Housing and Community Development

This message has been cross posted to the following Discussion Forums: Residential Knowledge Community and CRAN Custom Residential Architects Network .
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Thanks to all for taking the time for your thoughtful responses and appreciate every point you make. The issue goes beyond us - most savvy clients now shop on the internet and get incredible deals that knock back pricing 20 - 30% from the builder's. And as an architect I regularly obtain wholesale pricing at significant savings. Builders have neither the time or motivation to really shop - only the person paying does.

No contract is signed yet, we're working out a system with the builder where he warranties what he buys and installs, and not the items we purchase. To account for the work receiving, storing, chasing down parts etc.  we're talking about a percentage markup.

And why indeed should the contractor give me a price break? Because this is an exceptional showhome that we're marketing extensively to a specific demographic The house will be professionally styled, photographed, written about and entered in publications to reach these people.  A serous dollar and time investment, the contractor is clearly credited as are all the players.  We're not asking the contractor to pay for any of this, but he is a partner in the venture. We expect to be successful and generate customers for everyone - a positive approach.

No one appreciates the work contractors perform more than I, reflected on our job sites: pleasant, rewarding places to be with repeat subs and suppliers.  We are all facing new realities demanding new approaches, and that's where we'll focus.

Happy Thankgiving -
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Heather Johnston AIA
Principal
Heather Johnston Architect
La Jolla CA
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If this is really such a great opportunity, pick three contractors and have them bid for it.  If they feel the same as you about it, they will give you competitive prices - and maybe even come down in normal pricing at their own prerogative.

But, please don't feel entitled to a "price break".  Let your builder decide if this is a great opportunity.  If they feel the same about the marketing opportunities, perhaps you can ask that they share in the photography and other promotional expenses.


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Edward Shannon AIA
Waterloo IA
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I am still bothered by the "showhome" justification for expecting discounted pricing from the contractor. It would be different if this was a home for a client, and both you and the contractor were choosing to work for a reduced fee as an investment that will pay back because of the marketing potential the project provides.

But, this is your home. You are building your dream home. You have designed it so that it will also be a marketing tool for your practice. Well done. It's a win-win for you. For the contractor, not as much.

You have every right to negotiate the contract, but not in a way that abuses your standing as architect.

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Carol De Tine AIA
Principal
Carriage House Studio Architects, LLC
Portland ME
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I must agree with the "showcase" expectation concern.  Yet, I feel a need to offer a more expanded response.

First, the contractor is free market; yet, you can control the contract unless this particular contractor presents some other commodity you require that another can not deliver.

More importantly, the term of "wholesale" used a couple of times should cause greater concern.  Without a resale license, these products are "to the trade" pricing (different rates or pricing structures for different entities) and not necessarily wholesale.   They are typically sold to the contractor with a "contractor's discount" based on a reseller pricing structure.  Moreover, you as a design professional can sometimes receive similar "not at suggested retail" price breaks.

Therein, my real point, when you control the contract language, you can dictate the terms of the contract to include pricing restrictions and self perform stipulations.  There should be a note of caution here, however to cap profits is not new territory.

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Stephen Dunakoskie AIA
Stephen Dunakoskie, Consulting
Leesburg VA
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Original Message:
Sent: 11-29-2011 10:56
From: Carol De Tine
Subject: Architect's Own Home/Contractor Pricing

I am still bothered by the "showhome" justification for expecting discounted pricing from the contractor. It would be different if this was a home for a client, and both you and the contractor were choosing to work for a reduced fee as an investment that will pay back because of the marketing potential the project provides.

But, this is your home. You are building your dream home. You have designed it so that it will also be a marketing tool for your practice. Well done. It's a win-win for you. For the contractor, not as much.

You have every right to negotiate the contract, but not in a way that abuses your standing as architect.

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Carol De Tine AIA
Principal
Carriage House Studio Architects, LLC
Portland ME
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