In our third mailbag episode, we answer three listener questions about hiring a builder, comparing bids, and knowing when plans are detailed enough for pricing. The first question asks what homeowners should ask builders beyond cost and schedule. We explain that homeowners need drawings before they interview builders, even if those drawings are preliminary. A builder cannot give meaningful feedback without seeing the scope. The interview should feel like a conversation, not a questionnaire. Good questions reveal how many projects the builder runs at once, who manages the site, how they communicate, and how they handle problems. Just as important, homeowners should pay attention to the fit. If the communication feels off early, it usually does not improve later. Red flags include avoiding contracts, skipping permits, being disrespectful, or keeping messy job sites. References matter too, but they should be checked by phone. The most important reference question is whether that past client would hire the builder again.
The second question focuses on comparing bids that are hard to read side by side. We explain that pricing is only as reliable as the information given to the builder. A napkin sketch leads to a napkin sketch level of accuracy. Once bids come in, homeowners need to know whether the proposals include the same scope. A single lump sum is not enough. The best approach is to normalize the bids in a spreadsheet so each line item can be compared. That process often shows that the lowest number is not always the best value. One builder may have left out site work, permit fees, landscaping, management, allowances, or general conditions. Homeowners also need to understand where overhead and profit are shown. Some builders break it out at the end, while others spread it through each category. Allowances need close attention because a tile allowance, for example, may or may not include labor. Builders should be willing to answer reasonable questions without getting defensive.
The third question asks how complete plans should be before pricing. We explain that the more detailed the drawings and selections are, the more accurate the pricing will be. Early pricing can help guide decisions, but it comes with wide ranges. More complete drawings narrow those ranges, but that takes time and money. For renovations, it can help to put everything into the “shopping cart” first, price the full scope, and then remove items with better information. For new homes, pricing may be easier to estimate early because the scope is clearer. The main point is that homeowners need to know themselves. Some people are comfortable moving forward with broad numbers. Others need more detail before they can make decisions. A good architect should help match the process to the client, the budget, the risk level, and the long term goals for the home.
(00:00) Welcome to the mailbag episode
(00:15) Question 1: What to ask builders before hiring
(03:08) Why you need drawings before builder interviews
(07:06) Looking beyond cost when choosing a builder
(14:42) Checking references and asking the right questions
(17:57) Question 2: How to compare bids
(23:42) Normalizing bids for an apples to apples comparison
(34:42) Question 3: How complete plans should be before pricing
(37:54) Pricing the full “shopping cart” before cutting scope
(52:45) Final advice on asking questions and trusting the process
054_2026_06_30_Mailbag 3_Video
Speakers: Sheri Scott & Marilyn Moedinger
Marilyn Moedinger (00:00):
Hi everyone, and welcome to a mailbag episode of Home: The Second Story. I'm Marilyn Moedinger from Runcible Studios in Lancaster, Pennsylvania and Boston, Massachusetts.
Sheri Scott (00:10):
And I am Sheri Scott with Springhouse Architects in Cincinnati, Ohio.
Marilyn Moedinger (00:15):
Alright, well, let's get started. So, we've been doing these mailbag episodes (they're super fun), where we read these questions that people have for us and answer them. So, we're just going to dive right in. First question:
"We're getting close to interviewing builders for a large renovation, and I want to ask better questions than just how much will it cost, and how long will it take? What should we really be asking to understand about how they work, communicate, price and handle problems?"
Sheri Scott (00:47):
Well, that's a pretty good list that they ended with, right?
Marilyn Moedinger (00:51):
Yeah.
Sheri Scott (00:51):
Asking all of those things, but we can be a little more detailed. I think we've talked about this a couple of times, but being very specific, I think, is good. And one question is: Where do you find them first? And our clients kind of run the gambit.
Some of them come in with contractors that they know or they've worked with before. Some come in with friends that have recommended them, and some come in and say, "I don't know anybody. Can you help me?"
So, we kind of start from there and ask our clients who they know, if they have someone in mind. Hopefully, they haven't gotten in bed with somebody already before we've even started the design, but sometimes, that happens too. How do you usually start?
Marilyn Moedinger (01:39):
I mean, it sounds very similar. So, some folks come to us and say, "We have a builder we've worked with before or that comes very highly recommended." Most people in the markets that I work in want to see multiple bids.
So, even if they're really excited about one particular builder, they will still want to see multiple. They will want to hear from multiple people. I know that can be controversial. I know in other markets or with other architects or some builders say, "I don't bid."
And putting on (in my previous life) my builder hat, to that I say, "Well, I get that. No one's trying to run you around and make you bid a bunch of stuff, but I only bring people in if it's a serious inquiry. And plus, this is someone who's about to spend a lot of money. I think it's okay to interview people and not just go with the first one.
Sheri Scott (02:34):
And I think interviewing is a lot different than bidding.
Marilyn Moedinger (02:38):
True.
Sheri Scott (02:39):
Interviewing, asking ballpark pricing, those kinds of things, I kind of feel like that's all in a nutshell. And then bidding is kind of a different animal because in my area, we really don't have the opportunity to do a full completed set bid, and have three different people. That's the traditional – three different contractors bid on a totally complete set all selections made.
Marilyn Moedinger (03:08):
Oh, we don't do that either. Maybe we should back up and explain when this happens in the process.
