First Budget

“You’ll see a red box that shows we are way over budget.”

That wasn’t how Shaun’s cover email for the first budget started out, but that was the line that made my stomach drop. He also mentioned that structural engineering was running behind and likely wouldn’t be done until the end of the week, putting us at least a week behind schedule for a fall groundbreaking. And that was if the permits got pulled fast. But back to the money.

The spreadsheet Shaun sent us broke things down into “hard costs” (labor, materials) and “soft costs” (profit and overhead, other professional fees). When I first scanned through it, it didn’t look all bad. Our target budget was $600,000. His breakdown put us at $634,000. We could live with that. 

Then I realized I was only reading the “hard costs” subtotal.

Add in soft costs, and we were up a build budget of nearly $800,000 – 25% over our target. And that was with Shaun cutting his profit margin in half.

Things broke down like this in the first budget (I’ve folded together labor and material costs to streamline things a bit):

The Detailed First Budget

Site Work
Footing Excavation$9,826
Foundation Excavation$6,543
Sewer Trenching$12,843
Utility Trenching$13,262
Concrete wall$22,053
Concrete Slab$2,729
Asphalt Driveway$28,021
Exterior Wall$27,571
Shed Roof$10,744
Interior Partition$4,664
Exterior Walls
Wood Siding$54,243
Insulation Cavity$13,851
Insulation Exterior$11,115
Entrance Door$4,190
Sliding Door$2,900
Garage Door$2,656
Shed Roof$16,844
Drywall and Thincoat wall$28,175
Drywall and thincoat ceiling$7,773
Interior doors Solid Core$15,231
Closet Door System$3,965
Range Hood$1,440
Garbage Disposal$519
4 Fixture Bathrooms$19,096
2 Fixture Bathroom$3,177
Gas Fired Heating$11,502
Hot Water Heating$21,728
Electrical Service$1,868
Lighting wiring$1,936
Switch wiring$3,080
Receptacle Wiring$3,057
Disposal Wiring$81
Dryer Circuit$129
Exhaust Fan Wiring$265
Light Fixtures$7,520

Hard Cost Subtotal$551,846
x1.15 Location Factor$634,623

Soft Costs
Civil Engineer/Survey$2,500
HERS Consultant$2,200
Summit County Permits$9,188
Architecture Fees$60,000

Soft Cost Subtotal$156,665
Hard Cost Subtotal$634,623
Total Build Budget$791,288

This was unnerving. It gave the impression that either the initial plan wasn’t conservative enough from a cost standpoint, or Shaun didn’t push back hard enough when we suggested changes that increased the square footage (and therefore the cost), like smoothing out the jog in the north wall. Whatever the cause, it was an unpleasant surprise. 

Trimming Fat

Shaun flagged a few things that could serve as low-hanging fruit to trim: the flooring allowance, the deck, the driveway, the siding. But when I dropped everything into a spreadsheet so I could tinker with the numbers, they still didn’t look great.

By my math, even with some shaving, we were still talking about a $700,000 build. Still $100,000 over our target. He mentioned potentially relaxing the “location factor,” which multiplied material and labor costs past what the “should” cost to account for higher prices in the mountains. But since that number is a forecast, we didn’t want to make an optimistic guess now only to run over-budget later.

We emailed back and forth about some other places to shave things back (interior fittings and surfaces; the siding, since we don’t want to maintain wood anyway, etc.). We want to keep the square footage, so a lot of the structural numbers (framing, roof, rough electrical) were essentially fixed. They also could be checked against fairly firm benchmarks from Shaun’s other projects, since they didn’t fluctuate much based on tastes. Our focus turned to creating a high-end shell while potentially skimping on some of the interior finishes, which could be upgraded over time. We also asked about other room for movement, including whether we could pare down the architectural fees, even though we were already midstream on that contract. Shaun sounded optimistic that we could bring things down to land within budget; the question was where we wanted to compromise. We set a call to talk things over in some more detail.