In this mailbag episode of Home: The Second Story, we answer three questions that come up early in almost every home project. First, we talk about the fear of missing hidden constraints before buying a property or committing to a renovation. We walk through the kinds of issues people should investigate early, including zoning, setbacks, easements, drainage, septic limitations, wells, and utility concerns. We explain that these questions often involve multiple layers of rules and that what looks simple on the surface can quickly become more complicated. Our main point is that bringing in an architect early can help homeowners make sense of those moving parts before they get too attached to a lot, house, or idea that may not work. Often, the operative question is not what, but how.
We also talk about what to bring to a first meeting with an architect. Inspiration images, Pinterest boards, a survey, and a rough budget are all helpful, but we say the most important thing is having a sense of your priorities. You do not need to arrive with every detail figured out. In fact, part of the process is discovering what matters most, what tradeoffs are worth making, and what ideas may not need to stay on the list. We explain that good design starts with honest conversation, clear goals, and a willingness to engage in the process. We also underline how important it is to share your budget early so the project can be shaped around real expectations. And while you should bring your own opinions, you don't need to crowdsource every idea before - or after- meeting with us!
Finally, we dig into the question of what a custom home or renovation will really cost. We break down why price per square foot is only a rough starting point and why homeowners need to understand the difference between a full project budget and a construction budget. We talk about the many expenses that sit outside the build itself, including land, design fees, consultants, financing, furniture, contingency, and temporary housing. We also touch on allowances, soft costs, and the risks of vague contracts or unrealistically low estimates. Throughout the episode, we come back to the same advice: start strong, ask questions early, understand what is actually included, and work with professionals who will tell you the truth before the stakes get higher.
(00:00) Intro
(02:36) Why zoning rules are harder than they look
(06:16) Surveys, setbacks, and easements
(12:14) Wells and water access
(13:04) Hidden constraints in renovation projects
(14:59) What to bring to your first architect meeting
(17:28) Why priorities matter more than perfect ideas
(21:41) Budget honesty from the start
(25:28) Why price per square foot is only a rough gauge
(30:39) Spec homes vs true custom homes
(35:27) Allowances and soft costs explained
(38:24) Consultants, code requirements, and surprise expenses
(42:28) Contracts, change orders, and cost structure
(45:22) Final takeaways on starting strong
(49:00) Outro and how to send questions
Sheri Scott (00:00):
Hi, and welcome to a mailbag episode of Home: The Second Story. I'm Sheri Scott in Cincinnati, Ohio, with Springhouse Architects.
Marilyn Moedinger (00:09):
And I'm Marilyn Moedinger with Runcible Studios, based in Lancaster, Pennsylvania, and Boston, Massachusetts.
Sheri Scott (00:12):
So, mailbag, Marilyn. We're answering questions that people have asked us.
Marilyn Moedinger (00:22):
These are so fun. And by the way, I don't think I'm giving away any spoilers, but we have more questions in our list than we're going to go through today. And so, there's so many good questions to go through.
So, I guess, also if people listening have questions, feel free to write in. You might hear your question read out on here (laughs).
Sheri Scott (00:43):
Absolutely. Okay, so, our first question, the main question, is, “Are we missing anything?” And this gets to the anxiety piece of starting a new project and doing those things, like, “How do I actually leap, take the big leap?” And “How do I know what I don't know?”
So, they say, “We found a property we really love, but before we buy it, I'm worried there may be things we don't know yet. Like zoning issues, draining problems, setbacks, septic limitations, or something else expensive.”
“From the outside, it looks perfect, but I'm afraid of falling in love with a house or lot before understanding the real constraints. What should people investigate early?” All of those things.
Marilyn Moedinger (01:32):
Well, all those things.
[Laughter]
Sheri Scott (01:34):
They listed a lot. Yeah.
Marilyn Moedinger (01:36):
And maybe the question is better. I'm not trying to rewrite the question out of the gate, but what should they investigate? But also, how? So, I think we should get into how, because we can make a list and say, “There you go. There's your list. Go investigate this stuff.”
But the very next question is, “Well, how do I do that?” Like, “Who is that? Who do I call? What do I do?” So, maybe as we make our list, we can kind of indicate who is that that they should call?
So, let's start with their list. There are things they don't know: zoning issues. That's true. So, you want to make sure … so, almost every jurisdiction, even if it's rural or whatever, will have some sort of zoning situation.
So, zoning is usually always public record. It's usually on the website or the town or city or county or whatever website. But as far as interpreting that, that's something we do. So, you can call an architect (laughs).
Sheri Scott (02:36):
Yeah. Yeah, that's the easy answer.
Marilyn Moedinger (02:38):
That's the easy answer.
Sheri Scott (02:40):
There would be cost associated with that for time, for research, and just basic knowledge. But people can research it on their own.
Marilyn Moedinger (02:50):
It's all public record.
Sheri Scott (02:52):
One thing I would say, it is public record. But even for us, we don't do a lot of zoning research, not like you do, Marilyn, where you work. Ours is much simpler. But there are always surprises, even for us.
I'll give you a real-time example just this week. We are designing an addition for a client kind of in a historic neighborhood, and they want to add a garage. Well, technically, they're allowed to add a garage to the front of the house, which usually is not allowed.