So, the person says in their question, “We're getting close to interviewing builders,” okay, great. So, when you go to interview a builder, once you figured out who you want to work with, and we can kind of talk about how you might find those – three is the magic number of people to interview. Four is too many, two is not enough. What you should go into that with, you need to have some drawings of some kind.
You cannot interview builders without-
Sheri Scott (03:39):
100%-
Marilyn Moedinger (03:40):
Something on paper (chuckles).
Sheri Scott (03:41):
Thank you for saying that, yes.
Marilyn Moedinger (03:43):
So, what we do, and it works pretty well, is we do what's called a bid set. So, it's not enough information to go to get a permit. It's certainly not enough to build from, but it basically tells the builder, here's basically what we're thinking about. And then we put together a five-page single spaced outline specification that says by division.
So, here's what we anticipate in site work, demo, framing, concrete, masonry, electrical, mechanical, plumbing. We go down the line, and then we give them allowances to hold and that kind of thing. The point is that that happens very early in the process. So, when you go to interview a builder, you need to have something.
So, our clients will have that in their hands to talk to the builders, and then the question is not just what is this going to cost (although that's one of the questions), but when you have that set of drawings that's not completed yet, one of the best questions to use to ask while you have that set of drawings while you're meeting with the contractor is, "What do you think about our approach? We're trying to figure out how to integrate HVAC in this complicated renovation. What are some approaches you've used in the past in a similar project?"
Things like that. So, you can use the sort of outline set of drawings as a way to open up conversations and see, do they seem collaborative? Do they seem like they're interested in talking with you? Do they listen to what you're saying? Are they responding with respect? Do they listen to what the architect has to say? And all that kind of stuff. So, going into that conversation with the builder, you need drawings of some kind.
Sheri Scott (05:28):
Yeah, we do it a little bit differently. We do what we call preliminary design. We do preliminary design and then we meet with builders. So, it's very preliminary. We have something on paper, it's the beginning kind of hopes and dreams of a project. And then we sit with three builders, and we talk about all those same things.
We do not talk about price at that point. We talk about: ask the typical, what's your per square foot price? Which is a valid question, it is not a concrete answer. You ask that question just to get the conversation started and to talk about something that is not something you can bank on.
Then after that meeting, we may rule one out, we may love all three of them. It's just an introductory meeting with something on paper. Then we go back and we continue on our process till we get to what we call a pricing set, which sounds like is the same of what you were talking about.
So, our pricing set is not construction documents, but we have window schedules and all of the dimensions, and we've shown the basement and foundation, and all of the things that are big ticket items that they can get some preliminary pricing on. And from that, we reengage the builders, the ones that we liked. Maybe we bring a new one in if we ruled a couple out, and that's kind of where we start the real questioning.
Marilyn Moedinger (07:06):
Getting back to the person's question here, people tend to only want to make the decision based on cost or have that be one of the major drivers. And what I like about this person's question and the process that both of us are describing is that there's more to it. So, how do we get to some of those things?
So, I mentioned a couple things a minute ago, but I mean, they're asking, what should we be asking to understand how they work?
Sheri Scott (07:29):
One question I like to ask right away is how many active projects do you have going at a time?
Marilyn Moedinger (07:35):
There you go.
Sheri Scott (07:36):
Because then that opens up the conversation about who do you have on site? We've had contractors that say, "I do one project every two years because I sit in my truck and run the whole thing from there, and I do everything." There are others that have 12 going at a time.
It's not right or wrong. And it may be different on what kind of personality you want on your site, but the 12-project guy could run it even better than the one project person (not necessarily guy). You just have to know then their process like, "My goodness, how can you handle 12 projects?"
And then you start listening and asking questions. And what I do want to stress a lot is that it's a conversation. It's not like, "I'm going to email you these questions and you ChatGPT it and send it back to me." You really want to sit across from a table. You're going to be living with these people for a long time, and you want to make it personal.
Marilyn Moedinger (08:41):
Yeah, I agree. And this is where I will say what I think potentially the number one thing that you're trying to do in an interview with a builder is pick up on the vibes, for lack of better word (chuckles). I mean, not to be cheesy about it, but you're trying to understand the vibe.
If the communication is off, if you sort of don't feel a flow with them – they could check all the boxes of being the most perfect builder, but if you don't have that rapport with them or you don't feel like you're being heard, or you're feeling like you're sort of missing each other on the communication, that's telling, and it's not going to sort of get better.
I mean, you'll get to know people better, and so that part gets better over time, but you shouldn't start off with someone that you have bad vibes about. And I also want to say that there are answers that people can give in interviews that are red flags, as in these are bad things. There are also things that people can say that are not bad or good. They're just not right for you as the homeowner.
And that's fine. I mean, there are certain things that if a builder says, then I'm like, "Okay, so that's illegal, or that's unethical or whatever." I mean, at this point in my career, I'm not really running into that, but certainly that does come up, and that's where having your architect at that meeting is really important because then the architect can say, "Hey, what they were describing actually doesn't really work with how the law …"
Sheri Scott (10:14):
Doesn't sound right.
Marilyn Moedinger (10:16):
(Laughs) So, I think that's important is to have that second vibes, and also remember that just because it's wrong for you doesn't mean that it's wrong outright, but there are some things that are wrong. If a builder says, "I don't really like contracts, I just like to shake hands." We will not recommend working with them. I mean, that's an extreme example.
Sheri Scott (10:39):
It is, yeah.
