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April 23, 2018

Fallacy of Competitive Budgeting

Even when clients are building a high end estate home destined to be featured in Architectural Digest, they care about costs. It’s simple – no one wants to be taken advantage of.

But asking for competitive bids at the preliminary design phase is not the best way to ensure a cost effective selection process.

Using a competitive process at the preliminary design phase can be an ineffective and even dangerous method of selecting a contractor. The budgeting process will always result in a wide range of estimated hard construction costs by the contractors, because each firm uses interpretation and guesswork at this early stage.

Budgets at early design can vary widely – commonly, plus or minus 40%!

But those varying interpretations and guesswork can create a problem. The client wants to believe the lowest preliminary guesstimate (who wants to pay more than you have to, no matter what your means?) The client often selects a contractor based on what they perceive to be the same house at a lower cost.

[Want to download a PDF of the Fallacy of Competitive Budgeting? Click here.]

In reality, the lower estimate represents lower quality, craftsmanship or detail. Here’s the thing: once the information and drawings for the project are complete, the hard costs for all contractors will be within the same 3% to 5% range.

The bottom line is that you should select your contractor based on fee, general conditions and qualifications for the project, as the hard construction costs will be nearly the same once the design is complete.

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January 29, 2018

40 Misconceptions – Client Edition

For almost a year, Sebastian’s president John Sebastian and his team have been sharing their insights on the business of planning, designing and building high end residences.

Today, we’re spotlighting two client-based misconceptions, with advice on how to avoid them.

While some architects prefer to create their designs solo until the big reveal, we’ve found that the most successful projects are those that engage the client along each phase of the process. Clients are better informed and therefore, feel stronger ownership and commitment to the final product.

In Sebastian’s State of High End Residential Real Estate in 2018, we surveyed architects to get a feel for their clients’ level of involvement.

While almost 30% of clients have limited time to be involved, the majority actually enjoy the process and make it a priority to participate.

Misconception #8 can cause project delays and issues when the architect doesn’t take a leadership role in the project. It’s usually not the client’s fault – he or she is often unaware of the impact their decisions (or lack of decisions) have on the project’s schedule and budget. It’s up to the architect to keep the client informed, especially when decisions are needed to keep the project moving.

As the architect, you may feel that you are keeping the client happy when you make requested changes that delay the project, but going over budget and beyond the project schedule will cause ill feelings at the end that can’t be undone. Letting clients know the ramifications of decisions and changes gives them vital information to contribute to the best project outcome.

At Sebastian, we use a specific agenda format with time sensitive “hot items” clearly indicated to keep projects on schedule. Our project managers and field superintendents never leave a meeting without each action item having a person who’s responsible for that item and a deadline for completion.

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December 25, 2017

Holiday Wishes

At this special time of year, we give thanks for clients and partners like you who have made our jobs easier and our lives more fulfilling.

May peace and plenty be the first,

To lift the latch on your door,

And happiness be guided to your home,

By the candle of Christmas.

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November 20, 2017

Thanksgiving

As we ponder the precious lessons we learned this year, we also look back at the wonderful memories and good people who were part of our lives.

At Sebastian, we have a list of core values that govern how we operate. One of those is particularly focused on our relationships with the people who team with us to build beautiful, high quality homes:

Build each project with the goal of developing lifetime relationships with the client, the architect and the rest of the team. We recognize that these relationships have been and will be reason for our continued success.

May your Thanksgiving be filled with love, laughter and remembrances of good times. Happy Thanksgiving!