they bought it. Ben actually noticed these two people hiking, taking pictures and driving stakes, but didn't realize the significance. And what he was seeing was he was seeing the McMillans being prudent about their approach, where Ben and Jane were, ripping down the road to the developer's office to put the deposit down on the lot, not really realizing what they may be getting themselves

into. [: 00:04:00

Meanwhile, just down the hill, the McMillans are celebrating in their beautiful, completed home clinking wine glasses as they enjoyed, their housewarming. Both couples started on the same day. But the McMillan's finished six months earlier and stayed on budget while Ben and Jane's project spiraled into a nightmare.

ve a link in the notes here. [: 00:05:00

What caused a lot of this is because Ben and Jane didn't really go through the discovery period like I've talked about in the book and in the podcast, and then they just leapfrogged all the way through the design process and ultimately created the Nightmare all on their own. So when you hear about all these people saying, ah, it was miserable, it was a nightmare, and all the finger pointing going around a lot of it is because.

As a homeowner, you didn't really know what you needed to do in order to protect the experience. And here we go with my three principles, my three guiding principles, enlighten, empower, and Protect. And that's today, we're gonna keep on that mission. We're not gonna let that go. And this is a big part of the enlightening process that we're gonna cover today.

So the design [: 00:06:00

But keep in mind that architects can go all the way from bathroom and kitchen design remodel renovations inside a home, all the way to, designing and helping you build palatial estates. And don't forget that because architects really provide the most value in my opinion. When it comes to people that want a high quality project and a well protected experience.

o life. Your architect takes [: 00:07:00

That you've taken the time to do, and if you've skipped that process and just picked up a phone, this is where, this is the beginning of your Ben and Jane nightmare, because you have not articulated your dreams and visions and your budget to an architect or an interior designer, or even a kitchen and bath designer, depending on the project that you're doing,

step one in this three stepping stone approach of visualize, a nice slow moving stream with three stepping stones to get to the other side. And there's a space in between each one of those. And we're gonna, we're gonna take our first leap onto stepping stone number one, which is the schematic design process.

So the [: 00:08:00

Obtain direction from your designers, but also to give them direction. So one thing I want to keep in mind here is that this is a two-way street. The, the old garbage in, garbage out cliche is actually a real thing. And the clientele that spend more time upfront. Researching and learning about what they want, and then conveying that to their design team, have a much better experience than those that don't.

[: 00:09:00

'cause our family's growing. We like this mountain modern style. And we have these particular lifestyle things that are go on that we like to mountain bike and we travel a lot and one of us works at home. And you get getting, the idea here is that you're sharing your lifestyle with your architect which you've thought about in that discovery stage, and you're conveying that to them and you're sending them the images and the pictures of the styles that you [00:10:00] like, and they are.

Getting, they're starting to get you, they're starting to learn about you and your family, and the more you can do this, the better the output that you're gonna get. So if you start sending an architect or a designer on an on a wild goose chase trying to figure you out. And proposing design ideas that are not even close to what your style is.

There's a couple reasons why that happens. One is it happens because the architect. And the designers weren't given enough direction, but the other side is some designers are really stuck in their ways and only can figure out how to do the Mediterranean style, for example, rather than your mountain modern style or your farmhouse style, or your modern contemporary style, if you get my drift.

y'll develop design ideas in [: 00:11:00

I will be going into the details of each one of these steps, but think about step one, the schematic design, okay? As the free flowing, exploration period where you start to see those ideas developed. The step two is often called design development, and what that means is this is where you start to get serious about the details of your project.

You've probably by now made a decision on the option that you want. So your architect during the schematic design process may have offered you two or three ideas, whether it's a new home construction or remodel. Let's look at an option. With the kitchen on the back of the home. Now instead of the front, let's look at an upstairs suite versus an addition on the backyard, things like that.

So the design [: 00:12:00

You'll also start to see your full design team come together. And what I mean by that is. If you've hired an architect, you've probably engaged with one person the whole time, but there's gonna be other people that get involved in the project, like you may have learned in the previous episodes, such as an interior designer, a structural engineer a civil engineer.

want the style of the home, [: 00:13:00

That's not what the design development stage is about. That's for schematic design. You wanna move walls around in a big way and move the buildings around and explore architectural styles and kitchen in the front, kitchen in the back. That's what schematic design is for. When you get into design development, you've made choices.

