Balancing the project you want against what fits your budget is a difficult but necessary process for every project we design. There are many costs associated with a building project besides just the money directly needed for the construction itself. Below is an outline of the types of costs which you would see on a typical remodel, addition, or new construction project.
Construction Costs
What this typically covers:
- Hard Cost. The cost of labor and materials that go into the finished building, typically excepting large appliances (though it generally does include the installation of those appliances). This would also include any demolition, removal, or site work that has to happen to complete the project. This is sometimes referred to as the “hard cost” of the project, with every other expense (that does not go directly into the building) being a “soft cost.”
- General Conditions. This refers to work that has to happen for the project to function, but that does not directly go into the finished project. Some examples: securing the site during construction, managing water runoff, providing toilet facilities during construction, paying for the insurance which the General Contractor (G.C.) is required to carry.
- G.C. Profit and Overhead. The two categories above cover the expenses required to complete a project. General contractors charge a percentage on top of these to cover their overhead costs (the cost of their time coordinating and managing the job, along with administrative costs required to run their company) and profit. Most contractors will add their profit and overhead number as a line item percentage (usually between 12% and 15% of Hard Costs + General Conditions) to the bottom of their price estimates. Some do not, instead adding some money on to each line item throughout the estimate. No two general contractors prepare their estimates in exactly the same way, so one of the steps we typically go through is to break down each estimate as much as possible so we can compare them, apples-to-apples, and help you see where the differences really are. An important thing to remember is that the general contractor’s relationship with the subcontractors is valuable, and when you hire a general contractor you are buying that relationship, as well. There will be many different subcontractors working on a job, and a G.C. who works with them often may be able to get a lower price negotiated, or have more clout when scheduling their services.
- Sales Tax. Sales tax per jurisdiction (currently 9.5-10.1% in most of Washington State) is required to be paid on all of the above in Washington State and many other jurisdictions. This amount may be tax deductible on you federal taxes though.
Typically, these four costs make up what the general contractor will charge to construct the project. And when we talk about estimating construction costs, either as a total budget or as a per square foot cost, we are talking about all of these four together.
Estimating Construction Costs
Right now, a very, very rough rule of thumb for construction costs is $300-400/ square foot of project area. Every project is different, and there are myriad factors that will influence the cost on every job, but we have found this to be a reasonable starting point for order-of-magnitude construction cost estimating.
There are project types that will be less, and there are project types that can be much more. We would be happy to speak to you about your project to help you arrive at a more accurate budget range.
| Factors that can push /sf costs UP | Factors that can push /sf costs DOWN |
| Expanding up above existing space / tall building | Expanding out / one level building on grade |
| Small project area | Large project area |
| High percentage of new space (addition, new construction) | Less new space (ex: converting existing unfinished basement, or rearranging existing spaces) |
| High percentage of kitchens / baths in scope | High percentage of bedrooms / living areas in scope |
| Small or difficult site, lack of access | Easy access, large site. |
| Changes during construction | Sticking to the original scope and construction drawings |
Other Costs
There are other costs which are important to budget for, since most will be required to complete the job, but are typically not counted as part of construction cost. Along with the construction cost, these costs make up the “project cost.”
- Building Permit Fees. These are charged by the jurisdiction to cover their time reviewing the plans, as well as providing inspections during construction. These fees will vary from project to project, but are usually around 1%-2% of construction cost. Typically, larger projects will be on the lower end of that range, with smaller, less expensive projects on the higher end.
- Architectural Fees. These are our fees for our services. These are billed hourly and, as always, will vary from project to project. For budgeting purposes, allow for 10-12% of construction costs for new construction, and 12-15% of construction costs for additions and remodels, plus any Additional Services. The higher percentage for additions and remodels helps to account for additional time it typically takes to integrate new into old. We’ll discuss with you at the beginning of a project if we believe that any additional services may be required for your project.
The costs for each phase of our services roughly break down per the table below:
| Phase | Rough % of Architectural Fees |
| As-built measuring and drawing | Additional Service, per project |
| Schematic Design | 15% |
| Contractor Interviews and Preliminary Pricing | 5% |
| Design Development | 20% |
| Contract Documents (building permit set) | 20% |
| Contract Documents (construction set) | 20% |
| Bidding and Contract Negotiations | 5% |
| Construction Administration | 15% |
| Total | 100% |
The estimated architectural fees of 10-15% of construction costs will typically cover a full-service: schematic design through construction administration. Occasionally, we have clients that don’t want or need that level of service. Maybe they already have a contractor that they trust and want to work with, and just want to take the permitted drawings and hand them off to them. Or, maybe a client wants schematic design and a master plan to help them plan for a phased project sometime in the future. We believe that design is a good value, and that the control you get and decisions you make by going through the creation of a construction set and construction administration with us will result in a better executed project. However, every project is different and we will work with you to determine what level of service is right for you.
- Engineering and Surveying Fees. Nearly every project needs some level of structural engineering to either secure the permit or complete the construction set. Engineering fees will generally be in the range of around $1k for a small remodel, up to $5k or more for a large new house. Most new buildings and additions will also require the services of a geotechnical engineer to determine the properties of the soil they will sit on. The engineer will usually dig test pits to assess the soils bearing capacity and required slope for excavation cuts. Typically, the geotechnical engineer will also be required to perform inspections during construction of excavation, footing drains, and construction water runoff control. Their fees may be around $2k for an addition or $5k+ for a fairly complex new house. Often, the geotechnical engineer’s fees will be determined more by the site conditions and soils than the design itself.Some projects will require civil engineering to deal with drainage, water runoff, or sewer / septic field design. A project will usually require a survey of the property by a licensed survey company if it is new construction, a large addition, or close to the height limit for its zone. We will try and identify issues pertinent to your project as early as possible in the process, so that you can be aware of what other fees will be required.
- Owner provided equipment. It is usual that kitchen and laundry appliances are not covered in the construction costs, but are rather provided by the owner and installed by the contractor. This is to the benefit of the client, since they don’t have to pay the general contractor’s profit and overhead on them. We will help you to decide what sort of appliances you want for the space, but the required budget for appliances can vary greatly based on what you select. Some other typical items that a client may provide to save costs include certain light fixtures, plumbing fixtures, and installed furnishings such as mirrors and window coverings. We will work with you to find what makes sense for your project. One thing to keep in mind is that if the GC provides an item, and there is some problem with it, it will be covered under the GCs warranty and it will be their responsibility to fix it, while if something goes wrong with an owner-provided item, the owner would have to manage its return / replacement.