How the Design Agreement Works for a Custom Home & Whole House Remodel

HOW THE DESIGN AGREEMENT WORKS FOR A CUSTOM HOME AND WHOLE-HOUSE REMODEL

Hello, Brian Freeman with Freeman’s Construction. Today I want to explain our Letter of Intent and Design Agreement. This is our front-end process that we walk our customers through when preparing to build or remodel their home. We hold initial project consultations onsite on our customer’s land that they want to build on, or at the home that they want to remodel. Our clients first request and pay for that project consultation, and then we schedule that meeting. Once that meeting is complete, we identify what needs to be done. We look at past products that we’ve completed and share that information with our client. This gives us a good idea for budget costs so that we can provide a ballpark number based on recent market trends.

Once we specify price point and project expectations that our client is comfortable with, we enter into a design agreement, also known as a Letter of Intent, and we map out the project and complete the design. We break this design agreement into two different stages. The first stage is Preliminary Design. The second stage is Final Design.

PRELIMINARY DESIGN

The costs for the preliminary stage range between 2% to 3% of the overall cost of the project. During that preliminary stage, we create the floor plan concept. The floor plan concept includes designing the floor plan and exterior elevations. Once this is complete, we have a framework to discuss the level of finishes to install in the home.

The finishes include flooring, bathroom & kitchen tile, wall coverings, plumbing fixtures, electrical fixtures, and many other specifications. Once we have identified the scope of work, we collect material and labor take offs and compare the results to our past projects to make sure that this project is going to come in close to our budget goal. Once the close budget has been established, we move into the final design stage. Before we move into Final Design, we confirm that the build budget and finishes level lands at the appropriate price point for our customer.

FINAL DESIGN

The costs for the final design stage range between 2% to 4% of the overall project costs. During this final design stage, we complete the plans and send them to structural engineering. We also obtain the energy calculations, which includes the photovoltaic system, installation requirements, HVAC, windows and glazing, and several other things. We also need to obtain truss calcs and other items. We collect everything required to create a submittal packet for permit application. If you want any 3D modeling of the home, we can also provide partial sections or the entire home itself.

Final design also includes a detailed specifications package. We write your spec book for your particular project. This includes every detail in every section of the project and all the selections that you need to decide on for each cost breakdown line item. Our specifications book allows you to go through every selection to confirm every checkbox, and it also contains a selection schedule so that our client knows when selection cutoff dates occur. Often these selections take up 30 to 40 pages in our specification book. The final design phase transitions into the bid-out to ensure that the numbers meet up with the desired budget. If everything looks great, that’s when we draw up a building agreement and move forward with your project.

This is the cumulation of our letter of intent and design agreement, and we’ve found this process to help our customers right from the beginning. Thanks for taking the time to listen. I enjoyed sharing this information with you. Have a great rest of your week.