You've made commitments as a homeowner that this is the direction I want to go. Now you can make changes in design development. Remember, it's gonna cost you. And it's not necessary. It's unnecessary to pay extra costs at that point. And this goes back to my principles in the beginning with the discovery stage and taking the time before you even call anybody to vet some of that stuff out on your own so that you don't.

d in circles and they'll run [: 00:14:00

Different types of agreements with the designers. The third step, as you bounce across the stream is called construction documents, or sometimes it's called construction drawings. What I mean by that is you have now made all of the decisions that you've been guided by your architect, your designer .

And they now have a job to do, and that is to begin getting the plans ready to submit to the city or county for a building permit. There's a lot of detail work behind the scenes that you're not even aware of that are required to obtain a building permit and also, and maybe more importantly, to convey the scope of work.

nd the specifications of the [: 00:15:00

So when you hop onto the first stone and you stand there and you work with your architect, your designers, there's a pause point there before you hop onto the next one. And that is, you start thinking about, am I satisfied? With the communication, the engagement with my designer. Can I visualize my project?

n with a designer. A lot of. [: 00:16:00

For example, stage one schematic design may be a fixed fee. It could also be an hourly fee, and we'll talk about that . Later. But what's important for you to understand is do I want to keep writing checks to the person that I've been dealing with? It's not uncommon to pause at that point and decide not to do that.

Hopefully that doesn't happen to you, but it can, and we want to do that now because the story's out there. Of people that have paid tens and tens of thousands of dollars only to realize that they're not satisfied with their designer. There's a lot of those stories out there, and the goal is so that you're not one of 'em.

I.

onstruction documents. These [: 00:17:00

In the very beginning, there might be some early discovery period with an architect to decide if you even want to purchase the lot or just some high level conversations before you actually hire them and engage with them. And then on the backside of the design process, once the construction documents are done, there's construction administration, and that's where the architect helps you manage the project from obtaining costs and budgets all the way through to deploying construction and keeping an eye on the construction as that goes on. But the three core ones, what we're talking about, I want to talk about some important aspects of this that I know.

this, and I call 'em budget [: 00:18:00

Period. I mentioned to you earlier, you're evaluating, do I even want to continue on with this architect or this designer? Are they listening to me? Am I truly committed to this project? I've now vetted out my ideas because I've been running around in circles trying to figure out if I can even come up with any solutions.

I know you're, a lot of you are doing that and you get stuck and you've been thinking about this for years. So is this designer the one for me? So that's that. Now, when you get to the Endo schematic design and you've looked at three or four different options for your new home or your remodel project, somebody's gotta say, how much do we think this is gonna cost?

it's very difficult to price [: 00:19:00

So a lot of clientele in the past. That I've dealt with have walked in the door with a quote unquote budget in mind. And after talking with people, the budget really is just a number that they've feel comfortable with or that they heard it might cost from their neighbors or, they've just gone through some high level thought processes and really had nothing to do with the design of the project or.

. And [: 00:20:00

So the idea here is that the endo schematic design, hopefully. When you're engaging with your design professional, you've asked some questions like, are there, architects or builders that you've used in the past or that you've had experience with? Where other clients of yours have used that you thought was a good experience for them?

Almost always, there's a list of contractors that architects will provide you that will. Be people that you can contact and open up a dialogue. Very early stage, but this is the type of person that you want to engage with at the early stage to decide if the project that you've gone through in step one and the schematic design is even worth pursuing.

take. The drawings from the [: 00:21:00

The really good ones have analyzed their projects, not the estimates, but the actuals of what the project costs on a per square foot basis. Or hybrid of per square foot basis plus certain components of the project. I gotta tell you, the really good builders can nail it pretty close if they have some type of data.

he expectation there. So the [: 00:22:00

Don't be afraid to engage with the architect as well on that and have them participate in a kind of a prelim budget meeting. So you've already set an investment goals we've talked about in the past. You think you're comfortable investing this dollar amount into the project. You maybe have even, hopefully you've even told the architect that , right?