Marilyn Moedinger (10:40):
But it happens. I can’t tell you how many people I've heard over the years who are like, "Well, we just didn't really write a contract because we felt like we understood everything."
Sheri Scott (10:48):
Another one is like, "No, in this area, we probably don't need to get a building permit. We can just build it." Like, no. That’s not going to work.
Marilyn Moedinger (11:02):
Othe red flags for me that are instant no: being sexist.
Sheri Scott (11:06):
Oh, well, yes.
Marilyn Moedinger (11:08):
Because to me, I'm like, "Well, what are you saying about everyone? Why would I want that on my project?" So, that kind of stuff where they're talking down to one member of the couple or they're talking down to me or whatever. I had a situation where it was a subcontractor making sexist jokes to me, and I was like, "Do you see who you're talking to? I'm not going to laugh about this."
[Laughter]
Sheri Scott (11:33):
Yeah, am I supposed to just go along here? I'm not sure.
Marilyn Moedinger (11:36):
Yeah, what? He's like, "Well, you know how women are." And I was like, "What?!" (Laughs).
Sheri Scott (11:42):
Actually, I do and I pretty much, I like it.
[Laughter]
Marilyn Moedinger (11:44):
So, anyway, I mean we're being lighthearted about some things that can be problematic like that. So, that would be a big red flag too. You don't need that.
Sheri Scott (11:56):
Another red flag, well, one of the things that you should do is ask to visit active job sites, and a red flag there would be if it's a mess. And I don't know, I've heard every excuse in the book, but seriously, if there are coffee cups and Gatorade bottles just laying around, yeah, it's just a sub for one day that did that and lumber piles all disheveled, things like that – that's indicative of them not having control of their subs.
Marilyn Moedinger (12:30):
I think any good builder who would be sitting here listening to all these things would agree 100%. No, we don't do any of those things. Like we would never do any of those things. So, I think sometimes, the building industry can have a bad name because there's a lot of people who don't do as great of a job, but there are plenty of people who take a lot of pride in their work and do really great work. And I think that the interview process is about finding that out.
Sheri Scott (12:59):
And finding those people.
Marilyn Moedinger (13:01):
That's right. I interviewed a sub the other day for a project, and this is one actually for a personal project, it's a really, really big project. Hopefully, more to come that I'll reveal in the future here, but so it's a really big chunk of work for the sub.
And we did a whole walkthrough, figured everything out, talked through everything. And as we're sort of saying goodbye, he just turned to me and he said, "I would love to do this project for you and your family."
And I was like, "Wow, thank you. Yeah, awesome." And he's like, "No, I'm serious." He's like, "Me and my guys, this is the exact kind of work we love. This is the work we love to do. I'm excited to tell my guys about this one."
And it is a unique project and they're a unique sub. This isn't a run of the mill moment. But for him to say that just made me think, "Well, yeah, I want you here too if you want to be here that badly, that you're excited to be here."
Sheri Scott (14:01):
I think one of our interviews we did recently- mentioned that when they were interviewing builders, he was like, really at the table, it didn't feel like they wanted the job. And sure enough, a week later, they wrote a note that said, "We're not a good fit."
So, paying attention to those, and it does make a difference if someone wants your job, and if they have time for it; ask about their timeline and how backed up they are. And if you're in a hurry and they don't have time, then conversation over. Or if you like them so much, you're willing to wait for them, but you want someone that's going to be honest with you about their timeline because that is very frustrating.
Marilyn Moedinger (14:42):
One other thing that people always agree about, but then seldom follow through, is checking references. So, I encourage people to get references from builders. We already know that the builders are going to send hopefully good references, but you want to call the references. This is my little secret info here.
Call them because you can hear a lot in someone's tone of voice that they may not feel comfortable saying directly in email. So, if you say, "Would you work with this builder again," which is the most important question that you can ask: "Would you work with them again?" And if they're like, "Well, yeah…" you're like, "Ah, there's something there." And that's not something that you can get out of email.
So, call references and ask them those questions. And I think that's the most important question to ask is, would you work with them again knowing what you know now?
Sheri Scott (15:38):
The other thing to ask them is we have said here a million times: there's no perfect project. Don't ask them what went wrong, ask them how they dealt with something that happened, something that you didn't expect or something that was a mix up. It doesn't have to be a devastating thing or a bad story, just ask them how they dealt with it. How did they communicate that to you? Who paid for it? All of those, just get the story.
Marilyn Moedinger (16:07):
Another question I like to ask in an interview for a builder is, "What do you love about your work?"
Sheri Scott (16:15):
Oh, that's a good one. I've not asked that.
Marilyn Moedinger (16:18):
And you'll hear all kinds of things. I've heard builders say things like, "You know what, I love managing things. I just really love having all the pieces flow together and I'm moving this guy over here and this guy over here and everything's flowing together in the schedule and the timeline and the whatever." And you're like, "Yes, that is someone you want managing your project."
And so, some of the things are sneaky good answers and sneaky bad answers. So, a sneaky good answer is I love finished carpentry so much. I was a finished carpenter my whole life. I'm so obsessed with the details around the carpentry and the trim and the whatever. That's a great answer, but that may not be the right answer you need to hear from your general contractor builder.
They need to be a manager; they are not a trim carpenter. Now that said, if they are a really good manager with a trim carpentry background, that's amazing, but that shouldn't be the first thing.
