Which Comes First: Design or Budget?

Which should come first: a home design or the budget? Many projects have remained on the drawing board because the owners discovered that the cost to build was beyond their budget. How do you know what to design if you don’t know what it’s going to cost? 

Designing to a budget is an effective way to ensure that a design gets built. But how do you create a budget before a home is designed? 

Understanding the budget goals of the project requires a good understanding of construction costs, something that many designers are not qualified to do. Conceptual and preliminary estimates should be made before and during the design process. This helps prevent surprises and ensure the design aligns with the budget. 

When a contractor presents an estimate, always clarify which type it is: conceptual or preliminary. Here’s the difference:

Conceptual estimate 

A conceptual estimate is often needed for planning a project. Accurate cost information is essential to determine whether a project is viable. Cost-per-square-foot is the most common technique but can be misleading and inaccurate. Unit cost comparisons from completed project records are the best gauge.  

A conceptual estimate should include adequate detail to show everything that is included and not included. This step is often required prior to committing to design or professional services fees. A good conceptual estimate should provide enough information for the owner to have a clear understanding of how much home they can purchase for their money. 

Preliminary estimate 

As the design of a home commences and a scaled floor plan is available, preliminary cost estimates can be started. The accuracy of the estimate is dependent on the level of detail available. It’s common to produce several preliminary estimates as the design progresses and decisions are made about finishes and features of the home.  

Unit cost pricing, consultation with trade partners and historical records are beneficial and can be used to help the owner establish a reasonably accurate budget during the design phase. The estimator assembles bids along with his own calculations to produce an accurate cost to build.  

Note: Do not choose a builder based solely on a conceptual or preliminary estimate. It’s very likely that the total cost will change substantially before construction is ready to begin. 

Many home designs are never built because they were created without the input of an experienced construction estimator. By beginning the estimating process during or even before the design phase, you can minimize surprises and build your home with confidence. 

Your home is a precious place. At Green Square, we believe that the experience of designing and building your own home should be rewarding and enjoyable. We understand that selecting a builder is challenging. The process of designing and building a home involves numerous decisions and selections from criteria that includes price, quality, appearance and performance.  

How can you possibly understand everything unless the builder is willing to share all this information? Green Square’s transparent process provides in-depth details so you are thoroughly informed during each step of building your home. Want to learn more? Reach out to set up an introduction meeting. We look forward to talking to you.