So, right at first, I was like, “Red flag, I'm not sure we can do this. Let's look into it.” It turns out they can do an attached garage in the front, and we could design it, and it would be lovely.
But the front yard setback is 30 feet. But then you have to actually go like three levels deeper to find that they say, “Yes, it's 30 feet.” But it's actually … that's our first line. But then you also have to average the three houses on both sides of you on the same side of the street and average that.
Marilyn Moedinger (04:03):
On either side, yep. Contextual setback.
Sheri Scott (04:07):
It's difficult. There's so many layers, and there's nothing that says, “Okay, you're at the last layer.” Sometimes, you get very involved.
Marilyn Moedinger (04:19):
Yeah. And I would say that there are multiple people who can help with this question. So, the architect can help. And I'm not just being biased when I say that. That really is your best option. Because the architect is thinking about design as well.
Whereas a zoning officer might say, “Well, yeah, you can do that.” But they aren't thinking about building code compliance, or they aren't thinking about what it might look like, or the usability.
Same thing with a zoning attorney. So, on most of our projects in the Boston area, we have a zoning attorney on most of our projects because the situations are very complex.
And so, sometimes it'll just be a few hours of a zoning attorney's time to check in and say, “Hey, we're trying to do this, and we know we might need a variance, but have you seen that that's been successful in the past?”
And sometimes, a zoning attorney will say, “Yeah, that's one that I see go through all the time because I'm always before the zoning board,” or “No, there's no way you're ever going to get that.” And for a few hundred dollars, you find out that it's not worth pursuing that option.
Sheri Scott (05:25):
And that's a great question to see because people ask us all the time, “Can we ask for a variance?” Sure (laughs). You can always ask. The question is, “Is there any kind of precedent that we think it would be worth our time?”
Marilyn Moedinger (05:39):
That's right. And the zoning attorney has that unique knowledge. But they don't have the design knowledge. So, they might say, “Yeah, you can do this variance, but can you do that from the perspective of other things you might be considering?”
So, I think really the architect is (as usual) the one who's sort of in the middle that everybody is kind of pointing to. Also, your builder cannot generally answer these questions. And they will tell you that too (laughs).
So, that's what we do. And I think it really depends on what jurisdiction you're in as to whether zoning becomes a factor. And setbacks was another thing in this person's question. So, same thing.
Like, “Can you add on to the house?” Oh, wait, there's a setback that says you can't build in that area or there's an easement or something. So, one of the first things you want to do if you're serious about a project is get a survey.
And if you haven't bought the land, you obviously don't want to pay for a survey, but you can ask (let's say it's a property for sale), “Is there a plat, is there a survey that I can review?” So that you can see where those property lines are, and you can see whether what you're thinking about might be possible there.
Sheri Scott (07:02):
Yeah, and you want a full engineered survey. I've seen lots of surveys that are just the corners.
Marilyn Moedinger (07:10):
Yeah, or the plot plan.
Sheri Scott (07:11):
Yeah, the plot plan. And if you're ordering your own, be sure to talk to the surveyor and say, “What kinds of things can you research?” We've had different surveyors do different things for us, and it just depends what their services hold.
But they will research easements, the setbacks, which could be from the county, they could be from the town you're in, they could be from the HOA you're in. There are lots of layers to setbacks and rules like that as well.
Marilyn Moedinger (07:43):
Absolutely. And I think that leads into one of the other questions that this person's bringing up, is drainage and septic. And when you have a full engineered survey with topo, it should show you if there's any existing septic, old septic drain fields, which you want to know about (laughs). If there are limitations.
So, that's often something that comes up when you're doing an addition. If you're on a septic system, the first question is, “Can the septic system that exists handle another bedroom?”
So, septic systems are designed for bedrooms, not bathrooms. You can have as many bathrooms as you want. What they care about is how many people live there and are using them (laughs).
Sheri Scott (08:29):
Right. Yeah, they count the bedroom as a room.
Marilyn Moedinger (08:32):
That's right. Yeah.
Sheri Scott (08:33):
And a hot take: your septic system probably will not support it (laughs). Around us the septic systems, the designs have gotten much more stringent just in the last five years, but for sure, in the last 10 years.
And we rarely can add a bedroom without in some way extending or totally replacing the septic system.
Marilyn Moedinger (08:56):
That's another example of where the septic rules might say one thing and the zoning might say something else related to the septic. So, where the septic field can go might be in the zoning code, not in the septic ordinances.
And I've seen this where you read through the whole septic code or ordinance or whatever regulations. And in the zoning, it will say your septic field needs to be one bedroom bigger than the number of bedrooms you have.
I came across that one time that was in the zoning code. And I had gone through the septic code, and I was like, “Looks like we're going to be fine.” And I called the jurisdiction because it was one I wasn't used to working in.
And they're like, “Oh yeah, this trips everyone up. It's over here in this other code.”
Sheri Scott (09:45):
Right. That's what we're talking about. There (are) layers. You’ve got to peel the whole onion.
Marilyn Moedinger (09:51):
But I will say too, that that's at least working in the city, that's one thing we don't have to worry about, is septic field.
Sheri Scott (09:59):
Well, I was going to say, we are used to doing septic on larger lots, and there is a person that designs septic systems, and you have to get your soil tested, and they will lay out your lot. You give them an idea.
