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Pre Construction costs: deal makers or deal breakers

So you are considering a major remodel project for your home. You have a pretty good idea of what you want to do and how much you’d like to spend on Construction, but no idea about the costs for Pre Construction.

The short answer is; the costs for Pre Construction services are typically in the range of 8 to 12 percent of construction costs for the project that was designed, excluding the variables. When you don’t know what you are looking for, Pre Construction costs can be hard to spot but two
good examples of a variable cost is Soils Engineering and Surveying. For many remodeling projects, these two outside services are not required at all. For some however, they become the focal point for structural design and the procurement of permits.

Another good example is permit fees. Twice in our own past, we have been required to cover the costs to either move a fire hydrant or install a new one as a condition of receiving the permit. This is not a common issue however its a good reminder to be prepared for everything that could come your way. School fees, Municipal Bonds, and other factors mean that Permitting fees can be all over the map from city to city. Building Solutions gets asked about Pre Construction costs all the time, and if we are going to be able to provide a meaningful and consistent answer to this question across several projects, we have to include and plan for certain costs that could either not appear at all, or could have a real impact on the Pre Construction budget.

Here, then, is a partial list of 6 examples of the major wildcards that are not usually included in that 8 to 12 percent of Construction costs, and yet could have a significant impact on the Pre construction costs

  • Outside services

Structural engineering, Geotechnical reports, surveys, energy consultants, etc. These services may or may not be required by the city as a condition of the permit. Depending on the nature of your project, they could also be a significant part of your preconstruction costs.

  • Site Discovery

This includes Water Testing, Xrays for steel in concrete, invasive investigation of existing structures, Arborist Surveys, etc.

These are either required by the City or the Engineer. They can also be driven by the clients intended design, or by the level of accuracy in the costing process desired by the client.

  • Municipal Fees

Planning Fees, Permit fees, Variance applications, etc. as required by the City and entirely determined by the project the client wishes to build

  • Public Hearings

Most go smoothly, but they can also be contentious, extending the schedule and requiring additional documentation, changes in submittals, etc. Again, determined by how aggressive the client wishes to be in the face of potential opposition to the project by neighbors or by City Hall.

  • More than 4 iterations of the Design and Budget

While Building Solutions usually only has about three iterations; You will always realize the benefits of your swift and final decisions. Need I say more?

  • Additional Documentation Required by the Client

HOA approval, Insurance or other legal documents, Financial Documents required by Funding agencies, etc.

As you can see, clients can have a significant impact on Pre Construction,and it’s the job of the design professional to guide you through the process in the most cost-effective way possible.

A talented service provider is always mindful of these variables, and will always endeavor to guide their clients through these changes, fully informing their choices with solid financial guidance. A well-designed PreConstruction Process will automatically accommodate the inevitable Human realities and keep costs down as much as possible and a well constructed Design CONTRACT will limit the clients financial commitment to the design process and give them an easy out should they suddenly need it. The PreConstruction process should be economically conservative, and optimistic overall.