Sheri Scott (17:13):
Right, that's a good distinction. No, I think that's good because now you'll know where their time is going to go. They're going to be head down into trim and not necessarily arranging all of the moving parts.
Marilyn Moedinger (17:29):
Exactly, yeah.
Sheri Scott (17:31):
It should be a good hour meeting when you meet with a builder. So, there are just so many things to talk about, and if you can go in maybe with three high level questions like how they work, how they communicate, how they deal with problems, those kind of high level things, and then start talking about things and ask them for examples of how they've done those things.
Marilyn Moedinger (17:56):
I think that's right.
Sheri Scott (17:57):
Now, we're onto question two: how do we compare bids? So, this follows right in line with what do we ask before hiring a builder. Now, at this point you have met builders, you like them, and you've received some form of bids, and we already kind of talked about at what point do you get pricing sets out and things like that? And we can continue on, but let me read the question from this person:
"We got three proposals for our renovation, and they are all over the place. One is much lower, one is more detailed, and one seems to include things the others do not. It's hard to tell whether one is truly a better value or if we're comparing apples to oranges. How should homeowners evaluate bids in a way that's actually smart?”
So, it's a good question. It's a huge question because we don't really know at what point this person is receiving what they're calling bids. Are they full bids? Are they ballpark pricing? What information did you give them?
So, I think one of the things that maybe we step back and talk about, which we touched on with the last question, is at what different points do people talk about price with builders- and in what form do those bids come in at?
Marilyn Moedinger (19:21):
Yeah, I think that would be good because I want to underline what you said about, we can't answer the question necessarily without knowing what type of information they were given. So, when I used to literally be a construction estimator back in my day, we used to say garbage in, garbage out.
If I get garbage, if I get a napkin sketch, then you're going to get a napkin sketch worth of accuracy on the price that comes back. And that's not because anyone's trying to be bad or something. It's just because that's the information that is there. You can't do much better than that.
So, I think that that's the first thing for me, is to say, you can get bids, you can get pricing at any time in a project. You just have to understand that what you're going to get in terms of accuracy is directly proportional to what you give them.
So, if you're meeting with people at the very beginning, like you were mentioning earlier, Sheri, about in that first interview when you say, "What are some square foot pricing for similar houses that you're seeing?" And they say, "Between 400 and 600 a foot."
Well, that's a pretty wide range, but it's not 200 and it's not 800. So, that gives you a sense. I call that the parking lot of the ballpark. We're not even in the ballpark yet, but we're in the parking lot (laughs).
Sheri Scott (20:42):
We can talk about something.
Marilyn Moedinger (20:43):
And I think that's completely appropriate for that level. Then it's just you can get pricing as many times as you want. You just have to understand that the architect has to stop designing and make ... think of it like baking a cake. This is what I always say, you can take the cake out of the oven only one time. So, if you take it out before it's cooked, then no one's going to be able to judge it.
So, if you take the drawings out before they're cooked, no one's going to be able to understand what's going on. It's not cooked yet. So, you do have to cook the drawings enough that it gives you real information. And in order to do that requires a process that you can't stop in the middle of. So, you can't just say, "I want to price it every week." You can't do that.
Sheri Scott (21:34):
Well, and it's critical when you do start the pricing because in my experience as an architect, as a builder, and now doing more development work, when you get the first price, when they're actually pricing something and putting numbers to a line item to back it up, it just feels like … and I am not a builder now, and I am not in charge of any of those pieces, but as a consumer and as an architect, it feels like it never goes down.
You can always add, they're like, "Oh no, that costs more." But then when you change something that's like, "Well, I brought the square footage down." Well, that doesn't really take that much money out. Or, "Okay, I simplified the stair." "Well, yeah, but you still have blah, blah, blah, blah, blah."
So, what I'm trying to say is it's critical the timing, and it's critical how far baked your drawings are in that very first pass. That has to be measured and you have to do it on purpose. You can't just throw something out there and start the pricing package.
Marilyn Moedinger (22:55):
Looking ahead to our question number three, is asking that question. So, I want to be sure that we save something for that to talk about how complete. So, if we're talking about comparing them, let's say we've got them in our hands and now we're comparing them, how do you make sure it's apples to apples and not apples to oranges, or apples to elephants.
That at least, that there's some sort of ... I think homeowners evaluating estimates is very dicey because unless they're professionals who've looked at thousands of estimates, they're not going to really understand how to read them.
Sheri Scott (23:36):
And that's a service of ours, that's a whole entire phase-
Marilyn Moedinger (23:39):
That's right. That's right.
Sheri Scott (23:40):
... that we have, yeah.
Marilyn Moedinger (23:42):
I think some of the ways that are important, if the estimate is a single number and it just says, "This project's going to cost $500,000." That's it. Then that is completely unhelpful and you're not going to be able to compare that to anything. You have no idea what's driving that.
So, the way that we compare it and we offer the service to all of our clients is we create a bid normalization spreadsheet. So, we go in, take all the bids, break them down, and compare all the different line items, understanding that part of this scope was in that line item, part of the scope was in that line item, we normalize it.
That does sometimes mean that the guy who said it was $500,000 versus the guy who said it was $600,000 versus the guy who said it was $900,000, the 900 guy may be actually the most accurate because they included the most stuff, but you don't really know that until you go through and do that bid normalization.
