In the early days of remodeling, few if any companies were able to design as well as build their projects. Remodeling projects for the top 10% of the remodeling market were usually designed by architects. The architect put the completed design out to bid, three or four contractors bid on it, and the low bidder was selected to build.
The architect supervised the work and approved every progress payment. His fee was 15% of the total. Unfortunately, most architects at that time didn't know the difference between new home construction and remodeling costs, and the contractor bids were almost always 25% to 50% higher than the budget. The project was either abandoned, redesigned, or renegotiated with the low bidder. Another solution was to cut back on the quality of the materials or the size of the job. As a result, many contractors shied away from bidding jobs designed by architects. Others turned their attention to the design/build approach.
How it works
With design/build, the remodeling company salesperson sells the client the job. At the initial meeting with clients, he or she explains the process and, if the project is fairly simple and similar to others the company has built, provides an initial budget based on similar past projects. If the project is more complicated, the salesperson will provide a range of costs or collect enough information to come back, after the design has been completed, with yet more cost options.
It's most often during the second meeting that a budget will be created and a design fee of 4% to 6% of cost determined and paid. Drawings are completed in a one- to three-month time frame and approved by the customer. The final contract is signed and the project scheduled. Once the contract is signed, it's turned over to the production coordinator and the architect/designer who, with the client, make materials and product selections.
Final plans are usually signed at a preconstruction conference usually involving clients, salesperson, architect/designer, production manager, and the lead carpenter who will run the job day to day.
D/B's growing popularity
The emergence of programs such as Chief Architect and SoftPlan CAD software are providing design/build companies with expanded ability to do the design in-house and at lower cost. This also means that the design/build concept can be used by remodeling contractors to target homeowners at levels below the top 10% of the remodeling market.
Obviously, design/build companies are leading the way in use of technology for project design, as well as in the ability to create an image of the finished project for customers to see and approve before anything gets started. This is even more important when renovating an existing house than when building an addition.
In most design/build operations, the owner or salesperson is the primary contact with the customers on design changes and handles any misunderstandings that might arise. If the in-house architect or designer is capable of dealing with the customer, that person is often brought into the discussion of changes or problems, with the salesperson present as well. Any design changes after construction has begun almost always go through the salesperson.
As the price of homes continues to rise, the market for design/build expands even further. As time goes by, there will likely will be less-complicated projects. This will allow remodeling contractors to offer clients pre-designed projects in the middle market, as well as offering customized versions. Remodeling contractors who have ignored this approach in the past should at least look into the concept in the future. --Walt Stoeppelwerth is a publisher of management and estimating information for professional remodelers. (800) 638-8292; email@example.com; www.hometechonline.com.