When shopping for a bottle of wine, usually the first question the clerk will ask is “how much are you looking to spend?” This is not to try and take advantage of you, but rather not waste everybody’s time describing the qualities of the $300 bottle of cabernet when you are only looking to spend $15.
This is the same motivation that drives your Architect to ask for your budget. The budget is one of the most important aspects of your project, and one of the principal jobs of your Architect is to maximize the value of the money are spending; to get you the most bang for your buck. An important aspect of understanding your budget is understanding the difference between hard costs and soft costs.
Hard costs are all of the costs for the actual building of the project such as the materials and labor. Soft costs are basically everything else. There are many associated fees and hidden costs when doing a project, especially in New York City. On top of your Architect’s fees, there are typically other consultant’s fees (such as mechanical or structural engineers), filing fees, inspection fee’s, and building fees. When all of this is totaled, these typically end up being between 20%-30% of the total cost of the project. If there is something especially complex, such as a requirement to gain approval from the Landmark Preservation Commission, these can be even higher.
When clients approach us with potential projects, one of the first questions we ask is if their budget number is for construction, or if it includes soft costs as well. So if a client is looking to spend $1,000,000 inclusive of everything, we would need to establish the soft costs in order to understand how much will be left for the actual construction. So in this example, if we estimate the soft costs will be around 25% of construction, then we would have a construction budget of $800,000 ($1,000,000/1.25), and a soft cost budget of $200,000.
A good architect will help you set expectations on what the total project cost will be, including their own fees. At KDA we always send out a list of associated costs with our proposals so that our prospective clients get a full understanding of the total soft cost before starting the project. We feel this allows us to get a better sense of the true budget and gets things started off on the right foot.
If you are interested in speaking with us about your upcoming project, please do not hesitate to reach out.