That seems like something that would be really easy to do, but no builder from the beginning of time ever put their estimate in the same format as another builder.
Sheri Scott (24:53):
That's right. Or call the same-
Marilyn Moedinger (24:57):
Or they're not called the same thing. So, when we go through that, I have a lot of communication with the builders saying, "Hey, I'm trying to compare (these) apples to apples. Did you include install the windows under windows or install the windows under framing?"
And if they're like, "Oh, it's under windows. "I'm like, "Well, that's why your window estimate is 20% higher than everybody else's. "And the builders are generally quite glad to hear that we're doing that because then they don't want to miss anything. They don't want their bids compared- not apples to apples."
So, that's what we do, is we create a spreadsheet. You can't do that if you're a layperson. If you don't have a ton of experience – I mean, you can, but you're not really going to know what you're looking at. So, that's why we offer that as a service.
Sheri Scott (25:43):
Getting it apples to apples for sure- included in that is the scope. So, what all is included? Is it a turnkey project? This is every single dollar you're going to pay until you drive up the driveway and move in? Is landscaping included? Is site prep included? Are they going from a building pad? A lot of that is in site work. What about permit fees? Where is every single dollar?
And it doesn't have to be on their side, but you as the homeowner, as the client, you need to know what column it's going to go in because if that's going to be left up to you later, that still needs to be added into your project price.
Marilyn Moedinger (26:31):
Absolutely. And along with that is the question, how are they distributing or how are they accounting for overhead and profit? So, for some builders, they will price each line item and then at the end, there's a single line item that says OH&P (overhead and profit), 15%, and it's a dollar amount. So, that's one way.
But that means that every line item previous to that will be lower than a guy who spread their overhead and profit on each category, and they included that 15% in those areas.
Sheri Scott (27:01):
That's right.
Marilyn Moedinger (27:03):
And if you're not aware of that, you're going to be like, " Why is this guy always 15% higher? "Well, forget that guy." You're like, "No, no, no. He just included it in a different place." And there's various pros and cons to breaking it out or whatever. Some people see that big overhead and profit number and they kind of freak out and they're like, "Ah, but the other guy just spread it through the whole thing."
So, it's still there or it should be. But one thing is that (and this is a deep cut from me being an estimator) overhead and profit should not be on top of their own labor. So, if they are self-performing things, you don't get to double dip. You don't get to say, "My carpenter is being billed to you for $75 an hour, and I'm putting 15% on top of that."
No, no, no, no, that should already be included because that guy is already burdened labor. He gets paid $30 an hour; he's costing the builder $40. The builder's charging you $75 to cover their overhead and profit (chuckles).
Sheri Scott (28:08):
Sure.
Marilyn Moedinger (28:09):
So that's one thing I always look for, is are you double dipping on charging on your self-perform work because that can make a big difference.
Sheri Scott (28:19):
Another thing is comparing allowances. So, they probably in your first pass, even at your last pass, you're going to have allowances. You should know what those allowances account for, and have some kind of understanding of what that is going to cover. That may include making specifications and finding out if things you specify are covered in the allowances, or literally going shopping.
If you have an appliance allowance, it's easy to go to the appliance place and find out if that's reasonable of what you like. You see something and you work with the people there. I'm saying if your architect or your builder's not taking you through, just go yourself and find out if that allowance makes sense. You need to know if that makes sense for what you want to be spending.
Marilyn Moedinger (29:19):
And what does that allowance include? So, for example, is that literally your shopping budget or is it ... so, for tile, for example, let's say they put in an allowance for $10,000 for tile. Is that material? Is that material and labor? Because if it's material and labor, you have a lot less than $5,000 to go shopping with, or $10,000. What did I say? I don’t remember.
Sheri Scott (29:39):
10 (thousand), yeah. So, you probably have five.
[Laughter]
Marilyn Moedinger (29:43):
You have $5,000 to shop with, not 10 (thousand). That's why we as architects give the builders the allowances so they're all apples to apples.
Sheri Scott (29:52):
We're kind of 50/50 on that. Sometimes we do and sometimes we let them do it because honestly, sometimes, the allowances that the builder will assign will tell you a lot.
Marilyn Moedinger (30:04):
It's a data point.
Sheri Scott (30:05):
What level they're expecting these things to be, and how they're reading your client. Do they understand the assignment?
Marilyn Moedinger (30:14):
Yep. The other thing to look at when comparing bids is the management. So, how are they accounting for their management? So, do they have a site super? Do they have a project manager? Do they have project admin? Do they have these various different things?
I sometimes struggle when they put project admin on there because I'm like, "Well, what's your overhead and profit number covering then? Come on." So, side note, as architects, if we charge 15% of the cost of construction for our fee, that is covering our overhead and profit and our cost. The builder gets to charge 15% just as their overhead and profit.
So, I like to see more things pushed into that overhead number. It's not a pure profit. So, there's all sorts of things like that. Also, in the first category known as “general conditions,” there's a lot of things in there that either people forget – things like temporary toilet, temporary power, erosion control, or site protection or all these kinds of things that in the end, can add up.
One category I always look for is incidental tools. I do not want to see a giant budget on my client's project for incidental tools. I'm like, "Well, do we get to keep those tools at the end then?" (Chuckles).
So, we are not paying $50,000 to buy a lift that the builder takes with them. It should be a reasonable rental cost or something like that.