So they're not designing some massive project that's outside your scope. Now you're drilling in further and you're getting a prelim budget off of some real data. Still very high level. Not a lot of detail there, but they know we're adding 500 square feet. We're modeling 800 square feet of the kitchen.

ars. And the builder says to [: 00:23:00

So now you're getting a sense of reality, right? You thought you were gonna spend a hundred thousand dollars, the architect may or may not have told you that you're nuts, that you, there's no way you're gonna do it, and proceeded with the design anyway. Regardless, you're getting some kind of sanity check before you write more checks to the designer.

Before you hire any more builders, before you spend any more money, you are now making educated choices and decisions on what to do. what could that be? That could be that you decide to do the master suite later. That could be you go out and find more money. It could be a variety of reasons.

But ultimately, you have to [: 00:24:00

I've actually experienced this myself. I hate to admit it, but I've had projects where the momentum just gets going so fast that we, not that we destroyed the project, but we had to back way up, break things out into different phases, reduce some quality selections down, and just created a lot more work for everybody and delayed the start of the project.

So this is this. Pause point, this budget checkpoint. Now you're empowered to make decisions. The next budget or pause point is after step two. Now, here's the thing about step two. Step two is design development. What's happened in design development is this is the core. This is the core part of the design process.

k occurs. You are specifying [: 00:25:00

The interior designers come in and specified all the materials. The civil engineers specified all the scope of work for outside the boundaries of the building. If you're building a, custom home. All the material, the electrical lighting plan is completed. So the electrician can actually provide a hard cost estimate rather than the preliminary one at the schematic design stage.

So the idea here with step two at the end of design development is to now go back to your builder, or reach out to more than one builder and explain to them that we are deep into the design process. We have. 90% of the material specified. Would you be open to providing a cost estimate for the project?

're gonna ask is do you have [: 00:26:00

But it's should be a quote that you can now depend on, that both sides can depend on for the project. Now you can make another decision point here where you can say, okay. Designer, go ahead and complete step three, the construction documents. Or you might say, I really am gonna option out the master suite because now I've got a hard cost.

Let's not complete the drawings for that part of the project. Let's just focus on the interior remodel. Or if you're building a custom home, you may say, let's not build the shop now let's leave the basement out of it. Even though you may have engineered that basement into the project, you still haven't built it yet.

spent some money on design, [: 00:27:00

So what's happening here is you're making educated choices. From a homeowner's perspective, what you wanna say to your architect or your interior designer maybe is just doing the project. Should we pause now and talk about cost? Would it be possible to maybe get some preliminary estimates at the end of this schematic design stage?

at question? Is really good. [: 00:28:00

You can ask them, would you be willing to work with me on that to help me find contractors or builders and get drawings to them so that they can help you with that. So you can see what's happening here is you're getting empowered to make decisions. You're protecting your experience so that you don't get into construction and realize that.

There's a lot of things that were not included in the preliminary price. Even if you got a preliminary price you could go all the way through. Step one, step two, step three, have a beautiful set of plans that looks like a big, thick fire log. That is ready to go to the building department, and sometimes people even go to the building department to get the permits and pay the fees while their contractor is pricing out the project for the first time.

blem. This is why people get [: 00:29:00

This is how you can then enjoy the experience of building your home. Keep that in your mind. Some of the biggest mistakes that homeowners make, and you can probably already figure 'em out, and what I just said I. The ones that come to mind are trying to skip the steps, right?

e okay with it costing a lot [: 00:30:00

I have yet to hear in 35 years where people said to me, oh, is that, how is that all? Is that I didn't, I thought it'd be a lot more than that. So it doesn't happen. It's usually the other case because it's human nature to gravitate towards that lower number. When people tell you, oh, it's gonna be 200 to $500 per square foot to build my home, and you have a 3000 square foot home, people instantly go to the $200 per square foot number, which is a bunch of baloney anyway.

When it's really gonna cost you 500 or maybe even more. So that's the human nature of it that gets you into trouble. But trying to blow through the steps of the design process, not specifying all the materials, skipping some of the, like for example, the architect may just put together a standard electrical lighting plan.

other and says no. So there, [: 00:31:00

A lot of times they think they're just handing over. Once they hire somebody that it's all on them, that they're gonna figure it all out regardless of the input that you've provided them. That's one of the biggest mistakes and that adds to a lot of problems. One extensive design process that doesn't need to be delays in design.

