The architect needs to be compensated for designing your house.

I'm confused, did you have a contract with the architect? At what point in the process did the builder say he would pay for the blueprints? And did the architect do the complete design without getting any money up front or as his work progressed?

Did you tell the architect what your budget was before you started designing the house?

I'm confused, too. Has the architect been paid and if so by who?

You've written some very confusing things -
"We were told by Builder B that he can do the home for $98 a sqft, the only way to build that specific floor plan was to change around 30% of the floor plan"
Obviously, if 30% is changed, then it's not building the same plan so what's the real story?

You also say -
"this is the complete exact floor plan we wanted, and really cannot see us living at all in the home with most of it changed."
But the reality is if it's going to cost more to build the complete exact floor plan you want than you can afford to build, then you don't get to build that. Unless you come up with a way to get more $$ of course.

I'm sorry I should have proof read it more!

Ok, so in May we met Builder A. We showed him the home plan "Cordillera" by Sater Design, and asked him to build it for us. He said it was going to be out of our budget, at at least $1.5 million, and recommended the architect to build a custom home similar to the Cordillera in terms of layout.

In our first meeting with the architect, Builder A said to save us money on the blueprint, he would pay for them if we would let him keep it, meaning he has the rights to build the home again. (We never signed any agreement, not with the achitect or the builder or anything). We said sure, we don't care if you build the house again, so we'd let him keep the blueprints.

In early June we received the floor plans for the custom home. (Both Builder A and the architect knew out budget of around $600,000. After tweaking and customizing it, we loved it way more than the Cordillera, (in fact, we don't like the cordillera that much anymore). Builder A sent it for bidding in June, assuring us that we would be at budget, and that he's been in the business for 30 years and knows it will be perfect for us....etc. In July we received numbers around $900,000.

We told him if he has any suggestions on how to lower the price, because we loved the floor plan and layout of the home. He said he had an idea on how to cut the cost down. So a month goes by (around August 2nd) and he shows us that Moranda Homes floor plan. He literally printed it out probably 10 minutes before out appointment with him, and just scribbled on it and added some rooms with his pencil. We told him we didn't like that floor plan at all, and he gave it to us and just said think about it and he's sure if we saw this floor plan first we would have loved it. We said we'd think about it.

After we left, we called Builder B ( we had a mutual friend, and she told us to give Builder B a call.) We showed him the floor plan the architect drafted and he said he would build it for $98 a sqft. (Finished price $610,000, which is just where we wanted to be at.) Builder B then discovered that the plans were actually owned by Builder A, and said he couldn't build it because he could get sued, he said to tell Builder A to give us a release on the plan, and if not, we would have to change around 30% of the plan to build a home similar to it.

The problem is, we don't want to change the floor plan around, because we spent weeks customizing and tailoring it to our specific needs, and now Builder A wants $5,000 to release the floor plan. I have a feeling Builder A never really intended to build the home we wanted because he was so insistent on him keeping the blueprint, and also very insistent on us building that Moranda Home style floor plan, because he said he had built something very similar to it just a couple months before he met with us. He started to act extremely shady with us as soon as we gave him a commitment that we would build our home with him, because he knew we were in a hurry to build. Every promise that he made, he broke.

He went and told the architect around August 3rd that he was not going to build the home for us. He paid the architect $2400 in June, and he was supposed to be making the final $9,000 this week. He informed the architect that he wasn't going to build the home for us, and we got another builder, so the architect just sent us the bill, (he would refund Builder A $2400 and just send us the $11,400 bill).

So, the architect sent us and Builder A the contract via email( he included Builder A in the contract email just to show that we would sign the contract and pay the architect so that Builder A would not need to pay him) under the impression that we would just take over with the payments. Builder A said he would not give us the right to build the floor plan unless we pay him $5,000.

We are willing to pay the architect for the floor plan, but then we'd also have to pay Builder A $5,000 as well!
What I don't understand is how is it even Builder A's floor plan when we were designing it the whole time with the architect?

I doubt seriously that you're getting apples to apples comparison estimates between builders. There is a HUGE difference between someone who has the numbers come back from his subs, and someone who is giving you an off the cuff guess. Once the second builder has quotes come in, the numbers aren't going to be 400K apart. The only house that you can build for under $100 a square foot is a VERY basic one with builder grade amenities. Builder B is blowing smoke your way, or else that's the type house he's used to building, and not a true custom build. Average cost of custom builds usually starts at around $150 a square foot and goes up from there.