Marilyn Moedinger (31:47):
Absolutely. And it's okay to have an incidental tools budget because there are things that come up. But again, I like to see that stuff push more into the overhead. What is overhead if it's not some of those things? So, I know some of that might be slightly controversial, but-
Sheri Scott (32:05):
And as we always say, builders have hard jobs.
Marilyn Moedinger (32:08):
It's a really hard job.
Sheri Scott (32:09):
But if we're advocates for our clients, we're going to at least ask those questions and see if they have an answer, see if they understand their bid. That's the other thing, is do they understand what they put on that paper and what that actually means? Because they need to stand by it. At some point, it's going to get locked in as a contract price and they need to be able to stand by that and understand it.
Marilyn Moedinger (32:34):
That's right. And I'd rather see someone being more conservative on a bid and saying, I don't know what the framing ... I mean, this person was saying it's a renovation. And so, a renovation bid is really different than a new construction bid because-
Sheri Scott (32:48):
Different animal, for sure.
Marilyn Moedinger (32:50):
You don't know what's behind the walls. And I'd much rather have someone say, "You know what, the framing for this, if everything goes perfectly is $10,000, but I put $15,000 here because I saw that that floor was crooked, and my instinct tells me that we're going to have to do X and Y."
I'd much rather have someone tell me that and be upfront. Now, not go overboard with that, but be upfront about it, and be a little bit more conservative so that people don't get caught later.
Sheri Scott (33:17):
Yeah.
Marilyn Moedinger (33:18):
So, I guess in conclusion, how should homeowners evaluate bids? I mean, obviously our first response is have an expert with you to help you.
Sheri Scott (33:25):
Have an expert with you to make a spreadsheet (laughs). It’s the unglamorous answer.
Marilyn Moedinger (33:30):
Yeah, that's the unglamorous answer. But I think this person is onto the right track here, which is they're all different, so there must be some reasons why, and they should dig in. And I'll say this as my sort of last thought on this, that if a builder's being really defensive about their quote, that's not a good sign.
I mean, you don't want to be a pain. Do not be a pain to your builder and ask how many boxes of screws and do I get to keep half the box if you don't use the whole thing? Do not do that to the builders. That's ridiculous and annoying.
But at the same time, also, you are allowed to ask questions about literally the most expensive thing that you probably have ever done. You are allowed to ask questions and ask for clarity, and they should be able to provide that for you in a way that's professional and not judgmental or whatever.
Sheri Scott (34:23):
Agreed. Because hopefully, when you get to this point, it's not the first time you've talked about most of these things.
Marilyn Moedinger (34:28):
Yeah, that's right.
Sheri Scott (34:28):
Hopefully, you have worked together long enough. We're not throwing a complete set of plans at a builder and saying, "Here, price this out of the blue. You don't know these people, you haven't had conversations." Hopefully, you've talked about a lot of it already.
Marilyn Moedinger (34:42):
Yep, that's the ideal. Let's dive into question three, which admittedly we have talked a little bit about already, but that's okay. I think we're going to have more to talk about here. Basically, how complete should plans be before pricing? This person asks:
"We are eager to get numbers and make decisions, but our architect is encouraging us to develop the plans further before pricing. At the same time, I don't want to spend a lot on drawings only to discover that we're over budget. How detailed should the plans and selections be before asking builders to price the project?"
Good question.
Sheri Scott (35:18):
That's a really good question and something that we deal with every day. Just this week, we are working on a renovation for an existing house, and they're kind of deciding if they're going to do a big renovation, adding a garage and dining room and extending front porch, all of that, or are they going to do something a little bit less?
And we're in the very beginning stages, just high-level planning and trying to figure out if the municipality is going to allow it, allow the variants that we're going to have to ask for. And the client emailed me early this week and said, "Hey, can we get some kind of price and timeline for each of these options that you've proposed?"
Because they don't want to keep making revisions and going down a long path if they don't have some kind of idea of price. And so, as an architect, we can give them kind of historical pricing, things that we've seen. We try to go through as a square footage price just to give them some kind of idea, like this is the swing you're looking at from option A, option B, option C.
And the timelines, I mean, we're dealing in months. This option's going to take three months for architectural and six months for building. I have no idea when those six months for building would start because we don't know the contractor, we don't know when they're going to be able to start, we don't know when permitting is going to happen.
So, they're huge, huge swings, huge guesses, but at least it's something that the client can start making some decisions doing. And so, the question is, how far do we finish the drawings and how much do I have to invest before I have any kind of answer?
And unfortunately, it is the more time your architect spends and the more specific your drawings get, the narrower all of those answers are going to get more-
Marilyn Moedinger (37:37):
The more accurate, yeah.
Sheri Scott (37:38):
More and more defined, as it goes on and it costs money. I guess that's my long-winded example to say the less money you're spending, the broader your answers are going to be, but you should be able to get answers very early.
Marilyn Moedinger (37:54):
I mean, that's pretty much what I would say too from my end and the way we do things. I mean, we often are pricing multiple options. We do a lot of renovation work that's really complex. So, what we often will do is (and what I advise clients) to put everything into the shopping cart. Let us put everything into the set of drawings, this initial preliminary set, let us put it all in there.
It will be broken out in a way that then we can say, now we know the cost of everything in the shopping cart. Now, when we take something out of the shopping cart, we're taking it out with much more knowledge. We're saying, "Oh wow, yeah, we had added onto this project to … as part of the project we had to redo the deck." Well, now we're finding out that the deck redoing it is going to be 30 grand.
