by Glenn M. Travis, Principal, GMT Home Design
Before committing to a custom home build or a major renovation, every homeowner asks this vital question:
"What can I get for my budget?"
It's a great, practical question. Everybody has big ideas and dreams, and everybody has some budget limitations, and sometimes there's a gap between those two things.
You have to put some trust in your designer and builder, because they're the ones with experience in what different ideas can cost. But you also want to feel assured that those trusted professionals are working to keep your costs down (not working to keep their price tags up!).
In the construction business, figuring out how to meet design goals in the most cost-efficient way – giving the homeowner the most bang for their buck – is known as "value engineering," or VE. It's a positive-sounding term, but it's not always looked at that way, because when it's done wrong, it amounts to "going cheap." And when value engineering is an afterthought – a last-minute search for money-saving solutions when the building phase has started – it can actually wind up costing you more money, instead of less.
That's a big reason why the design/build approach to home projects is a natural fit for value engineering. Having your architect and/or designer and your construction company on the same page from the beginning means you start seeing realistic options and costs early on.
We've been doing this for more than three decades (I guess time really does fly when you're having fun!). We are big believers that value engineering is absolutely required in order to get happy clients who love their homes and will refer GMT to their neighbors and friends.
In fact, I'll even say that when it's done right, design/build includes value engineering from the very start.
It starts with creative thinking about achieving your goals, right from the site consultation, which is the first step in GMT's process – before a contract has been signed. As your project progresses, we work collaboratively to turn your ideas into schematic drawings; then we pause and look at the projected cost numbers together with client and construction partner:
What choices can we offer to create the most overall value for this homeowner? Where do they want to add or subtract?
Let's dig into how you, as a homeowner, can use design/build to your advantage. We'll give you some specific examples of how we at GMT have applied value engineering principles for different clients in different situations.
Value engineering is making cost-efficient choices, while achieving your project's goals
"Choice" is a big word in the way we do value engineering for our clients. Because we often work in design/build collaboration with our construction partners, we can help homeowners ask the right questions about their goals and priorities, and offer creative solutions that they might never consider on their own.
One example: often homeowners who want a new first-floor primary suite think that the only way to get it is via a large addition to their home. However, adding to an existing foundation is expensive – approximately twenty percent of your project cost goes "straight into the ground."
But experienced design/build providers know there are other options to consider.
- We've had lots of success right-sizing an expected addition (for example, adding 1,000 square feet instead of 1,500) while "reclaiming" some space from the existing footprint of the home to still give the homeowners all the space and function they truly need. In one case, a client described a master plan for an addition that would have cost roughly $750,000. But that is more than the total current value of the home!
Instead of adding more square feet, we repurposed about 25% of the first floor space. The owners were using a first-floor primary bedroom as an office, but that was more space than needed. Our value-engineered new design took out one load-bearing wall, added a beam and a repositioned wall, giving some of the office space to the living room. The client loves it – it gives them what they need, faster, and at much lower cost. - Full foundations aren't necessary for every addition. A client wants a new family room. They have enough storage already, so do they need a full basement and foundation? Maybe they can use a crawl space, or concrete piers, or helical screws instead. These aren't the right solution for every project, but when they are, they are much less expensive.
- For some clients, "phasing" is the right option – identifying which parts of the envisioned dream home are most important now, and which can be efficiently set aside for a second project, down the road when budget allows. Good design can make phase one look and feel fully complete, while also making the construction of phase two easier.
Here's another useful thing for homeowners to know: After the question of the project's overall size (how many rooms, how many square feet), on larger homes the big ticket options in terms of pure cost are:
- windows
- siding
- roofing
- millwork (molding, window frames, and so on)
- and cabinetry.
If your dreams are stretching your budget, those are places to look for lower cost options that still give you the space, function, and look you need.
For instance, a large custom home might have 30 to 40 windows; the difference in cost between a very good window and a super premium line can add up quickly. And for siding, fiber cement is durable and fairly inexpensive; brick and stone can cost five to ten times as much! You might have the budget for that; but we can also show how a great design might (more affordably) incorporate stone siding in certain areas as an architectural highlight.
Again, these are choices, and design/build is a great approach for quickly zeroing in on the right mix of materials for your tastes and budget.
A couple more examples of value engineering and homeowner choices from recent GMT design/build projects.
- Recently, one client who was planning a whole-house remodel wanted a stone veneer on the chimney. We included it in the initial schematic design; the mason came back with a price tag of $90,000 for materials and labor, just for the chimney. It looks fantastic in the renderings, but to keep the overall budget down, the client said let's remove that veneer from the design and go with something simpler. The new look is certainly nice but less dramatic, it's true. But to this homeowner, the stone veneer wasn't worth the extra cost.
On the other hand, a client will choose a more costly option, because the result is worth the cost for them.
- For one homeowner, we were tasked with combining two smaller bedrooms into a single primary suite, also incorporating a totally remodeled bathroom and a new walk-in closet. The original plan was to work around the existing ductwork. However, with the owner's permission, we produced a second design and 3D-rendered floor plan to show how we could change the space by moving the ductwork, with better flow and more natural light brought in. The client (and the builder!) loved the result, and the owner decided it was worth paying an additional $7,500 to have the ducts moved.
- Cabinetry prices have gone to the moon in recent years. For a client who wants custom cabinets in a mudroom, powder room, pantry, and more throughout the home, the cost estimate just for the cabinets is above $200,000. Another approach is to do built-in shelves in some or all of those areas; these can be built on site, still adding a nice New England touch but for quite a bit less money.
That's value engineering: helping the owner make an informed choice about where they can get the most value for the money.
What value engineering isn't (or shouldn't be): Going cheap
Some construction industry people say that VE actually stands for "vicious elimination". Some describe it as "a process where architectural design dreams get dashed."
These are jokes, yes, but there's a hint of truth there. They arise from the many cases where value engineering is done poorly, late in the process, or both. VE should NOT mean using the cheapest building materials. Cheap stuff often requires more maintenance and still has to be replaced sooner. Worst case, it's also less safe. This isn't engineering value, it's just raw cost-cutting that doesn't save you money in the long term. You may select less-expensive windows for your home, that's fine, but your designer and builder shouldn't be presenting you with bargain-price "options" that are going to leak heat (i.e. money) during New England cold-snaps.
In a similar vein, it's not smart to just assume you can slash your allowances for appliances, cabinets, and fixtures. Or to just remove all of the wainscotting, shiplap, crown molding or other interior millwork. These types of details are more important to some owners than others, but you end up with a very different space. You still want your house to feel like a home. If value engineering doesn't keep that goal in mind, it doesn't provide you with "value."
Again – a true design/build project should apply a VE mindset throughout. This will help you think through your options early on, consider creative ideas, and figure out the most cost-effective way to get all the "bang" your bucks can deliver.
About the author: GMT founder and principal Glenn M. Travis is New England born, bred and educated, with more than 30 years' experience helping homeowners design and build their dreams.
Learn more about design/build with these blog posts - a little knowledge can make your project more efficient and less stressful!
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