You don't have to design your house, but you tell them, “I'm going to have a four-bedroom home, and it's going to be about 3,000 square feet,” or whatever you're going to be. And they will literally draw on an 8-and-a-half by 11 piece of paper that has a crude site map on it.
They will circle, “You can do it here. You might be able to do it here.” Or they might say, “You can only do a two-bedroom house on this entire lot because you do not have enough space. Not enough … the perc test doesn’t—"
Marilyn Moedinger (10:47):
Or it doesn't perc. Yeah.
Sheri Scott (10:49):
Yeah. So, you can do that ahead of time, and it's not super expensive. A couple hundred dollars.
Marilyn Moedinger (10:54):
No, exactly. And that's one of those things when you're buying a house, you should scope the sewer line to make sure. This is another one of those things when you're looking at investing in a lot to build your home, this is kind of the same thing, like, “Does this land perc? And where?”
I actually had a project that was 150 acres, and there was about half an acre that perced. All of it was protected wetlands. They actually didn't quite realize it was that extensive. So, it was—
Sheri Scott (11:27):
Well, who'd think that? It's amazing.
Marilyn Moedinger (11:30):
Yeah. It was just the side of a nightmare. And so, we had to go down this road of, like, “Okay, are we doing a sand mound or something like that?” Which is really ugly, but you see them all the time.
So, it's that in someone's yard, you see a big mound with white pipes sticking out. So, that's a sand mound. That's because the soil below doesn't perc. And “perc” means percolate, basically. That's what it stands for.
[Laughter]
Or that's what it's short for. I was like, “Wait a second.”
[Laughter]
Sheri Scott (11:58):
We just say it. I don't know.
Marilyn Moedinger (11:59):
And that means, like, “Is the soil too wet?” If it's too wet, it will not absorb the materials from your-
Sheri Scott (12:10):
Yeah. Because you need it to filter. You need it to filter so you end up with clean water.
Marilyn Moedinger (12:14):
That's right. So, along with that, a well. So, you also want to make sure if there's not a well, if you're buying a lot and there's no well and there's no public water, you need to make sure you can get a well.
Because if you can't, then you don't have water on your — so, have you ever worked with a dowser? A water sniffer?
Sheri Scott (12:38):
The witchy guy who goes out with a stick?
Marilyn Moedinger (12:40):
With the sticks. Yeah.
Sheri Scott (12:41):
Yes, it's crazy. And I swear, on any given day, I would say, “There is no way that works.” And then every time, I'm like, “Oh my gosh, he was right. How?”
Marilyn Moedinger (12:53):
I don't know, I don't know. There's some mysteries in the universe that we're not going to solve here on this podcast.
[Laughter]
Sheri Scott (12:59):
But yes, it's fascinating. And I still don't know if I believe it, but it works.
Marilyn Moedinger (13:04):
But it works. So, we're talking a lot about lots right now. I think we can chime in on houses maybe a little bit. Are we missing hidden constraints? But I think if you're buying a house to renovate, I think it's the same thing.
You want to check the zoning if you're trying to … this is another hot take. Don't always take your realtor's word for it that you can do an addition or finish the attic or finish the basement.
I have worked with so many people who bought a house and the realtor said, “You can finish the basement,” where in jurisdictions in Boston, you can't. That adds to your livable square footage, and you'd have to do all this other stuff.
So, they are not usually trained to have done that analysis. So, can you finish it? Well, physically, yes, you can. But can you in other regards? Electrical service is another one we run into a lot.
So, it's underserved, so we have to do a whole new service. That's not a huge deal. But it's still, it's not nothing. But, yeah, I feel like we could do an entire podcast episode just on this. So, maybe we can bring this one in for a landing and-
Sheri Scott (14:14):
We’ll move on. So, there are a lot of things that could be potentially hidden constraints and that could get quite expensive.
Marilyn Moedinger (14:22):
Yeah, in conclusion (and I really do think this is not just us being biased), having an architect who has experience doing the type of work you're trying to do to help guide you through those early steps is really important.
Maybe it ends up being a few hundred dollars or even a couple thousand dollars of their time. But if you've saved hundreds of thousands, or even more than that, because you didn't end up with a lot or a house or something that isn't going to work, then that's smart money to have spent.
Sheri Scott (14:56):
Yeah, for sure. And a lot of heartache.
Marilyn Moedinger (14:59):
A lot of heartache.
[Laughter]
Yeah. Alright, well, this next question kind of flows into that. When you're meeting your architect for the first time, what do you bring to that?
So, here's the question, “We're finally ready to talk to an architect, yay, (laughs), but I feel oddly unprepared. We have Pinterest boards, rough budget, a survey, and a lot of opinions, but I don't know what's actually helpful versus overwhelming. What should I bring to that first meeting to make it productive?”
Sheri Scott (15:34):
Not everyone's opinions (laughs). I thought it was hilarious that they said, “We have a lot of opinions.”
Marilyn Moedinger (15:40):
If it's their opinions, that's okay. But, like-
Sheri Scott (15:42):
It's their opinions, of course. I was figuring it was the neighbor and the in-laws. We get a lot of those stories like, “Well, we took your first design, and we took it to a cocktail party, and we all talked about it, and this is what they think.”