, and what I mean by that is [: 00:32:00

They're gonna be more up to speed than you are, but this is a very personalized experience and you may find things that you really love that you want to convey to them. When I start getting emails. From clientele is, I want this, I like this, I want this, I want, I know I'm in a good situation because they are involved and the other reason, there's just a lot of benefits of this, but another big one is now I know what they want, so I can specify it in the plans.

to be installed in a week or [: 00:33:00

And then it cost, $20,000 'cause of the one they like and they budgeted $3,000. This is a classic situation and a real one where people then homeowners. Say, oh my God, I've blown my budget. I can't believe it. What happened? How come my designer and my builder did this to me?

That's not always the case. There are some unscrupulous contractors out there that try to charge clientele for things that shouldn't be. But a lot of it is because it's gonna cost what it's gonna cost. Nobody figured it out in time. And eventually it comes out. So why not be in the driver's seat during the design process to make sure that you can't afford the $20,000 front door?

a wall later. We don't wanna [: 00:34:00

Part one of the book is all called Discovery and this, it's not that much to read, trust me. Or you can listen to it as an audio book. That was my little plug. But if you've done a really good job on your discovery stage, the effectiveness, the productivity of the designer is going to be. 10 times better, which means you should have enough time to pause, do your budgeting, do your contract to research, pull together a team to figure out the budget so that you can then progress forward.

sponding with what you want, [: 00:35:00

So anyway, so that is a big part. So you want, you're gonna want to have enough time in between the pause points to really. Make sure that you've positioned yourself best when it comes time to move forward. And then what's really cool is if you've done a really good job yourself and your design team knows that.

Wow, these people are serious and they really want to understand the design. They want to understand the cost during steps of the design. What's gonna happen is when you go to break ground on your project, the experience is going to be a lot better. A contractor and builder is gonna see early on that you got your, what together, that they're gonna be able to implement the construction of the project and you're gonna be able to sit back.

teed, but your experience is [: 00:36:00

All right, so here's a tip. When you're interviewing your architects or designers, ask them to walk you through their process. If they can't clearly explain these three steps and what happens in each one of them, , you may want to look elsewhere. Because you want to make sure that people have some sort of methodology.

Now, it may look a little bit different than what I'm talking about today, but the odds are it's gonna look really similar. When you're just in your very first interviewing process, ask 'em that question and they're gonna give you hopefully the answers that you want to hear. And then that will usually lead into more questions that you have on each one of those steps.

esign schematic, locking the [: 00:37:00

The pause points between steps are your opportunities to maintain control. You're not a passive participant in this process. You're the general manager of your project. And the idea here is to give you enough enlightenment so that you can actually do that. And understanding this process helps you choose the right design professionals.

rt preparing for those pause [: 00:38:00

They're your decision moments. Are you happy with your design experience, with your design professional? Have you been able to engage with a builder or contractor? Have you visited the budget? Those are the three components of that pause point.

So in our next episode, we're gonna dive deep into that first step schematic design. We'll talk about how to prepare for that big reveal meeting with your architect, what questions to ask, and how to provide feedback that keeps your project moving forward.

We'll also discuss the difference between designing a remodel versus a new home, because the process does definitely vary. But that's just the beginning of our design process series. Over the next several episodes, I'm gonna take you through each step in a much greater detail, giving you specific strategies, scripts for conversations with your design team, red flags to watch for, and insider tips.

I've learned [: 00:39:00

I hate to keep saying that, but it really is about the planning. And you do hear that a lot and proper planning, thorough planning but you don't, there's not a lot behind those statements.

So this is we're gonna build a little roadmap for you as you start thinking about doing a project. Or maybe you're in the middle of interviewing architects, or maybe you're already under construction and that's okay. 'cause you can start to think about the things that you forgot. So remember, the goal isn't just to end up, with a beautiful space.

manager of your project, you [: 00:40:00

Send me an email. It's in the, show notes and let me know what resonated most with you. And if you're working with an architect right now, ask them to explain their three step process. And see how it aligns with what we talked about today. And don't forget to visit the awakened homeowner

website. You can also look at my Build Quest co build quest.co website where you can see me talking about the application that I'm developing that will help you do a lot of this. You won't have to think too much. That's the idea. You just dive in and live in that little world and you'll be able to accomplish all of this there.

e have. I'm Bill Reid, and I [: 00:41:00