Confusion and frustration typically ensues when home owners seek bids from multiple contractors. Preliminary budgeting in the construction business is rooted in inaccuracies. There is always a large range because materials aren't compatible or properly specified. This makes the decision process very difficult for the homeowner.
A more accurate version of Home Building Estimation is Real Budgeting. Real Budgeting typically takes place in a design-build relationship. After an initial complimentary meeting discussing the project in detail, the builder provides meeting notes to confirm scope of project. A retainer fee is collected for the builder to spend the time ascertaining an accurate budget within the guidelines of the project. A retainer of approximately $1500 is incurred for this type of renovation project. The size of the retainer is based on the scope of the project. The retainer is refunded upon acceptance of the project. A new home requires an architect to create a real budget, therefore, a design retainer of approximately $10 - $15K is required and is not refundable.
There are several advantages for this type of fee structure. The homeowner has an accurate budget to work from because real products are associated with each item. There's much less ambiguity. It's easier to modify a real budget and stay in budget than from an estimated one. Also, this process allows the homeowner and builder to get to know each other on a deeper level thus allowing for better decision making.
With 20 years of experience budgeting, designing & building homes, J Silver Design Build knows that this type of budgeting leads to better results. We utilize this process as often as possible.