[Laughter]
But in reality, sounds like they're pretty prepared.
Marilyn Moedinger (16:10):
Yeah, this sounds amazing actually.
Sheri Scott (16:12):
Yeah, I love pictures. I always say it's easier for us to … it doesn't have to look exactly like you want it to look, just bring things that you like that we can put up on the screen in the conference room and talk about.
“What do you like about that? Do you like the colors? Do you like how it's laid out?” And then if you do end up with something, like, “Oh, this side of this house plan really works for us," we get that a lot.
They're like, “But I can't figure out how it goes with the rest of the house that I want,” and that's my job.
Marilyn Moedinger (16:46):
That's our job, yeah.
[Laughter]
Sheri Scott (16:48):
So, just bring your ideas. Bring things that spark a conversation because that's really what we need to do in the first meeting.
Marilyn Moedinger (16:56):
Yeah, agreed. And I want to underline that. What you said about, you don't have to have it figured out. That’s what we do. So, it's okay if you're like, “I have these 17 ideas and I don't know how they come together.”
Well, that's why we're here. Tell me all of your ideas, and I will find a way to figure out how to get as many of those in as possible. Now, that being said, something that they didn't list that I think would be helpful to think about ahead of time is your priorities.
Sheri Scott (17:28):
Oh, that's good, yeah.
Marilyn Moedinger (17:30):
And sometimes those priorities change as you get into the design. So, for example, I just met with some clients recently. We just started a design for them, we’re renovating their home.
And they gave me this this amazing list of like, “These are our priorities. This is what we need. We need two offices for Zoom. We need this, we need this, we need this, we need this.” And so, I came back with options having all that stuff.
And they were like, “Oh, hmm, we don't love this.” And it turned out that they didn't need all of those different spaces. And it wasn't until it was all fleshed out that they saw, “Oh, wow, if we have all of these different separate spaces, that's really impacting.”
Because we're not adding on to the house, we're just using existing spaces and kind of reconfiguring. And they were like, “Oh I guess we didn't need that,” or “I guess we didn't …” and my response was, “Well, then this has been a perfect meeting.”
Because it's not a bad thing at all for you to show up with your list of priorities, we draw it. Because guess what? It is so much cheaper to move lines around on paper. There's no failure here. We're not going backwards; we're not whatever.
You're realizing through this process that you don't need all that stuff or you want other things instead of this. So, have your list of priorities, but be ready to have that adjust as you go through the process.
Sheri Scott (19:01):
Yeah, that's really good. It’s one of the things I have a course that people can go through with a workbook. And that's one of the segments; is to just work through your priorities. We ask questions like, “How do you want to show up at the end of the day?”
And through thinking through those questions that we ask, it kind of narrows everything down, and you realize, “Okay, this is what my priority is.” And then you make decisions through that lens.
And it just helps instead of — I think a lot of people get nervous about some of this stuff because they think, “How am I ever going to make all of these decisions?” When it's all just random up in their head.
But as soon as you start prioritizing things and making processes and ways to make the decisions easier, it becomes more fun.
Marilyn Moedinger (19:57):
Well, and we've talked about this in various ways, over and over on this podcast, but we are here. Architects, one of our main roles is to help people through the decision-making process. To help people weigh the options.
To be there to say, “Well, yeah, you guys said that you wanted two offices. What's behind that? Let's dig into that.” “Oh, well, we're …” and I'm making this up. This isn't what they said.
But one of them might say, “Well, I always need the door closed because I'm always on Zoom meetings and I don't want to disturb the other person.”
And the other one says (whatever the case may be), “I always want a door closed because my office is really messy. So, I just want to close the door and not see the mess when I'm not in there.”
Well, okay, what I'm hearing is that there's different reasons. One is visual and one is auditory. So, there might be other ways to solve some of those problems. When are you working in your office?
“Well, I'm a night owl, so I'm there late at night.” “Oh, I'm a morning person. And so, I work from 7 a.m. to 3 p.m., and that's my workday.” Or whatever. So, we're helping people uncover this stuff and help them make decisions.
And I think I would weigh — I think I would answer the question of, “What do you bring to the first architect meeting?” All the stuff they talked about, yes. And also, a willingness to engage with the process.
A willingness to go with us, to have those conversations, to take part in the path, in the process. If you just are like, “No, this is what I want. I don't want. I just want this.”
Sheri Scott (21:30):
Yeah, that's good. That's really good.
Marilyn Moedinger (21:31):
Then you're wasting your money working with someone who's going to come up with something that's even more than what you would have come up with on your own.
Sheri Scott (21:41):
Right. And just because we talk about it every time, I'm going to highlight one more time; to share your budget. Because that's where we start. I know we're beating a dead horse sometimes with these things, talking about them again and again, but it's very important.
Your budget can be whatever it is. We will not judge it. We will not question it. Just tell us what it is (chuckles). And then we can go from there and we can counsel you and get to a good product.
Marilyn Moedinger (22:09):
Well, and also, the key is that not only do we not care about what the budget is and we won't judge, we also don't mind if it's not a big enough project. So, I've had people come and say, “Well, this isn't big enough for you.” I'm like, “Well, right.”
