As an architect, I have been involved with the construction of over 1000 buildings, and 95% of those have been homes. I have seen successes, failures, and have certainly learned from each of those. I know what works and what doesn’t before it happens, and when someone starts explaining an issue, I already know a solution (as I politely let them finish saying what they want to say) since I’ve already seen the same things over and over.
I can very confidently say I am an expert in my craft. They say it takes 10,000 hours to become an expert in something. I’ve done that over and over, so I must be like a 10th degree black belt in residential design and construction:)
One of the most perplexing things to me is the cost of construction. I have a decent understanding of what things will cost, but the ‘WHY’ is such an interesting topic. WHY do things need to cost what they cost. Here’s what I’ve learned:
Builders have to buy and finance expensive materials. They buy them, and they manage them, and they have to collect a payment from their client for them. They are essentially acting like a bank giving a loan until the client pays them back. They also have to finance the cost of their laborers.
Builders need to buy the correct materials. This may sound easy, but it’s like planning a chess move 10 steps in advance. The builder needs to ensure the materials they purchase will actually properly perform, fit, and be delivered when needed. If the builder is wrong about any of those, the cost impacts are outrageous. You can’t just return most building materials. The builder is stuck with the cost if that happens. Also, if the builder does not order enough, or certain materials get damaged during delivery, storage, or install (or stolen), the builder is on the hook for that too. If they need to order more materials, that could take weeks, and the cost impact of a scheduling debacle is major. This is why builders should be entitled to mark up the cost of the materials they buy. They accept a lot of risk for buying and managing materials.
Builders have to perform labor in terrible environmental conditions. Their work conditions are so terrible that it is not even legally allowed in a conventional work setting. Office buildings are required to have a certain level of light, heat, ventilation, bathrooms, air quality, etc. Builders often have NONE of that. They are subjecting their bodies to very uncomfortable conditions all day and every day, and the work they do is quite dangerous too. If there’s a job that deserves hazard pay, it’s construction. Most people don’t have what it takes to do what builders do every day.
Builders have to work around expensive existing conditions. When installing an expensive light, tub, refrigerator, etc, they are also being installed next to expensive cabinets/countertops, on expensive flooring, and pass through expensive doors, windows, landscaping, etc. At any point, the builder can F those other things up. If they do, you will expect them to pay to fix it. The cost to install a $300 toilet results in the protection of everything around it and under it. The builder is on the hook for the cost of your whole home essentially. Installing a $300 toilet on $5000 of tile with a million dollar home under it that can be wrecked with a simple leak is pretty stressfull.
Builders need expensive tools to do their job. You might use a $2000 laptop with $2000 of software and insurance and such. Builders have that too, AND they also have a bunch of other expensive things like drills, saws, scaffolds, ladders, lasers, trucks, tractors, etc. This list could go on forever, but the point is, your builder has thousands and likely hundreds of thousands of dollars of resources they have purchased to get your job done. They need to maintain, store, protect, insure, and transport all of those items to be able to do your job. The fee they charge you needs to cover those items. And guess what … it is not uncommon that they get stolen despite how well they are locked up. Getting “hit” by thieves once per year is normal.
Just like most businesses, builders need to cover their payroll. They need to find workers, get them to the jobsites, and pay their wages, taxes, and insurance, and they usually do this BEFORE you pay them for the work they did for you. Think about the thousands of dollars a builder likely paid before they started your project, and before you ever paid them. They also probably spent over 100 hours planning and estimating your project before it ever started. This is a lot of overhead expense.
The builders we work with take on so much responsibility, so I really hope our society can appreciate what they do for us. They made the place you are in right now. Someone sanded that trim, drywall, and flooring to make it nice and safe for you. After that person finished that work, he or she cleaned their fingernails and popped their blisters … and they did that for you.
Think about that as you click away on your keyboard in your heated and well-ventilated office. This is why builders need to charge what they charge.
If you’d like to learn more about our design process, visit www.josharch.com/process, and if you’d like to get us started on your project with a feasibility report, please visit www.josharch.com/help