Deconstruction vs. Demolition

Recently I read an article in the Seattle Times Home and Garden section about deconstruction versus demolition, both of which I’ve had experience with as an architect. “On average, more than 75 percent of a home can be reused and recycled”, said writer Stacy Downs.

When you hear the term “tear down”, most homeowners simply have the contractor tear down a home, take it to the dump, and start a new home with new materials. The art of deconstruction, where a contractor takes the time to disassemble the light fixtures, cabinetry, doors, door handles, plumbing, and other parts of the house, is becoming more and more in vogue.

Some of your plumbing and light fixtures can be reused on your new home. Your original concrete foundation, garage floor, basement, patio, driveway and brick chimney could be crushed and used for your new home’s foundation backfill, potentially saving you thousands of dollars.

In the case of the mountain style homes we design, recycled timbers are extremely valuable. Not only are these rustic timbers physically beautiful, but they are also sometimes bigger and longer than those commercially available, not to mention the strength of the old-growth wood.

I designed a new home a few years ago in Bellevue, Washington where the old home was deconstructed. It was the homeowner’s idea, and at first I had thought they would lose money in the deal. Deconstruction is much more labor intensive and the costs of deconstruction are initially higher. However, if you’re willing to wait until after taxes, you could actually earn money if you have it appraised for the value of the salvageable structure.

Not only could you get tax benefits, you could also get extra LEED points, as well as help ease the minds of the environmentally conscious. More than 30% of waste that goes into landfills consists of building materials. For more info, or to purchase recycled goods, look up your local Habitat for Humanity ReStore resale outlet. Proceeds help your local Habitat affiliates fund the construction of Habitat homes within your community.

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John Hendricks, AIA Architect

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Negotiating with a Contractor

Negotiating with a contractor often gives owners the best value for their money. Working with a proven and reliable contractor leads to less headaches, the quality is known up front, and the building team (including the owner, architect, general contractor and subcontractors), is on the same page. A negotiated fee can be a higher cost up front, but the end cost can be lower than in a competitive bid as there are typically less change orders and the project is built faster with smoother project administration. A successful negotiation is a win-win for both parties.

Building a new home or doing a major remodel involves a lot of decisions. One of the most difficult choices is selecting a contractor to do the work. Choosing the right contractor for the job is extremely important, and several things need to be considered before committing to signing a contract for one of the biggest investments many of us will ever make.

Home Construction

A Home Under Construction with a Contractor Selected by Negotiation

Building a new home can take from a few months to years, and during this time you (and/or your architect) will be working closely with whoever is doing the construction. Reputation, references and examples of past work should be carefully researched for all potential contractors. Chemistry is an important aspect of a successful owner/contractor relationship as well, and should be considered during the selection process. It is a good idea to talk to past clients (and your architect) and learn about their experience working with the builder on a long term project.

The method you use to choose a contractor should be based at least in part on what your priorities are. Competitive bidding is one method that is used for selecting contractors, and is often a good choice if low cost is your top priority. It is a time honored way of selecting contractors, and works well in many situations. One downside to bidding is that the low bidder isn’t always the best choice, and choosing based solely on price often leads to disappointing results.

Some of our clients choose to select a contractor based on their qualifications and reputation, and then negotiate with them to determine a fair price for the project. When quality of work and service are the highest priorities, this can be a better method than competitive bidding. If you choose an honest contractor that has experience building the type of home you want and has established a reputation for delivering high quality work at a fair price, you will likely be getting the best value for your dollar. As architects, one of the services we offer is helping you choose a quality contractor that is a good fit for your project.

Home Construction Negotiated

Another Home under Construction with a Negotiated Fee

If possible, it is a good idea to have a contractor selected before the design has been completed. It is often helpful to have input from the contractor during the design process, and they can provide construction advice and periodic cost estimates that help to stay within a budget. Contractors typically aren’t getting paid for this, so it is only fair to be sure you are going to hire them before asking too much.

Arriving at a contract price is often a give and take process. Most contractors prefer to work on a cost plus percentage basis, which means that you will be reimbursing them for their cost for materials, labor, permitting fees, subcontractor fees, and any other cost directly related to the project. In addition to this, they charge a percentage on top of the direct costs which covers their overhead and profit (O&P). While the direct costs are usually not subject to negotiation, the overhead and profit percentage varies. Typical O&P percentages these days are 8% to 15%, with 15% being reserved for the very best builders. In some of the busier resort areas 20% is not uncommon, though they’d better be elite contractors with high quality and service.

In negotiations with the contractor, there is usually some latitude in what percentage they charge, and in what portion of the work should be subject to overhead and profit charges. Depending on how busy they are, and how the market is at the time, the contractor may be willing to negotiate on their overall O&P charges. Unless it is negotiated and contracted otherwise, most contractors will add the O&P to all portions of the work, since as a general contractor they are responsible for coordination of all the trades and for making sure the final product is correct.

It is a good idea to ask a contractor how they select their subcontractors. Most established contractors have a group of regular subcontractors they use, and sometimes this can lead to non competitive pricing by the subs, since they know they will get the job. A good contractor will keep his subs honest by getting bids from competing subs, or by knowing what things cost and refusing to pay escalated prices. Make sure your contractor is working in your best interest and getting the best value for your dollar.

Another cost item that you will want to know is what rates the contractor pays his help. Most contractors have employees that are paid hourly and billed at some multiplier of their wage to cover insurances, taxes, etc. If you are on a cost plus percentage contract, you will want to make sure the contractor is paying his workers a fair price for their experience level and compared to the prevailing wages in the area.