So, then I'm going to counsel you to work with a professional who's — because we do major renovations in full big houses. We don't do the smaller renovations. But as a homeowner, if you're truthful with the person you're talking to, then I can shuttle you to the right professional who’s going to be the right fit.
But I also want to say about budget too, is to remember. So, I often hear, “Well, if I tell you my budget, then you're going to spend it all.” Well, yeah, I am because that's what you told me you wanted to spend.
So, if you have a budget of $100,000, I'm going to spend $100,000. Don't get mad at me for spending $100,000. If you only wanted me to spend 75, tell me 75, and then I'll spend 75 (laughs).
But the other part is (and then I'll get off my budget soapbox) to make sure that you understand that just because you said a budget number of $100,000, and then you listed a million things you want in your house, those things might not line up.
So, just because you said a number doesn't mean that's enough to do everything you want to do. And in fact, spoiler alert, it never is. Everyone's budget is always smaller than their wishlist. Those are the rules of human nature, I think.
[Laughter]
Marilyn Moedinger (23:46):
So, then our job is to help people say, “Okay, well, is it worth it to you to add more to your budget so that you can afford more things?” Or the other way. “What things can we take out of the shopping cart to align your budget?”
Sheri Scott (23:59):
And the earlier we can have that conversation, the better for the entire project to align that first. I was going to move on to the next question because it has everything to do with budget.
Marilyn Moedinger (24:10):
Oh, great. Perfect.
Sheri Scott (24:12):
(Laughs) I thought we could just slide right into that one. And this is a … they're very succinct. “How much will it really cost?” That's a hard one to answer. How much will it really cost?
So, they say, “We're thinking about building a custom home. When people talk about costs, it feels like everyone is using different math. Some talk about price per square foot, others mentioned site costs, allowances, and soft costs. And I can't tell what's actually included. How can homeowners understand the true all-in cost of a new build before committing emotionally?” Woo, yeah. The emotional commitment is — that's where your heart breaks.
To start from the start, this person is exactly right. That you don't know what the definition is. Cost per square foot. That seems like it's pretty clear-cut, even though that's a pretend number and doesn't mean anything. It is a gauge that we use in my office to say, “Custom homes, we're starting around (in my area) $350 a square foot, goes up to 800.”
Marilyn Moedinger (25:28):
The sky's the limit, yeah.
Sheri Scott (25:29):
For our purposes and what we design, that's kind of where we start. So, if that's not their comfort zone, then we're not the architect for them. However, we need to at least talk about what is price per square foot.
Because I was just talking to a guy, and he's actually a builder. So, we were talking, he's like, “Well, what do you mean when you say per square foot?” Because he's like, “I talked to another guy, and they count every porch and every overhang, anything that's under roof. But then if there's a patio, that counts too.”
And so, you just have to know what the definition is. There's so many different ways. Some people do heated square footage, some people do under roof. Some people do any kind of surface. So, the calculation and the number (the 350 per square foot) means nothing unless you know how we're counting those square feet.
Marilyn Moedinger (26:23):
And I would say that the price per square foot metric is for getting to the parking lot of the ballpark. That's it, it's a very rough number. It is +/-20%, or maybe even 30%.
It is not a number that you use to say, “Okay, great. I want to save X dollars, let me chop off seven square feet, and then I will be able to meet my...” It doesn't work like that because not every square foot is the same.
A square foot of kitchen is way more expensive than a square foot of living room or whatever. So, it's like talking about how much a car costs per pound. It might be useful in some ways, but it doesn't really tell us the full story.
So, I think, to me, price per square foot is a good (like I said) parking lot of the ballpark price. So, not ballpark, parking lot.
Sheri Scott (27:21):
Yeah. Are we even talking about the same thing?
Marilyn Moedinger (27:24):
Yep. And that way, you can say, “Well, okay, I'm thinking about a 3,000 square foot. Sheri just told me 350 is the low end. So, maybe if I'm trying to do some nicer things, it's going to be more like 450 or 500.” Is that even in the realm of possibility?
Sheri Scott (27:45):
So, that's $1.5 million for construction of the home. And there's so many (chuckles) more things that add on like they alluded to, soft costs. But that does include allowances, and it does include a finished home.
Marilyn Moedinger (27:59):
Right. And I think we talk about or I talk to my clients about project budget and construction budget. So, those are two different things. So, word to the wise, when homeowners talk about budget, they are talking about project budget.
So, they're talking about all in. They're talking about the furniture, they're talking about the architect's costs, they're talking about the land costs. They're talking about the money they have to spend to live somewhere else while their house is being built or whatever.
When people in the industry are talking about costs, they're talking about construction costs, which doesn't include any of that stuff. No land costs, no architect, no furniture, no financing costs, no relocation costs. Just the cost of building and finishing the house, that's it. So, then all that other stuff is on top of that.
So, I have a little worksheet that I send to people that basically says, “Take your all-in number.” Let's say it's $1,000,000, and that's what you have to spend. By the time you're done subtracting everything out: contingency – we've talked about contingency on here before.
So, you subtract architect, contingency, land costs, financing costs, furniture costs, whatever, and you might be left with a number that's more like $600,000 and not a million.
Sheri Scott (29:26):
For construction costs, right?