If you didn't have a contact with the architect, then you don't have any rights to the plan. If you want to build the plans that were developed, you need to pay the money.
But, you also need to realize that you probably developed plans for a 1M dream house and not something half the cost.

If you're in a hurry to get into a home, then buy something existing. You can easily know what the price of it is up front. And it will cost a lot less than going custom.

Thanks for the reply Holly,
Builder B has built homes for many of our friends, he's actually built a good portion of our suburb. We didn't go to him because we thought he would be really expensive, but it turns out everyone who's referred us to him has had a great experience and liked their home. (Our friends home is in an upscale part of the suburb, 5800 sqft and he built it for just over half a million.)

We set up for a meeting tomorrow, so I guess we will just see how it goes.

Thanks for the reply Holly,
Builder B has built homes for many of our friends, he's actually built a good portion of our suburb. We didn't go to him because we thought he would be really expensive, but it turns out everyone who's referred us to him has had a great experience and liked their home. (Our friends home is in an upscale part of the suburb, 5800 sqft and he built it for just over half a million.)

We set up for a meeting tomorrow, so I guess we will just see how it goes.

I know the bigger the house the lower the price per square foot so 98 seems a little low - but maybe not for a 6000 sf house.

It sounds like your having the same problem I am having , basically subs and material cost seem to have skyrocketed this spring , basically because its the first time banks have opened up the gates and money is flowing freely again.

I am hoping this fall things will stabilize ( I know at least lumber will based on futures prices )

Before you actually BUY the plan - make builder B give you an in writing contract with itemized prices for everything that he will commit to. if you are happy at that point I would pay all the fees for the plan .

otherwise you need to start over - this will save you several thousand dollars , but you loose months of time

I Am in the same boat as you , my architect said a home plan would be around this cost and we are way over .

I don't understand why you would pay both the arch and A for the plans? Either you pay the arch and you own them, or A pays the arch and he has the plans which he can provide to you for a fee (less than the whole arch fee since A can reuse them mult times). It doesn't make sense that A would have any rights to the plans if you pay the arch. I suggest calling the arch and telling him you will pay him in full once you receive a contract that is exclusively between the 2 of you, and you will have all rights to the plan. My guess is knowing you will pay faster than the builder the arch will sell to you. Otherwise, do you have a lawyer who is a family friend? I don't think the arch could sell to A without your approval since you contributed to the design. But, anything could happen since you don't have a contract. The arch sending a contract after the fact is meaningless. Lastly, the 30% concept B states seems arbitrary. There is a concept in contract law that states each party has "residual knowledge" from an engagement, loosely meaning you could use another arch and design a house substantially similar as long as you do not reuse any of the docs from the original arch. Again, this is something you would want to ask a lawyer about. If you get resistance from the arch it may be worth $500 to have a lawyer send a letter to the arch to try get the plans released, or at the very least preventing arch from selling to A. I am not a lawyer, but work extensively with contracts.

I am not sure if I understand. If there is no contract that gives builder A exclusive rights to the plan than the architect can sell the plan as many times as they want.

Usually the architect retains ownership of their work.

Hi samjal

Be very careful with the numbers you are receiving from both builders. I am certain those are not apples to apples comparisons. We live in Cleveland, OH and the our two markets are VERY similar in terms of price and construction.

We are in the process of designing and building a custom home in the suburbs and know that a high end home costs, on average, $150-$200 sq ft. Your finishing are what will really increase the price (in addition to complexity of architectural design and interior features).

We checked with multiple award winning custom home builders (all with architects and interior designers) and all of them were around the same price range. Didn't matter if the house was 3000 sq ft or 7500 sq ft, same comparables in terms of quality and construction.

One of the parade of homes in Cleveland was 5800 sq ft. That house was 1.5 million and the land was 300k of that. So $206 per sq ft. And that was a phenomenal award winning builder.

Even in the 600k range, you should be able to get a high end custom home builder in Ohio. However, you will likely be looking at $150+ if you want anything close to luxury. Anything Sater designed is luxury / custom grade NOT builder (i.e. cheap) grade.

As far as design costs go... we are paying $22,000 (50% up front, rest due when designs are 90% complete). That cost includes:

1. A custom designed set of buildable Architectural Drawings that incorporate all of your personal design specification, based on lot requirements and restriction, deed restrictions, personal input and budget. The architectural plans will include foundation plans, first and second floor plans, elevations, all relative sections, a roofing plan, a proposed basement finished plan and all other drawings required for home completion.