An Architect can offer you help in deciding which method of selecting a contractor will be a best fit for your project, its budget, and your goals. We keep up to date on what things cost and what the contractors are charging for their services. We can suggest quality contractors that will be appropriate for your project, and help you negotiate with them to arrive at a contract price that is fair to everyone.

Tom Russell, LEED AP and John Hendricks, AIA Architect

Hendricks Architecture; mountain architects located in Sandpoint, Idaho. Visit our portfolio for examples of some of our recently completed custom projects. Feel free to Subscribe to Hendricks Architecture’s Blog.

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Good News On the Remodeling Front

Architects and Contractors who specialize in residential remodels should note and take heart in the following.

The Joint Center For Housing Studies (JCFHS) of Harvard University forecasts remodeling activity to start increasing 3.1% in the 4th quarter, with a larger jump of 11.8% to follow in the 2nd quarter of 2011 as people start spending on home improvements. Among other factors, currently there are many homes that have foreclosed that are being picked up and having major remodels.

The JCFHS measures improvements with such items as additions and kitchen and bath remodels. Contractors are more optimistic as well with the low interest rates fueling spending on big-ticket upgrades. These forecasted improvements are a breath of fresh air after a 3 year decline.

As we wrote last September in our blog post “A Great Time to Remodel” there are many factors that would lend itself to remodeling at this time. Construction costs have dropped, those interested in selling are upgrading so their home is a standout among the others, tax incentives for energy efficiency are still available and more. Now is an ideal time to rethink and begin the remodel you have been postponing.

Annie Hendricks, contributing author. Annie received a B.A. In Economics and has worked as a trader and portfolio manager both in New York City and Seattle.

Hendricks Architecture, mountain architects in Sandpoint, Idaho.

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Choosing a Contractor by Competitive Bidding

An important service that we perform as Architects is guiding our clients through the bidding or negotiation process. While it’s not the only way of selecting contractors, some of our clients prefer having a few qualified builders submit bids as a way of competing against each other to win contracts. Bidding can be a good method to select a contractor as long as the process is carried out in a way that is fair to everyone and with the understanding that price alone is not the only basis for selection. During your initial meetings with an Architect, it is important to determine what approach you want to use to select a contractor.

For bidding to work as a valid selection process, several factors need to be considered:

1. Bidding documents need to complete, detailed, and contain all the information required to develop an accurate price for the work to be performed. If the drawings and specifications do not contain enough information for the contractor to accurately price the work, they will almost certainly add to their bid to cover themselves from having to eat the costs of vague or poorly documented work items. Incomplete information in bid documents forces the contractor to make assumptions and leads to inaccurate bids, which almost always costs the homeowner more. A common mistake people make is to try cutting project costs by negotiating a reduced fee from the Architect in exchange for a less developed design package, or in choosing an inexperienced designer or draftsman to prepare the plans. It is a worthwhile investment to spend a little more up front for quality drawings and specifications, with the payoff realized in lower overall project costs and reduced headaches. Creating quality bid documents is one of the many ways an Architect can add value to your home.

An architect's plans should be complete and detailed.

An architect’s plans should be complete and detailed.

2. Bidders should all be in the same “league”. Before choosing potential contractors and asking them to bid a project, it is a good idea to research the candidates and talk to their references. They should have a proven track record of successful completion of projects that are similar in scope to the one they are being asked to bid. A construction company with a few employees that uses a pickup truck for an office is going to have a lot less overhead than a bigger company that has an office with support staff, provides benefits for their workers, and is well insured. Figure out the level of service you want from a contractor, and choose your bidders accordingly.

3. Limit the number of bidders to three at the most. Any more than that and you will be spending time and money responding to lots of questions. It takes a lot of time for a contractor and his subcontractors to develop an accurate bid, and it’s time they often don’t get paid for. If there are too many competitors, some may opt out or not spend enough time creating their bids, and the results will be skewed.

4. While contractors are preparing their bids, make sure any information that is communicated gets to all the bidding parties. It’s common to have a contractor call and ask for clarification, substitutions, or for information that is not in the documents. For bidding to be fair to all, written addenda or clarifications need to be sent to everyone and become a part of the bid documents. This can be time consuming, so clients should be willing to compensate Architects for the time it takes to make sure bidding is done properly. Well prepared drawings and specifications can help minimize time spent responding to inquiries during bidding.

A reputable contractor will build a quality home at a fair price.

A reputable contractor will build a quality home at a fair price.

One important thing to consider before deciding if you want to award a contract by competitive bidding is what the priorities are for your project. Bidding can be a way to get a project built for the lowest cost, but sometimes construction quality can suffer in this type of relationship. If creating a high quality home is your top priority, it may be better to select a reputable contractor early in the process, foster a good relationship with them, and then develop a project budget that everyone can agree on before signing a contract. A good contractor knows who the best subcontractors and suppliers are, and unless one really stands above the rest, can secure the best quality at the best value by providing at least two bids from most of them.

Tom Russell, LEED AP and John Hendricks, Architect AIA, NCARB

There are many builders in the Northwest who build quality heavy timber construction. If you are interested in creating a mountain style home, we would enjoy the opportunity to work with you on the design, and can recommend some excellent Contractors. Hendricks Architecture specializes in the design of timber mountain style homes and cabins. While it is not the only type of architecture we design, most of the homes we’ve completed are in mountain resort areas throughout the West. If you are interested in a mountain home, or you have any other inquiries, please contact us.

Hendricks Architecture, mountain architects in Sandpoint, Idaho.

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