Marilyn Moedinger (29:27):
For construction. So, it's important to get that math right. And this is another one of our broken record moments: do it early (laughs). We're here to walk through that math with you guys as homeowners and see where it comes out.
Sheri Scott (29:44):
And it just keeps getting more and more narrowed in. More and more focused as you work through the process. So, we use square foot numbers to see, “Is this even a project? Is this even … does this make sense? Do you already have your land? How are we adding all of this stuff together?”
And we have a calculator too, a spreadsheet that includes land costs. And “Is your land very difficult to build on? Are you clearing a forest to put your house on it, and it's on the edge of a cliff?” Which is one of my favorite lots that I get to design homes for. Or “Is it the middle of a farm field, and you just kind of have to drive a truck up to it and dig a hole?”
So, those things are variables as well, that you can pretty early on at least take some big swings at and get an idea if this is really a project or not.
Marilyn Moedinger (30:39):
It also depends on how you're going to execute the project. So, if you are going to a builder who's building you a spec home, they have in-house design services, meaning you're going to pick one of three kitchen packages, one of three primary bath packages, whatever.
Then that's a very different cost model. That is an all-in. You're not paying separately for design. And if you're looking for a custom home, that's not going to be it. So, that's a spec home.
If you go to a builder and you say, “I want to build a custom home, and what's it going to cost?” And they say, “Well, we're usually building in this range of square foot price,” again, just to give you that parking lot of the ballpark number.
But then they say things like, “Design is included.” You need to understand what that is. Because design is a huge factor, it costs a lot. It's a real job, turns out. It's a whole other separate job with a ton of work that goes with it.
So, if it's “included,” what does that mean? Does that mean, “Oh, well, you get to pick one of three pre-designed kitchens?” Or are they including design, and it means you're working with an unqualified designer who's not going to meet your expectations?
And I've seen this too, where they charge, “It's included, but it's not free.” So, it's funny, it's like the way that people think about, they're like, “Oh, well, the design is included with that builder.” And I'm like, “Right, but it's not free, the builder's charging you”
[Laughter]
It's just baked in such that you can't see it as a separate line item. But if you show up to a builder with a set of drawings and an architect, that build cost will be lower. Or should be, if they're not being squirrely about it.
Sheri Scott (32:34):
Yes, it should be. And the other option is design is free because they don't do
anything. You can go get a plan online, or you can use a plan they've already built if they designed it and have the copyright to it.
That would make your design free with their process. And if they just send you to the tile shop and they send you to the appliance showroom, well, that's free too, because you're not getting anything (laughs).
Marilyn Moedinger (33:07):
Because you're doing it.
[Laughter]
Sheri Scott (33:08):
Because you're not getting anything, there's no service there.
Marilyn Moedinger (33:11):
Here's what I want to underline about what you just said (laughs) – the cost of design, even if you're not paying for it, like in that situation where you just described, where the builder is basically saying, “Go pick out all your stuff.”
That has a serious cost to it. So, will you see a line item? Will you be writing a check to an interior designer or writing a check to an architect? No. But you will be paying the price, basically.
And you don't … as a homeowner, unless you're a trained designer, a trained architect,
then you're not going to have the knowledge it takes to make all those thousands upon thousands upon thousands of decisions.
Most people have no idea how many decisions there are to make. And I think that's the part that I have the biggest caution for folks. It’s to say, when we're talking about how much it will really cost, remember your time factors into that as well.
So, if you have a builder who is the bargain basement builder, you've decided to not hire a designer, you're going to do it all yourself, that dollar amount that's on the piece of paper is going to be lower.
But your time is going to be completely decimated for the next 12 to 18 months. And also, the project will end up costing more than if you have professionals do it.
Sheri Scott (34:28):
For sure. And mistakes. We talk about selections a lot of time and going and picking out tile and knowing what to pick and what colors and all of the things.
But one thing we don't talk about very often is the cost of documentation and how documentation saves a lot of heartache, a lot of things during construction. If you document things well, you know more about lead times.
It's a better process and leads to a better product and a better experience that you have. And this thing that you dreamed about, and that you want to see through, and just having someone there to document it helps a lot.
Something else that this person asked about, which I think we should touch on (but would take a whole another episode) is allowances and soft costs.
Marilyn Moedinger (35:27):
Yeah. So, we can bookmark that for future and give our super quick answer. But allowances is a classic “gotcha” with contractors who are not being—
Sheri Scott (35:38):
It’s so tricky, it's so tricky.
Marilyn Moedinger (35:40):
So, allowances are basically the contractor will give you a cost for a project and for any item that is not chosen already. So, plumbing fixtures, countertops, cabinetry, they will put an allowance in, and it's just a placeholder number.
And that placeholder number is what you have to go shopping for those plumbing fixtures or for those countertops or whatever. Well, the sneaky thing is when they put a number in there that is so low that there's no way you can get the plumbing fixtures for that.
So, it says plumbing fixtures, $1,000. You can't get a four-bedroom house's worth of plumbing fixtures for $1,000. Or they'll say tile, and it also includes the backer board and the KERDI system and the drain, and the Schluter and whatever.
And you're like, “No.” (laughs) So, then it's half the amount that you need. So, that's really sneaky because then the builder can say, “Well, you picked all this stuff, it's your fault that it costs so much.”
