October 2019

Debunking the Top 7 Common Myths of Homebuilding with Josh Simpson

Author: Special to CH2

We recently sat down with Josh Simpson of Simpson Construction, LLC to talk about some of the more commonly held, and often misconceived, notions associated with building a new home. For most of us, building a house is the largest investment we make in our lives. It’s a daunting process for anyone, with a multitude of decisions to make from inception to completion. Here are the top seven questions/misunderstood concepts in Simpson’s opinion:

“So how much do you build for on a cost-per-square-foot basis?”

This is probably the most frequently asked yet misunderstood questions builders receive. I like to say that cost per square foot is only used by real estate agents and salespersons. The truth of the matter is, the only way a builder can tell you what a homeactually costs per square foot is after its been completed. This is due to the fact that up to 35 percent of the cost that goes into a home is totally client driven, based upon decisions made during the construction process. We as contractors can work with our team to provide competitive pricing on the labor and material end as it relates to the “bricks and sticks.” That said, it’s the finish selections that are the real drivers in a home’s cost. When thinking about cost per square foot, you really have to dive in and ask some good questions as well. “Does this include your fee and supervision?” “Does this include exterior features such as landscape, hardscape, pool, driveway, etc.?” My recommendation is that a prospective client focus on what their overall budget is and work with their architect and designer to keep decision-making within that arena.

“Do I really need an architect for CA (construction administration)?”

When working with an architect, owners are often given the option to contract further for construction oversight during the build. This most commonly includes scheduled site visits to meet with the builder and the review of pay applications. When investing a large amount of resources into a custom designed home, my recommendation is to maintain a relationship with your architect all the way to completion. For many owners, this is their first or most significant build, and while some builders show opposition to oversight, for the client, an extra set of eyes working on their behalf is rarely a bad thing. This can protect against a builder missing key details, substituting inferior products to increase profitability, or rushing into a complicated build without a knowledgeable group of tradesmen and managers. Monthly or even bi-weekly site reports on progress and schedule can provide valued peace of mind. These visits, if coordinated effectively, can also serve as opportunities to take a second look at tricky details that result in a better product. No matter how much design takes place in the office, the words “we’ll (they’ll) figure it out in the field” are uttered more than one would think…. We appreciate the relationships developed with the architects we partner with and enjoy getting to work alongside some of the best in the industry.

“Maybe I don’t need a designer.”

Unless you are trained in interior design, I strongly suggest seeking a design professional who can assist with at least a portion of your interior needs. It can be as simple as an hourly arrangement aiding in the coordination of paint colors, wood floor stains as well as plumbing and electrical selections. I’ll provide my opinion throughout the build as it relates to construction means and methods and even architectural elements, but when it comes time to select paint colors or tile patterns, I typically step to the back of the room. I’ll even throw out the “I’m sorry but I’m color blind” claim if it comes down to it. We work with great designers and have the ability to bring in someone who can really assist a client in creating a color palette or complementing textures that they will be pleased with. You wouldn’t ask your mechanic what color to paint your car, would you? Let those who are trained in interior design assist you in that arena; leave the building to the builders.

“Should I pay for a full set of interior drawings?”

A strong yes, and here’s why. Your architect should have taken great care in establishing window and door heights that will complement ceiling heights, beams, coffered details, etc. Go the extra step and work with them to outlay your interior elevations, at least the most commonly used areas. They are going to be able to properly scale crown details, beam depths, coordinate window and door casing profiles, and ensure that massing and scale are kept in check. I’m asked from time to time, “What are your interior trim packages?” or “What type of casing/crown do you use?” The truth is, most of our clients do enlist their architects for a full set of interiors, and it provides for the best end result. I know of and have been in homes where a builder fits “Trim Package A” into a set of drawings comprised of floor plans and exterior elevations, and you can tell. From missed opportunities in adjusting ceiling heights that create warmth or privacy to integrating cabinetry that complements the way a client will use specific spaces, a full set of interiors eliminates a lot of the guess work and reduces construction schedule, all while providing the owner a more accurate cost projection out of the gate.

“Why do I need to pay for a full set of structural drawings?”

If you are going to skimp, this is the last place you want to do it. Spend the money on a full framing package for your home, period. Architects can design magnificent structures, but I’ve only worked with a few that could actually build them. A structural engineer isn’t concerned with aesthetics as much as ensuring that your home is standing for many, many years without surprise settling or failures. With more and more clients opting for open floor plans while maximizing windows, this creates great challenges to properly design for both vertical load and lateral load. While we are working on this article, Hurricane Dorian sits just off the coast of Jacksonville, Florida, heading in our direction. This is exactly the time when you’ll think back to the decision of going with a “cut-and-paste” detail package that doesn’t pertain to your home instead of having a trained eye go through your design and convey the appropriate strapping, hold down and shear wall package that your house deserves. If you’re willing to invest in hurricane impact windows, for example, don’t cut the corner that will ensure the remainder of your home is going to be there after the storm. In my opinion, this is one of the best examples of a client just not understanding the importance of the matter, allowing them to make the appropriate decision. You want this and you need this.

“Builders like change orders.”

Builders like building, not sitting in the office working on administrative tasks such as comparing a bid set of plans with the seventh iteration of a construction set. Once the initial contract is agreed upon and things are moving forward, we would like nothing more than to build the home the way that it was originally designed. That said, we know that clients are going to change things, and we are ready to pivot on their behalf. “Change orders,” or as I like to refer to them, “construction change directives,” should be nothing more than an agreement by the client and builder to pay for additionally requested services or a credit for the reduction of scope. Change orders are not meant to and should not cover costs of items that were not missed by the builder in the contract set of drawings. An agreed upon change-order fee, a little transparency, and a lot of good communication can take the sting out of this term and allow it to be a known consideration in decision making.

“Cost-plus contracts provide no protection to the owner.”

Well it depends on how it’s structured. We prefer a cost-plus contract with a GMP, which stands for “guaranteed maximum price.” In essence, it provides a fixed-cost agreement for the sum total all items with the exception of allowances. The savings below that GMP is then split between owner and builder at an agreed upon rate. I’ve spoken to many clients who shudder at hearing the words cost-plus, when the main difference between a cost-plus GMP and fixed-cost agreement is where the savings goes. With a fixed-cost agreement, every bit of it goes into the builder’s pocket. With a well-designed cost-plus GMP arrangement, the savings can be shared, providing peace of mind for the client, while still incentivizing the builder to focus on the bottom line. Pair this with full transparency of financial reporting and designated paths of payment distributions, and you’ve got an arrangement that everyone should be happy with. In my opinion, a cost-plus GMP agreement is the only way a client can truly know what their home cost to build, and there is a lot of value in that.

Building a new home is an opportunity for 10,000 decisions, hopefully this will help those venturing down that path answer at least a few of those questions. 

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