And the owner says, "Well, it's probably not worth it to us. We can do that later. Let's save that for later." But now, we have the information. And that's how I try to explain it to homeowners where you can't design to a very tight budget on day one. There's too many factors if you want to price all these different things.
The other art here that maybe this question is getting at a little bit, is, there's an art to not being annoying to contractors in doing this pricing exercise. So, in my experience, homeowners are fine in concept with a ballpark price. We just want a ballpark, we just want to know, and they get the ballpark price, and then they respond by saying, "Well, what if we move the window six inches this way, and what if we do a 12-foot run of cabinets instead of a 15-foot run?"
And you're like, "Those aren't ballpark questions." We're not dialing this thing down to half a percent of accuracy yet. So, that's what we always say, is like, "Okay, put everything in the shopping cart, put everything in the drawings, put everything in the outline spec and get it priced. It's going to be maybe twice as much as you want to spend. Don't freak out. No one has spent the money yet. We now have information that we can take things out of the cart to get down to your budget."
And what happens in 99 cases out of a hundred in my experience, is people end up leaving more things in the cart and increasing their budget because they see the value and they say, "You know what, it does make sense to refinish the floors right now because if we don't, we will move in and a year later, we're going to move out again to refinish the floors." That's crazy.
So, yes, it does make sense to add that now, even though that wasn't part of the original budget. I hope that makes sense (chuckles).
Sheri Scott (40:50):
It does make sense, and I do think it's a different animal when you're talking about renovation versus new build. So, when we do new build, we have a much better focus or understanding of what the costs are going to be, and there still are ranges. There’s still custom homes to luxury custom homes, to the sky's the limit kind of thing.
But we have a good sense as an architect that does this every single day, we have a pretty good sense and we can guide you a little bit more than renovation work where I think you have to start more with the cart, like how many things do you want in, how many things are you going to take out? When you're doing a new build, you're going to do the floors.
Marilyn Moedinger (41:40):
You’re going to do the whole thing. Everything's in the cart (laughs).
Sheri Scott (41:42):
You got to do it all, but we have different levers for new builds. And I think we already talked about this on this episode when we get our first price. So, first of all, when we have our very first conversation and I understand what the clients are looking for, I can give them some kind of per square foot price of what we typically see.
And I almost always say, it doesn't have to be that. I'm just telling you what our range – if you've looked at our portfolio and that's why you're in here talking to us – this is what the range of our projects typically are. Can we be lower than that? Probably, but it depends. Can we be higher than that? Of course, please (laughs).
Marilyn Moedinger (42:31):
Always can. You always can go higher.
Sheri Scott (42:35):
So, that's where we start. So, that's with zero drawings. Then we get to preliminary design, and we can also then give you a better kind of per square foot price based on our experience. Then once we get to pricing sets, that's when we can get ballpark pricing from a contractor.
And yes, each of those things, the very first consultation, costs you nothing. Getting through preliminary design, that's a cost. Getting to pricing set, that's the next step. So, at each step, we give you the opportunity to say, "Whoa, wait a minute, this is not where we thought we were going to be."
Marilyn Moedinger (43:15):
I think along with that, something that's very important for homeowners to understand, is they are a vital part of that process. If they are not being honest with their team about their budget, then they can't expect their team to read their minds.
So, how complete should the plans be is a little bit like, "Well, how accurate do you need pricing numbers to be to feel comfortable to proceed with the project?" So, I've had some owners who are like, "I'm fine. We don't need to bid it a bunch of times. Yep, we're in the ballpark. I'm good with that."
Then we have other owners who are much, much more interested in the nitty gritty and all the little details and every little thing. Well, those two different processes will cost you different amounts of money. And when people are really interested in the nitty gritty, I explain in order to get that detailed, this will cost you more money.
So, there's a tipping point between if it's costing you more money than you're saving, then you need to realize that. And I think what I'm about to say applies to so many parts of a homeowner's journey through building or renovating a home.
You have to know yourself. You have to know what helps you make decisions or helps you feel comfortable with saying yes or no, or helps you feel comfortable with spending X or Y dollars. And that's not something your architect can answer for you. That's not something your builder can answer for you.
In fact, we don't really actually care one way or the other, not in a unkind way, but in a like, well, it doesn't matter if you want to spend 500 (thousand) or a million or whatever – whatever, we're here to help you align your scope with the dollars because if you want to spend 500 versus a million, you're going to have a different ability, you're going to have more stuff you can put in the cart or not. So, I think it's about knowing yourself.
So, this person is saying they're eager to get numbers and make decisions, but the architect is encouraging us to develop things further. So, I'm going to read into that a little bit and I'm going to say, maybe this architect says, "I know you're really eager, but I can also tell that you're going to need some more detail that you're not actually going to be comfortable with the back of the envelope number in order for us to keep going."
A good architect is actually very adept at reading their clients and understanding, "Hey, there isn't a one size fits all process here. We have to think about what works for you." And that entails a homeowner knowing themselves, as I said, but also listening to the architect who is listening to all the things the homeowner is saying or not saying between the lines.
Sheri Scott (46:06):
Yeah. Assuming they're a good architect, and we’ve said this so many times. Assuming it's a good builder, you can assume that we're all working toward the same goal, making you happy and giving you a house that you love. There are some architects that are kind of a pain in the ass to work with, and they want to do it their way, and they want to do their process and they won't listen to the client.