And you're like, “Well, you didn't give me a realistic number to start with.”
Sheri Scott (36:45):
Yeah. We talked about it, it's tough. And that's a point where a third party that's going to be your advocate is very helpful. And if you're doing it yourself and you have to or want to, just comparing allowances from three different builders.
Which you can't do if you're using the builder's designer. So, that's also a faulty part of that. Soft costs, I think we touched on that a little bit. Obviously, the architect is considered a soft cost, any designer.
There are a lot of things that come up that as you go through a process, and it would be good to identify these in the beginning, are different consultants. So, I know you and I both have lists of different consultants.
I think we may have already done an episode on what consultants are in a project like this. But take some time to compile that list or talk to your architect or your builder and find out like, “What consultants do you use?”
Do you use a lighting consultant, a security consultant, a sound consultant (chuckles), all of those things? You don't have to use all of them. You probably don't have to use any of them if you're doing a smaller project.
But have an idea because those costs add up, and you end up feeling nickeled and dimed because, “Okay, now, I got to pay this guy to do my security system when there's a line item in the builder's budget for security, but not for the consultant.” So, that's something that I've seen.
Marilyn Moedinger (38:24):
It's a good point. We lose a lot of work in Massachusetts (I'm going to be frank) because we are really upfront about the fees that need to be spent either with consultants or other things as it relates to Massachusetts energy code, which is extensive.
So, a lot of people doing a renovation, and there's all these rules about renovation. So, if you are doing an addition that's less than 1,000 square feet, or if you're disturbing less than a certain percentage of the house, then you don't have to meet energy code.
But if you are doing certain types of things, you have to bring the entire house up to modern energy code. I might not even be touching any of the windows, but if you trigger that, you have to change out all of the windows in the whole house.
Sheri Scott (39:09):
Yeah. We're getting there, we're not there yet in Ohio.
Marilyn Moedinger (39:13):
And it's coming for everyone. It's all coming. So, in Massachusetts, it's here. So, there are certain consultants that are now required by code. So, a HERS rater is required. It's not huge, it's $3,500 or whatever. It's not crazy, but it's also not nothing. $3,500 is money.
Sheri Scott (39:34):
Absolutely. If you're writing that check.
Marilyn Moedinger (39:36):
And if you're writing the check and you have to find that person. So, we have everybody. We're ready to go. We know what we got to do, there's no surprises. We already know here are the people we got to hire. We put that into our initial proposal.
We tell people, “If you're doing a renovation like this, you need to understand that your budget needs to basically double or triple if you are doing all of the things you want to do.” Because now, I got to bring the rest of the house up to code.
We lose a lot of work because people don't believe us. It's still new enough that people just don't. And then I turn around and I check on that project a year or two later. It hasn't even started; they never did it. Or it's much, much, much smaller.
And I'm like, “I know, that's what I told you.” So, how much will it cost? Remember that, especially in renovation, there are so many little tricky things like that that might be jurisdiction-related.
People always say, “Well, I want to do my bathroom, I want to do my kitchen, I want to do this, I want to put the addition on.” And then I'm sitting there going, “Well, you're disturbing half the house,” I should probably update that 25-year-old HVAC system. I should probably update your wiring. I should probably do you a new roof.
So, while you're at it, you need to do those other things. It's really stupid to tear apart your house and not do that other stuff. So, now, that stuff is a few hundred thousand dollars’ worth of work that you weren't planning on. And suddenly, the budget for doing the kitchen and the addition is much smaller.
So, how much will it really cost is also about understanding. So, this person was asking about new build. I'm going ahead and talking about renovations in here because that's what we do a lot of.
But that kind of thing is when I have those conversations; I actually feel really bad because most people were on the phone and they're shell-shocked, and I'm like, “I'm sorry.” But I'd rather give people real information.
But it can be a little startling to learn the reality. So, as usual, have good professionals.
Sheri Scott (41:37):
Have good professionals and do your work early. Dig in and really understand what the entire project is going to take as early as you can because that's the only way. The other thing they asked is, “How do I know what’s included?”
You have to have big conversations. You can't just be like, “Okay, does that include everything? (Laughs) You need to sit down and really understand your contract.
Understand how that builder or architect or whomever you're talking to first, how they include things and how things go throughout the project. What's going to be added in? And it's a good question to ask a builder when you sit down with them the first time, if you're deciding to hire them.
Marilyn Moedinger (42:28):
Well, and this gets into all sorts of other things related to contract structure. How much will it really cost? Well, are you fixing the price and there's going to be change orders, or are you time and materials?
Sheri Scott (42:38):
Yeah. We should do that as a full snack.
Marilyn Moedinger (42:41):
Yeah, we should do it. Yes. We should talk more about that. We've talked about contract structure in various other ways, but I think that would be a good one. So, mental note for everybody.
But yeah, how much will it really cost? You can see, we could spend an hour just on this topic because it's super complex.
Sheri Scott (42:58):
Well, it's complex, and people get screwed over all the time. We should talk about it all the time because when things go sideways, more than 50% of the time, it's because of money.
And the more we can figure out and the more we can educate people and the more they can go in with their eyes open, the less tragic stories we're going to get.
