The short answer is you will need an architect to properly design your new home to get accurate pricing from contractors. However, doing some early number crunching to get you into the right ballpark (or at least in the right universe) before you bring in the professionals will save you loads of time and money. Begin this process by putting away the free drafting software you just downloaded. Instead, I want you to become familiar with your “Total Project Costs.” I’m not talking about your construction costs, but yes, that’s definitely a good chunk of it. I’m referring to hard-costs, soft-costs, and a contingency. The hard-costs are the construction costs, and the soft-costs are essentially everything else (permit fee, architectural fees, structural fees, etc.) less the contingency.
A good rule of thumb is the 75/25 rule where the hard-costs are about 75 percent of the Total Project Costs, and the soft-costs are the remaining 25 percent. Let’s say that you were hoping your remodel would cost you $500k. Does that mean you were hoping everything was $500k or just the construction costs? If that number was supposed to be the all-inclusive, final number, then our trusty calculator will prove the following:
Hard-costs: 75% x $500k = $375k
Soft-costs: 25% x $500k = $125k. Shocking. I know. You’ll thank me later.
This means that your construction budget is $375,000, but I need to throw one more curve ball at you. You need a contingency set aside for surprises, usually in the amount of 10 percent. In this example then, we need to save $37,500 for surprises, so our construction budget is actually $337,500. Make sense? There is a big difference between telling your architect to design a $500,000 remodel and a $337,500 remodel. If you neglect to inform your architect of the reality of your construction costs, you could end up paying for additional architectural fees instead of fun wish list items. Obviously, every project is different, but this will get you to stop spinning in circles and allow you to start thinking about real numbers. These numbers are what your architect will ultimately use to ensure he or she is designing something you can afford.
Check out my BOOK to learn more, and feel free to leave a question or comment. I will respond!