12 tips to avoid “My architect’s design has blown my budget – now what?”

A question from a UA Community member …

“In August we engaged an architect to help us design our reno – it’s a lift and build under Queenslander. I spoke with several architects over the phone, had meetings in person with two, and in the end engaged this architect.

I liked everything she had to say, checked out her blog, website, portfolio etc. She assured us we could achieve what we wanted within our budget of $350,000, including a pool.

Fast forward to February.

Our design is complete, and we engaged one of the builders she recommended to us (whom has also done some work for us on another reno – a flip) and whose quality of work we like, and the initial assessment of his building costs has come out at $650,000 not including pool!

This is not even close to our initial budget, so now seems unattainable. I know we can strip back some of the cost but surely we can’t strip out $300,000.

I have spoken with so many other people who have had similar experiences, so I know this is a common occurrence.

My question is….what do we do now? Write off the $10 000 we have already spent and find another architect and hope the same thing doesn’t happen? Go back to the architect and tell them they have not delivered what they promised? Sell the house and buy an already finished one?

Feeling angry, discouraged and disheartened.”

Unfortunately, this does happen. It’s not only limited to architects, however I know it is a common complaint about working with architects (you can read about others here).

I completely understand why you would feel angry, discouraged and disheartened. After investing not only money, but also time and energy into working with your designer to create your design, you’ve got emotionally invested. Pictured the home you’ll be living in once this is all done. Got really excited. So everything from here feels like a compromise and total disappointment.

So, how can you avoid this problem with your designer?

How can you work with a designer to create a great home, that’s also on budget?

Here are 12 tips to help you – looking at the different phases of working through your project.

Before you start looking for a designer:

Tip #1: Do your own homework to check your budget

You can use online budget tools and cost guides to get some ideas about how much it will cost to renovate or build your home. Play with them, and understand what impacts costs going up or down, before you rely on a designer’s advice.

Tip #2: Ask around your friends

Any friends who are currently renovating or building their homes, or ones who’ve recently finished, will have been through this experience and come out the other side – probably much wiser and with some helpful info.

When you interview a design professional:

Tip #3: Ask “what is your track record for delivering client projects on budget?”

Don’t simply take their word for it. Ask for client references you can speak to and get their point of view.

Tip #4: Ask “do you believe I can do what I want for what I want to spend?

Sometimes setting your budget can be a bit of a thumbsuck. When you’re not sure of what you’ll get, you may not know how much you want to spend. However, if you do have a budget, and an idea of what you want to do, ask the designer if they think it’s possible.

Tip #5: Consider hiring a cost professional, such as a Quantity Surveyor

You can get extra confidence by hiring a dedicated professional to provide cost reports during design work. Their reports can also be a good reference point for checking building quotes against.

When you commission a design professional:

Tip #6: Ensure the budget is included in your written brief to your designer, and included in your agreement with them

Get your budget written into your fee agreement. If it’s in writing, you may have some recourse should you believe the designer has gone over budget without your guided input and instruction.

Tip #7: Determine who’s managing the contingency – you from funds you’re keeping in reserve, or the architect in total construction cost advice

You should keep a contingency in your budget for unexpected changes on site, or variations during construction. I recommend generally 10-15% for new builds and 15-20% for renovations. If this contingency needs to be managed within the budget you have, let your designer know. Some homeowners can access those additional funds if the need to, and can manage the contingency themselves.

As you work with a design professional on your design:

Tip #8: Listen to your designer, and their advice on when you are making choices and changes outside your budget

If you’re working with your designer, and instructing them to make choices with an optimistic hope you can afford it – against their advice – then expect your design to be over budget.

(I’ve seen lots of instances where a client has attacked their architect for creating a design that’s over their budget, only to be shown an extensive paper-trail of every client sign-off they gave to make a change or choice that was over budget).

Tip #9: Understand the flow-on impact of choices you make

A mistake I see homeowners make is underestimating, or not knowing, that their attachment to a certain choice can push the budget more than they anticipated.

So high ceilings are an example … You may be attached to having 10 foot (or 3m) ceilings. However, this will also mean taller (potentially commercial standard) glazing. It can also mean extra lighting, and extra scaffolding during construction. Also extra plasterboard lining, and painting, and sometimes additional structure. All those ‘extras’ will add up.

Tip #10: Keep communication honest and open

I’ve had homeowners tell me “Oh, you never tell your designer what your budget is – because they’re going to overspend it anyway”. That doesn’t sound like the beginning of a great relationship, built on trust and collaboration!

If you want honesty from your designer about your plans and your budget, then be prepared to give it too.

