What to Know About Design-Build Estimates
Have you ever said, “Let’s get an estimate to figure out how much it would be to do that project, and then we’ll determine if we want to take it on.”? If so, please continue reading.
It sounds so simple, and the folks who pop over to take a look at potential projects are totally happy to give estimates free of charge, right? Well… what if we told you that each of those estimates if done properly can potentially cost firms upwards of $2000 to provide?
Now, what if we told you that we sometimes receive up to five requests a day for these estimates. Add to the mix that the requestors are not intending to not take on the project for the next year, two years, five years… you get the idea. By the time they’re ready, they can’t remember who provided the initial estimate and are shocked that it’s almost doubled in price when a new estimate is drawn up?! Yikes, yes! Uncommon, no!
Not speaking for other firms, but if we were to provide an estimate for each request, we wouldn’t have sufficient time to focus on our paying clients. Keep in mind the vast majority of these requested estimates are often lost or never followed up on.
We have a very meticulous intake process, allowing us to share general price ranges based on Pacific Northwest actual costs (we recommend the Cost vs. Value guide for this!). Once we are sure our clients are prepared for what projects are costing in the current market, as well as what the expectation is for design (15-20% of the overall budget), then we are ready to come on out and see the home. This saves both our time and the clients.
We charge a flat fee of $500 to visit client homes, and sometimes no design work is actually completed during this visit. What this fee pays for is our time to review the site in person, develop ideas, and ultimately put together a proposal for design services. Some might find this steep until they see the breakdown of what goes into an onsite visit.
Here’s a breakdown of what goes into an onsite visit:
Site visit = 1.5 hours for 2 staff
Time spent in the office coordinating appointment and recording notes and imagery from meeting = 1.5 hours for design staff
Time spent establishing proposal= 3-4 hours for lead designer
Total time for design proposal= 7 hours.
Considering that the last time we billed hourly, it was at $180/hour. So, now knowing what goes Into these visits shouldn’t come as such a surprise.
Of course, we realize, some of this is chalked up to the cost of running a business and what goes into getting a job. And, this is why we don’t charge more for this visit. Here’s the thing though- we haven’t even begun a construction estimate at this point.
So here’s what a construction estimate requires:
A full set of design drawings
Time to meet with the crew, review the drawings, and answer questions: 2-4 hours, depending on complexity.
Research current material costs: (These change every day!) 2-4 hours minimum
Time for each crew member to relay time needed for each task: 2 hours minimum
Coordination with each subcontractor performing on the job site: 3-5 hours
Assembly of the formal estimate based on all of the above: 2-3 hours
Total time for construction estimate: 18 hours on average. So, with that in mind… if we charged hourly for this, that would be a $3000+ bill!
Ever wonder why contractors aren’t rolling in cash with all that markup? I’m pretty sure because all that estimating time is going unpaid, and many times has “no return on investment.”
Does this mean you should not ask for estimates?
Of course not, we recommend it! However, it is a great idea to come prepared and do your research as well. If you know that it may be a few years before you take on a project, we’d recommend holding off asking for an estimate.
Before asking for an estimate here are three considerations:
1. Talk to your designer about expectations for pricing in the region.
If your friend built a kitchen for $20k and your appointed designer says it will be an $80k minimum… the quality of design should be considered in this estimate. Do not expect that they’ll be creative and manage to get a $25-30k kitchen that honestly is an $80k job. You might be barking up the wrong tree if your cost/quality expectations don’t match the estimate provided. We estimate what it takes to get the job done correctly.
2. Be prepared with realistic expectations for design fees.
We ask our clients to fill out a questionnaire when they book a consultation with us. Some of the key questions are: “We require a full design before providing an estimate, are you comfortable with this?”, “Design fees typically add 15-20% to your budget, are you comfortable with this?”, and “What is your budget?” Now, if you come to us with a $90k budget for the estimated build, we expect that you understand that you will be paying $18,000 for design, for a $108k budget total. We also hope you understand that we will not be doing just a concept to keep your pricing low. The design fees exist to establish proper guidance and thorough estimation of the assignment.
3. Know that multiple revisions of the estimate are not reasonable.
We line-item the estimate as much as possible and are happy to make adjustments if we look it over and decide “yikes, that backsplash is pricey! Can we bring the cost down?” We will want to discuss how much lower the estimate needs to be so that we can find a replacement that you are more comfortable with. However, we will not be able to continuously source an alternative, price that out, then source another and price that out, so on and on. We aim to prevent churn and maintain vision and quality over the pursuit of a less costly and often substandard alternative.
Do you have your own experiences with estimating, or helpful advice for others? Please share and leave a comment below.