2. Interior Selection/Design Services - The cost will included 10 - 4 hour design/selection meeting at a variety of locations and detailed interior drawings and layouts as needed. We will be doing some computer generated images of specific interior design elements for some rooms / basement.

3. The structural design will be stamped by a Profession Structural engineer and will account for any unique soil conditions existing on the site.

4. A detailed survey will be included with existing topographical information, driveway layout, house layout, house proposed floor elevations and a proposed rough grading plan.

5. Time and effort required to receive zoning approval and any zoning variances required for the proposed agreed upon layout. Any applicable variance fees are included.

6. Final drawings to be given to the purchaser in electronic reproducible format.

If you do not have a contract for design services that is close to what I posted, do not even consider the builder. You should also retain full rights to your plans and designs.

The construction contract would be separate, however with our builder at the table... we have been able to keep a firm check on construction costs and several times have the option to discuss costs with subcontractors to make sure they were within budget limits.

Since our markets are very similar, please make sure you are getting the same quality treatment and not getting ripped off by a sub-standard builder.

I am in Cleveland as well. A 6000 sq feet home in a nice area is around 600,000, more in extremely exclusive areas. And it always costs more to build custom. You may have to decrease sq footage. Do you already own the land?

I am in Cleveland as well. A 6000 sq feet home in a nice area is around 600,000, more in extremely exclusive areas. And it always costs more to build custom. You may have to decrease sq footage. Do you already own the land?

Thank you all for your feedback, we have most of the kinks worked out with Builder A. Of course we compensated the architect as well. We weren't going to run off with the blueprints or anything !

When the builder offered to pay the architect for the design documents he was attempting to obligate you to use him as the builder or force you you to pay him for his time if you didn't use him.

You should have realized that giving up control of the design documents might cost you later considering that builder A seems expensive and your program seems unrealistic from the beginning.

These kinds of mistakes can be very expensive. If you want to retain control of a project, hire the architect yourself and bid the project or invite a builder to be part of the design process for a consultant fee that would be absorbed into the construction contract if he became the winning bidder. If the architect had been working for you he might have advised you to do this in the beginning and helped you to reign in your program. I know I would have.

Such a process might or might not have saved you money but it would have saved you pain and aggravation. Part of an architect's role should be to make sure that designing a home is fun.

I mean this in the nicest possible way:

This doesn't all add up. I don't know where the shortcoming is, but you've either misunderstood something at some point, or you've left out some important details.

You ask in your other thread whether you should undertake an owner-build. I say NO. If you're this confused about the blueprints, you're going to be completely lost with the permits, etc.

I almost never think its the best idea to owner-build. Some things are better left to professionals. When it comes to some trades I love to refer to the saying, "Jack of all trades, master of none." Sure, you could probably manage it...but not nearly as well as a professional.

The solution is simple...in my opinion at least.

Builder A is trying to bully you into using him by leveraging the plans. He did this at a risk by throwing his own money at the architect....and is betting on you feeling obliged to build with him. It sounds like now that he feels you are going to go another way....he is trying to recoup some or all of that money. Bottom line is that you don't owe him anything if you didn't sign a contract.

However, the architect and the plans are another story. Until he is paid, the architect owns those plans. It sounds like Builder A has paid him some of the fees....but is withholding payment on the remaining and that is how he is convincing the architect to send you that contract. You can't get around paying for your plans....so in my opinion, you have two options:

1) Work this the original architect to get a contract that cuts out the builder...where you would pay the architect directly for rights to the plan.

2) If he has some kind of relationship with that builder and won't do that....you can take your copy of those plans to a new architect and pay them to redraw you a set. I went through a similar situation and what I learned was that you only had to make minor changes to any plan and it is then considered a totally new plan. Builders don't want you to know this b/c that is how they sell their services. But if you look around you will see that most builders are building plans that all originated from one original plan and have just been tweaked slightly.

In my situation, I had a builder quote a particular plan on a small flat lot that cost $x.....and then I found another lot in a much nicer, pricier neighborhood that I was able to negotiate for the same price. The builder then came back and for the same plan on the same price lot, he was much higher. There was no reason for a price increase as the lots were both flat and had the same constructability features. He was just increasing the price because he had built other houses in that neighborhood as spec homes and had sold them for more. I ended up bidding out the plans he had shown me....which were just their basic plans that you could pull off the internet....we hadn't personalized yet. Then I selected a builder and had him hire a drafter to redraw the plans with our modifications.