Tip #11: Get cost estimates along the way (don’t wait until you’re ready to start construction)

I’m still surprised – that homeowners wait until they’ve completed drawings, got council approval, got building approval, and are about to commence construction, before getting estimates and quotes on their project.

That’s a lot of time (and money) to invest based on the costing advice of a design professional.

I recommend you get estimates at each phase of your project. When you’ve done your Concept Design. Before you lodge your approval to Council. When you’re getting your Building Approval.

At each stage, you have the opportunity to revise and adjust your design to meet your budget – before you’ve got emotionally invested in an outcome you can’t afford.

Tip #12: Beware the impact on a percentage fee structure

Read this blog here (because a rise in construction cost can also impact your architectural fees too)

The special case for registered architects

A registered architect has to deliver professional services based on a professional code of conduct. Each Code of Conduct is state-based, so if you have concerns about your architect, check with the local Board of Architects in your state.

The NSW Registration Board of Architects published an information paper in 2011 based on complaints they’d been receiving on this very issue.

You can read the whole paper here – it contains examples of court cases where clients pursued their architects for damages based on designs running over budgets.

One part of the NSW Code of Conduct identifies an architect’s responsibility as:

“An architect should advise a client on the likelihood of achieving the client’s stated objectives having regard to the client’s stated budget and time requirements for the architectural service concerned. This requirement also arises as part of an architect’s duty to comply with their professional obligations to their client.”

Other professionals may or may not have a Code of Conduct they need to adhere to. And consequently you may pay less for their services, but not have any recourse if they don’t professionally perform.

They’re the professional! Shouldn’t they know what their design will cost?

It’s worth remembering that, whilst any designer – be it a building designer or architect – is in the industry, they are not the ones physically building projects, and managing the costs of that.

As an architect, with twenty years industry experience, I still know that construction costs can vary according to the strangest variables. The fact you can get 3 quotes for the same project with, say a budget of $500,000, and they vary by $150,000, certainly highlights this for me.

Construction costs are not a fixed entity either. They can be impacted by a myriad of forces. Not only in what you want to build, and to what standard of quality, but also from what the market is doing, to what suburb you live in, to how much work the builder has on.

This, and the nature of what designers do in creating one-off, bespoke buildings, means it can be difficult to ascertain accurate costs for your project – because being bespoke, your project has never been built before. At best, they’ll be estimates based on comparative projects of similar size and quality.

Read here for more about the cost of building or renovating your home.

As a homeowner, this can be challenging, as you’re seeking certainty on your costs as early as you can. My recommendation is to build your project process around this. Design, draw and cost … design, draw and cost … design, draw and cost. Each step will resolve your design AND solidify your cost – as well as manage your risk overall.

So to answer this UA Community member’s question … this was my advice:

1. check whether you advised your architect of your budget in writing, and whether it was included in your agreement with them
2. check your records to see what you’ve okayed along the way in budget increases
3. have an open and honest conversation with your architect about your concerns, and to understand if or what they plan to do about the budget overrun
4. if you’re not satisfied with their strategy, can’t achieve a reconciliation, make sure you own your drawings before you walk away (and can take them elsewhere to continue working on them)
5. if you believe you have been subjected to poor professional conduct and they’re a registered architect, then contact the Board of Architects in your state to understand what recourse you may have. You may not be willing to pursue it legally, but at least you’ll understand your options.

Remember though … it doesn’t often progress to points 4 and 5. Ultimately, we’re talking about humans, interacting with each other, and hopefully figuring out a way to achieve a satisfactory resolution.

Can you handle the truth?

A lot of the work I do with homeowners is to bring into alignment these two things:

• what they want to achieve with their project
• what they want to spend on it

My approach is always to be honest – sometimes brutally so.

When it’s early in your project, I would rather let you know when I believe your plans aren’t achievable for your budget. In my experience, it’s much better than when you’re emotionally attached to a design (or worse still, standing in a half-finished home!)

Not everyone appreciates this honesty though.

I gave one homeowner some honest feedback.

• They had a budget, and things they wanted to do with their home.
• I told them I didn’t think their desired plans were achievable for their budget.
• I gave them alternative ideas and strategies that could create a great outcome for their lifestyle and home, and would be more affordable.

They didn’t like it.

Because their budget felt like an enormous amount of money (and it was) and they had trouble believing it wasn’t enough for what they wanted to do.

Sometimes, homeowners that don’t like hearing ‘no’, keep asking until they find someone who’s willing to say ‘yes’.

Whilst it’s possible to work magic with budgets and what they can buy (who doesn’t love hunting down a bargain!), this can only take you so far in building and renovating.

So if this is you and your way … and you finally find someone willing to say ‘yes’, beware. And head back to my tip number 1.

What do you think? Does going over your budget make you nervous about working with a designer? Leave a comment below to let me know.