by Glenn M. Travis, Principal, GMT Home Design. Last update May 2025.
There are two methods used in home renovation and custom home construction. One is the traditional design-bid-build approach; the other is design/build, which involves much closer coordination between designer and builder. Design/build isn't inherently cheaper or more expensive than the traditional approach.
The initial 'sticker price' may be higher, but better collaboration on estimates mean that the contracted price in design/build is more likely to match your final cost. That's one of the goals, to make sure you know real costs up front.
To illustrate this point, here's a nice comment on Houzz from one of our clients, regarding both visibility and cost for a significant home renovation:
The design fee is set up front, and ended up being lower overall than a by-the-hour professional we had on another project…. In a meeting with GMT, the General Contractor presented a very detailed timeline and budget (both were met with very few changes). Fast forward six months, and we are thrilled with our new modern space.
Of course that's the experience every homeowner wants! So why does this “is design/build more expensive” question come up so frequently — what's the deal with design/build costs? Let us explain.
Perceptions of why design/build will cost more — and why they aren't always accurate
We talk to hundreds of homeowners every year. In these discussions, we've found three main reasons for the belief that design/build is going to be more expensive.
The perception that design/build companies are premium firms.
Well, this perception may have started with a kernel of truth. The design/build method first gained traction with companies doing more complex construction and remodeling projects, which tend to have higher costs and therefore attract high-end firms.
On the other hand, more companies are just tossing the 'design/build' label on their work, because customer demand for it keeps growing, and they don't want to miss out on those jobs. So, you may find contractors saying they offer design/build at low, low prices — but they are looking for the lowest-cost design partners (or vice versa) rather than actually providing the level of cooperation, coordination, and communication that true design/build requires.
So, today you can certainly encounter non-premium firms claiming to do premium design/build work. You'll see a nice price sticker up front, often leading to problems later.
The lack of a separate, competitive bidding stage for the construction work.
In the design-bid-build method, multiple contractors bid to build the completed home design, and this competition can indeed bring in some low bids. We've discussed the pros and cons in depth in our prior post on the difference between the two project methods.
Higher initial 'sticker prices'.
As we noted up top, the design/build price you see up front is typically closer to the final price you will pay. If the initial contract is offered without sufficient visibility into construction costs, you often wind up paying more at the end.
Let's dig further into why this is the case!
So what really affects the price of design/build?
Design/build is heavy on collaboration throughout the project between the two parts of the equation, architectural design and construction.
This is quite different from having an architect complete a plan with no builder in mind. It's also different from a construction company "offering design/build services" but really just outsourcing the design aspect to the lowest-cost outside firm it can find — or has an in-house designer with no formal architectural training.
These negative scenarios aren't everybody by any means, we're happy to say! There are good design/build firms out there. What we advise homeowners is that you have to ask the right questions about the experience and background of the team that will actually be working on your project.
The involvement of people with expertise in both functions, particularly at the onset of the project, takes time, and time costs money. Design/build factors this collaboration into the costs from the beginning, and also fleshes costs out earlier in the process, during the schematic design phase. If the design needs to be tweaked due to budget constraints, we can easily make those changes since the construction documents haven't been finalized. This kind of iterative work is a natural part of our design/build approach.
In a design-bid-build project, on the other hand, what we've come across a lot is projects where the architect who was initially involved told the clients that their final project price "is what it is." This means the design is being created without true costs in mind. That's what often leads to sticker shock when the construction bids come in. Or, in other cases, additional real costs aren't evident until after construction has started, and the homeowner gets hit with a change order that raises the cost unexpectedly.
How change orders affect construction and remodeling costs
At the beginning of any home construction or renovation project, you'll sign a contract that reflects the work to be done, in detail, and the price you'll be charged for that work.
If those details change in a meaningful way as the work proceeds, you'll need to amend the initial contract with a change order. The change order ensures that everyone is still on the same page — homeowner, designer, and builder.
A change order doesn't necessarily mean someone made a mistake in creating the contract. Changes can occur for a variety of legitimate reasons:
You, the homeowners, may change your minds or have new ideas as the project progresses. You might decide to upgrade materials, alter the layout, or add features that were not part of the initial plan. Initially you wanted a standard kitchen, but midway through construction, you decide to go with high-end custom cabinets instead. Even with careful brainstorming up front, this happens sometimes.
During construction, unexpected problems may arise. For instance, if a contractor discovers structural damage that wasn't visible during the initial assessment, it may be necessary to make changes to the construction plans to address these issues. Example one: The builder opens up a wall during construction, which reveals a structural beam is cracked and needs to be reinforced. Example two: Excavation for a new foundation discovers unanticipated rock ledge that will have to be removed.
Sometimes, specific materials or products become unavailable or experience significant price fluctuations. In such cases, the project may need a change order to substitute materials or adjust the budget accordingly. The flooring material you chose is discontinued by the manufacturer, or the appliances you specified are back-ordered for many months. (Sounds crazy, but manufacturing and shipping have both been a bit crazy in recent years.)
So, change orders can be a useful tool for recording decisions and maintaining clarity in home construction.
In the (hopefully rare) worst case scenario, some contractors may do this on purpose, planning to offer a bargain up front and then make their margin back with "unexpected" change orders as the project rolls on. For example: the original bid lowballed line items like plumbing and electrical. This puts the homeowner (you!) in a bind. Your project is suddenly facing additional unplanned costs, but with the work underway, you're not likely to want to go looking for a different contractor. So, most homeowners grit their teeth and sign the change orders.
We'd like to think that's uncommon, but even with best intentions all around, it's hard to accurately forecast total project costs without both designer and builder working together in the calculations.
The bottom line
So what's the bottom line? We have found through the many years of working in the design and construction industry that most clients gravitate towards a process where the design and build team are able to determine what the project is going to look like and manage the costs at the same time. Approximately 85% of the projects we end up working on use this design/build model.
About the author: GMT Home Designs founder Glenn M. Travis has 30+ years' experience in architectural design. Learn more about our design/build services.
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