So, we've taken on projects where clients have had bad experiences with architects as well. And so, it also goes to say just what you said, Marilyn: know yourself and know when you do need to push back on your architect and say, "No, I need to get something here. I need to get some kind of feedback."
Marilyn Moedinger (46:53):
And your architect should be able to explain to you why they can or can't do it. There are times when we do have to say no because gravity or code or … there are things that we can't do, but I've often said that you can do anything, it just takes time and money. I mean, we can do whatever. So, if you do want everything priced down to the penny, we can do that. It will just take time and money to do that.
Sheri Scott (47:24):
Well, it will. And I was just thinking in terms of getting drawings complete. So, in a new construction process, a lot of times people are so eager to dig a hole.
Marilyn Moedinger (47:36):
They are.
Sheri Scott (47:37):
And in the Midwest, we have freezing winters, and so there is a timeline of when it's too late to dig, you'd have to be pushed to the next spring. All of those things kind of factor in. So, sometimes, we fast track it a little bit, and so we get permit drawings done, you get a permit to build, and you start digging a hole.
Well, that's great and it keeps your timeline in track. However, you do not have all of the cost implications. You do not know how much this is going to finish for. It's a risk and you need to be able to balance that risk and know if you're risk adverse and you want everything itemized out, and you're going to know exactly where everything is coming from (not that there won't be unknowns) – but that is way less risk than starting before you have all of the selections made, all of the specifications made.
Marilyn Moedinger (48:35):
And also, with that, comes, you get locked in. So, now, all of a sudden, let's say you're two months further along and you're like, "Oh, actually, we're further in the design and we realize that the house should be this shape instead of that shape." And it's a minor change, but you've already got a foundation going.
And so, I often encourage people to take a step back and say, "Your time now, if this is your forever home, a few months now or even a year now will not matter at all when you're in this house for 20, 30, 40, whatever years."
It just doesn't matter. You don't want to trade a month of time for ... you'll forget all of that once you move in, but you won't forget it if you pushed it too fast and you made a bunch of decisions and now you regret. And I think that happens with pricing all the time. People are very, they're very focused on the thing that's right in front of them.
So, a conversation that comes up a lot in the Boston area is around, "How much should I spend on my renovation because I'm going to be here forever, but resale values say, and my equity says that I can spend $500,000 on this renovation. And if I spend more than that, I'm going to spend above the value of my equity plus this renovation."
Well, that's taking a view as if you're selling it tomorrow when this is a forever home. Well, do you really think that property values in Cambridge, Massachusetts are going to remain the same for the next 25 years? No, they aren't.
So, sometimes my clients actually make what looks like a weird bad decision today, but I talk to clients who they spent a ton of money on their renovation, at the time everyone was like, "What are you doing? That's way too much money, blah, blah, blah." Five years later, they've already exceeded that on the value. They've already gotten all their equity back.
So, this is not me telling anyone to make risky financial decisions. This is me saying to zoom out and look at the whole picture, look at the timeline of your project as not just, "Well, if we don't start digging that hole by October 15th, we are not going to get in until blah, blah, blah, blah."
Okay, true and I'm all for speeding up a process, but also don't do things that are about today only, and not about the next few decades you're going to live there. So, we're kind of off on a tangent there, but I think it's important (laughs).
Sheri Scott (51:11):
Yeah, it is important. So, back to how complete should the plans be? I already talked about our process, in the beginning, it's the hip number from us. Then we do a pricing set, then we can split these two up and do a permit set, and then a final selections and specification set.
So, those are kind of the four checkpoints we have. We would rather them be three checkpoints so that the permit set is done along with selections and specifications because that's your final kind of contract price.
Marilyn Moedinger (51:47):
We don't do a permit set that's separate from our CD set. The process of doing all the selections and the final drawings takes longer than the permitting process usually. So, then we'll have a permit and we don't have drawings where everything's figured out yet. So, that's why we do it that way.
To answer the question, kind of bring this plane in for landing here, I think it has a lot to do with the exact situation that you find yourself in. And I feel like this is a theme today in these questions we've been asking, but also just generally, there's no one size fits all answer.
So, thinking through things in a comprehensive way that's about what's best for you and your family filtered through trusted professionals who can help guide you and guide the conversation means that you'll end up with something that really works for you and your family, and might be paradoxically different or even the opposite of what you thought it should be at the outset because of what you learn.
Sheri Scott (52:45):
Yeah, that's good. And with all three of these questions today, it's all about your investment. These are good questions because you deserve to ask all of the questions when it's concerning your money and where you're going to be spending all of your personal time. So, take the time to ask the questions, get a process that works for you, and get an architect that you trust and can lead you through.
Marilyn Moedinger (53:12):
And listen to that architect. If they're a good architect, listen to them because they're bringing you tons of experience that you don't have. Don't hire someone, then ignore everything they say. That's also important too, and listen to our podcast because you can hear lots of people tell what they would have done differently. So, listen to other people who have been through the process as well.
Sheri Scott (53:35):
Thanks for joining us today on Home: The Second Story for our mailbag episode. Questions for us? We would love to answer them. Topics, you'd like us to cover or interested in being a guest? Reach out at admin@htsspodcast.com, and follow us on Instagram. See you next time.
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