Cost of Construction

As someone that directs and designs building projects, clients often assume that I will be able to provide them an accurate and up front price to have their project built. However, it's not always easy to estimate - project price is affected by any number of factors and the combined matrix of these factors determine the ultimate cost, the primary being that I ultimately don't build the project, contractors do! In general, there are a few givens that will always affect the price of a project:

  • Location - different geographies, building codes, and economies affect costs
  • Size and complexity - will a contractor need multiple subs? is the scale and shape of the design complex? will new construction marry up to old construction?
  • Quality - is time important? materials? etc.

Architects may have an idea of a range of Construction Cost, but no rule of thumb can determine actually cost.  There is however one certainty about construction costs: owner(s) don't accurately anticipate the true cost of construction and are often surprised that their project is going to cost what the number(s) come in at.  Owners planning on building a custom house, building an addition, or renovating their existing home in New England should expect estimates to be an average of $200+ SF; and it can be upwards of $300 SF depending on location, topography, desired features, materials, size, etc.

In my previous blog:  A Fee Based Expertise, I wrote about the way in which an Architect structures their compensation. This blog elaborates on how that relates to the Cost of Construction.  An Architect may base their fee on the Range of Construction Cost based on their better knowledge of construction costs.  For the Architect to have an understanding of what their fees should be, they may conduct their own guesstimate of what they believe the cost of construction will be based on standard Basic Services, past projects, and the knowledge of specific project needs.

On Residential projects in New England, it is common for Architectural fees to run between 8 and 15 percent of the cost of construction. The range in percentage has to do with the specifics of the project and the quality and level of services offered.  A smaller percentage reflects the minimum requirements to obtain a building permit while the larger percentage reflects full architectural services and a robust drawing set required to build the ideal project with fewer surprise costs during construction.  

The best approach for a homeowner is to first know how much they can spend, and then discuss their budget with the Architect. This will sever as the limiting factor for size, materials, customization, etc.  When preparing for a realistic cost of construction, owners should understand that architectural services are an important and vital component of the total design project budget and just like how construction cost are determined by a matrix of factors so too are architectural fees.