ᐅ Developer or independent architect

Created on: 16 Oct 2017 15:53
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Hausbau18
Hello everyone,

As I mentioned in another post, we are considering building a house (1.5 floors plus basement; solid construction; plot of land available).

We have already had initial discussions with a local developer. For various reasons, we are unfortunately not really "enthusiastic" about this option (the contact person was very pushy, the supposedly detailed cost breakdown was a bad joke, etc.).

Now, some friends have advised us to build with an independent architect instead of a developer to save costs. The idea is that the architect would also take on construction supervision (including a construction log, etc.) and ideally coordinate the different trades.

Regardless of the approach, we want to contribute some work ourselves!

We have two main concerns. First, we were told that an architect can only provide an overall price estimate, whereas a developer offers a price guarantee (yes, of course, additional costs will arise here and there in both cases). Second, we cannot imagine that an architect who also takes on construction supervision and coordination would actually be cheaper than a developer.

Can you confirm or contradict this information we have? Do you have any general insights on this topic? Managing coordination ourselves would be incredibly difficult due to professional and personal reasons. Should this responsibility be handled by one knowledgeable person rather than multiple people?

Among our friends, everyone has built with developers, so we have no direct comparison.

A “let’s just give it a try” approach is out of the question for us given the sums involved. We also need a concrete figure before approaching the bank.

I hope you can provide some helpful advice here. Maybe there is one or more (former) homebuilders who have already built (or are building) with an independent architect.

Best regards,
Hausbau18
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Nordlys
17 Oct 2017 22:30
stefanc84 schrieb:
Two questions:
- How can an independent architect offer fixed prices? You pay the contractors yourself, not through the architect, right? Then it’s no longer an architect but a general contractor?
- Isn’t the problem with public tenders that the contract is always awarded to the lowest bidder, so companies don’t bother putting in serious offers? I’m not sure if this really applies to the private sector.

Regarding your second question: Because we use limited tenders, meaning the architect and we agree on whom to invite, the lowest bidder must then receive the contract. If we didn’t want a certain company, we simply wouldn’t have invited them. That’s the theory. The reality today is, unfortunately, you have to invite companies you might not value highly just to receive bids.

A frequently mentioned problem with architects, according to contractors talking behind closed doors, is the payment process. Invoices go to the architect, who checks them—this often takes about three weeks—then they go to the client, which takes another 14 days, so five weeks pass before payment is made. If there are any discrepancies, it takes even longer.

Then there are bank guarantees for defects liability retention; they are costly, and you still have outstanding amounts. Many architects are excellent creatives but poor, disorganized construction managers.

It also causes frustration when tender documents are manipulated. For example, a tender might call for supplying, painting, and gluing 240m (787 feet) of plaster trim, but this is never actually executed. Company XY knows this; the boss has good relations with the architect, so they offer a price of 50 cents per meter while others charge 4.30, and suddenly the tennis connection wins as the cheapest, but no plaster trim ever gets installed. Or a tender specifies a heating system from Junkers without allowing alternatives. Suddenly, Meier and Co., who specialize in Junkers, offer the package for 14,600, while Müller Ltd., who only works with Buderus, must submit a Junkers offer at 21,400 because their volume discount does not apply with only two orders per year.

All of this leads to many companies being reluctant to participate in architect-led tenders during times of a booming economy. Karsten
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stefanc84
17 Oct 2017 22:46
Nordlys schrieb:
Regarding your second question. Since we do limited tenders—meaning the architect decides which companies to invite—the lowest bidder must also be awarded the contract. Otherwise, we wouldn’t have invited them in the first place. That’s the theory. In practice nowadays, you often have to invite companies you don’t really value just to get enough offers.

A common complaint about architects, according to contractors speaking confidentially, concerns the payment process. Invoices go to the architect, who reviews them—this often takes three weeks—then they go to the client, another 14 days, so five weeks pass before payment is made. If there are discrepancies, it takes even longer.

Then there are bank guarantees required for defect liability retentions, which cost money while funds remain tied up. Many architects are creative but poor, unorganized construction managers.

It’s also frustrating when tenders are manipulated. For example, a bid might include delivering, painting, and gluing 240 meters (790 feet) of decorative molding, but this is never actually installed. Company XY knows this, their manager plays tennis with the architect, so they offer it at $0.50 per meter, while others charge $4.30. Suddenly, the tennis connection is the cheapest, and no molding ever gets used. Or, a tender specifies "Junkers" heating with no alternatives allowed, so company Meier and Co.—a Junkers specialist—offers the package for $14,600, while Müller GmbH, which only works with Buderus, has to price Junkers at $21,400 because they can’t get volume discounts for just two orders per year.

All this leads to many companies’ reluctance to participate in architect-led tenders, especially during booming economic periods. Karsten
Very interesting insight, thanks! I once listened in at a community council meeting where the architect explained which companies submitted bids for a school renovation and why the decision was made for certain firms. That seemed somewhat questionable to me, and the architect came across as rather aloof and unapproachable. I just thought the process would be somewhat different in the private sector.
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stefanc84
17 Oct 2017 22:56
By the way, I just remembered some negative feedback regarding my experience with the few architects who showed interest. Their creativity was lacking. They hardly ever came up with proposals that suited us. It felt forced, like: “I’ll make you a great suggestion that you definitely wouldn’t have thought of yourself.” And we would think: “Right, that kind of nonsense wouldn’t have occurred to us anyway.”

This means you need to find a good architect who matches your own ideas, not just any architect.