Check the Budget at Every Design Phase

The most expensive time to find out your house is over budget is when the bids come back on a finished set of drawings. By then you've paid for all three phases of design, and the fix is redesign, rebidding, and a later start.

The cheapest time is during design, while lines on paper are still easy to move. That takes an estimate at the end of each design phase, compared to your construction budget, with a decision about what to do if it doesn't line up.

Start with a construction budget, not just a total

Your total budget isn't the same as your construction budget. Land, design and engineering fees, permits, taps, furniture, landscaping, and loan costs all come out of the same money. If you hand an architect your all-in number as the construction number, the house will be drawn too big from day one. See The all-in budget.

Settle on a construction number first, and share it with your architect in writing.

At schematic design

The house has a layout, a size, and a general look. An estimate here is rough, usually built on cost per square foot and a few big assumptions about structure, windows, and finish level.

What it can tell you: whether the size and shape of the house fit the budget at all. That's the most valuable question in the whole process, and it's cheapest to answer now.

What it can't: what any specific system or finish will cost.

What to decide: if it's over, adjust the size, the shape, or the finish level now. Square footage and complexity are the biggest levers you'll ever have, and they're only easy to pull at this stage.

At design development

Windows are sized, wall and roof assemblies are chosen, structure has a first pass, and systems start to show up. The estimate can now price the shell with some confidence.

What it can tell you: what the window package, structure, roof, and exterior are likely to cost, and whether the finish level you have in mind still fits.

What to decide: if it's over, this is the time to trade. A simpler roof, fewer large windows, a different siding. Each one is a drawing change, not a change order.

At construction documents

The set is close to what gets permitted and built. An estimate here should be detailed, and if you're bidding, this is where the bids come from.

What it can tell you: close to the real number, as long as finishes and selections are defined. If they aren't, the allowances will still carry a lot of the uncertainty. See Make your selections before you bid.

What to decide: small adjustments only. Big changes now mean redrawing a finished set.

Who does the estimating

Some architects provide cost estimates or work with a cost estimator. Some leave pricing to builders. If you've brought a builder on early, they can estimate at each phase. See Bid or negotiate? Whoever does it, ask for the estimate broken down by major category, not just a total, so you can see where the money is.

What a milestone check can look like

Phase	Estimate	Budget	Difference
Schematic design	$1,450,000	$1,300,000	+$150,000
Design development, after reducing size and simplifying the roof	$1,330,000	$1,300,000	+$30,000
Construction documents, after window package changes	$1,295,000	$1,300,000	-$5,000

Illustrative numbers. The point is the shape: the big correction happens early, and later checks only need small ones.

Questions worth asking

• Who will estimate the house at the end of each design phase?
• Will each estimate be broken down by major category?
• What assumptions does this estimate make about finishes and systems?
• If this phase comes in over budget, what are the biggest levers we have right now?
• Does our agreement say what happens if the design comes in over the construction budget?