Marilyn Moedinger (43:23):
Right. And there's also, people don't even realize that (at least in Massachusetts and Pennsylvania, the states where I work in predominantly) there are consumer protection laws that protect you specifically.
There's renovation and small project laws that protect you specifically from this type of stuff. But even if your contractor has you sign a contract that doesn't protect you, there are consumer protection laws in place.
But how many people know about that? And how many (chuckles) people know that they have a lot of rights? Even if they walked into a contract and signed a contract that isn't super great. But how much will it cost? Well, now you have to hire a lawyer and deal with all that.
[Laughter]
And by the way, I think damages are triple for that. So, if you do have a case and they do have to pay you triple, obviously, how much will it cost? Well, now there you go.
But the point is that we don't ever, ever, ever want to get to the point where we're talking about consumer protection law and we need to hire an attorney to go after someone (laughs). We want to be well out in front of all that.
So, the one thing that I really wish people (after 27 years in the industry) would just take in and understand and take to heart, is that it's so easy to just believe what you want to hear. Someone's telling you what you want to hear, and you go with it.
You need to listen to the person who's telling you the truth, even if it's not what you want to hear. And I know that's no fun, I'm often the bearer of bad news, like, “This project is going to be more expensive, it's going to be more complicated.”
But that matters so much to not just believe the one guy who's like, “Oh, yeah, I can do this for half of what everybody else told you, you can do it for.”
Sheri Scott (45:15):
Exactly. You're going to pay for it.
Marilyn Moedinger (45:17):
You're going to pay for it. That's my one thing (laughs).
Sheri Scott (45:22):
Yeah, that would be lovely (laughs).
Marilyn Moedinger (45:26):
So, we thought we were going to get into more questions, but we just dove deep into those three. So, that feels like enough for now (laughs).
Sheri Scott (45:31):
There's a lot to talk about in those three. There was a lot.
Marilyn Moedinger (45:34):
We were like the fire hose, fire-hose style.
Sheri Scott (45:36):
Well, a lot of it was, how do you start out? How do you start out strong? And it hits all of our hot buttons (laughs) to say start strong. Take your time, figure it out, listen to people that tell you the truth. Ask all of the questions, all of it before you really get into it.
And somebody said “before I get emotionally invested.” It's exciting. It’s exciting to start a project like this. And of course, I want to jump right in and start designing this super cool house that somebody wants.
But we got to figure out if it's realistic and if they can afford it and if they have the right site and all of those things we talked about today.
Marilyn Moedinger (46:16):
That's right. And we're often saying that to bring in your architect earlier than you think because we can be helpful very early in the process, even when you're just thinking about the project.
You're thinking like, “Should I get a lot? Should I build new? Should I stay and renovate?” We've talked about that before as explicit questions. But I think here, this is getting back to the idea of it's never too early to talk to a professional to help you figure out what the right moves are.
And in our opinion, the best professional to do that is the architect because they have the overarching understanding of what's going on and what all the players and their roles and how that can play out for a homeowner.
I think the other thing here is that this can be really overwhelming. And I think that causes a lot of people to just never start or to feel like they're really lost and they're just not sure. We are used to that, it's okay, whatever question you have.
I've heard people, we've heard it on the podcast where people say, “I really wish I would have asked X, Y, Z. I wish I would have stood up for myself.”
Sheri Scott (47:26):
Spoken up earlier.
Marilyn Moedinger (47:27):
It is your house. You are allowed to ask all of the questions. It's probably the most expensive thing, the biggest contract that you're going to sign. It's a huge deal. For example, get an attorney to look over the contract you signed with the contractor. I can't believe how many people don't do that.
Sheri Scott (47:49):
Same. Absolutely. And it's a long contract, and it has a lot of things in there. And then you don't even question it until something goes wrong. And then you look it up and think, “I can't believe I signed that right away.”
Marilyn Moedinger (48:02):
Before you get emotionally invested, it's okay to take stock, take a moment. It's overwhelming for everyone, even people who've done it a couple of times or built a couple of homes or something like that, and we're here to help.
And in the meantime, if you don't hire me or Sheri, if you're not working in our areas. You can listen to our podcast.
Sheri Scott (48:21):
That’s right. We’ll take you through it.
[Laughter]
Marilyn Moedinger (48:22):
These are the things we're talking about all the time (laughs).
Sheri Scott (48:23):
And send us your questions. If this sparked something for you that you're like, “Oh, yeah, but they didn't touch on this,” let us know. Let us know what your questions are. Chances are we have been through it; we've answered it before. And we'll dive right into it here.
Marilyn Moedinger (48:41):
Yeah, and also, I would underline it's okay to ask us questions multiple times, too. So, if you've heard a question asked on here, you're like, “Oh, but I wonder about this specific situation.” We're happy to do that, too. So, it's helpful to think about all the various scenarios. So, bring it on.
Sheri Scott (48:59):
Very good.
Marilyn Moedinger (49:00):
Thanks for joining us today on Home: The Second Story for a mailbag episode. If you have questions for us or topics you'd like to cover, as we just went through there, or if you're interested in being a guest for one of our interview episodes, just reach out to us at admin@htsspodcast.com. And don't forget to follow us on Instagram. We'll see you next time.
[Music playing]
Voiceover (49:20):
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