042_2026_04_07_Mailbag 1_Audio(1)

0:00

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

emotionally. So one of the things that we start with in my practice is after we sit down and find

0:07

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

out what they're really missing, what they're really wanting, we oftentimes will do what we

0:13

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

call a master plan, which is not 100% figuring out absolutely everything, but it's finding out

0:22

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

what's possible. It's finding out just design iterations of how can we solve this problem

0:30

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

in your current house. And then after we get through the master plan, we have something to

0:39

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

base some kind of price on because coming in and saying, well, this house doesn't really work.

0:44

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

I can't say, well, if you invest $500,000, it's going to be awesome until we design it and find

0:51

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

out what awesome really is. And can we do it on your lot? And what are the constraints and the

0:56

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

setbacks and all of the rules? So a lot of times we'll start with a master plan. So we do that,

1:03

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

we get through some money conversations, and then I think they would have enough information

1:11

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

to at least make that decision. Do we renovate, add on, or move?

1:16

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

Yeah. And as you've said before, that's an investment. In order to have information that's

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S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

that good to make a multiple hundreds of thousands or even million dollar decision,

1:29

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

it's worth spending a few thousand. And this is what I'm constantly, people are very short-sighted

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S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

about this and they're like, well, can't you just do it for free? Or I don't want to spend any money.

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S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

And I'm like, you're about to spend a ton of money. You're making one of the biggest decisions,

1:45

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

financial decisions that people make, which is about their house. And whether to buy new or

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S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

renovate or whatever, it might take you a few dollars. It's worth that investment to know that

1:57

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

you're making the right decision. I would also say that the renovation part, so I want to underline

2:04

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

what you said, renovation dollar for dollar is more expensive. But you could also spend fewer

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S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

dollars overall than a new build, right? So we got to figure that out. I think the other part of this

2:18

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

is resale value. So if you're renovating, if you're putting a bunch of money into a house,

2:24

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

you want to be sure, you want to understand what your time horizon is. So if this house is the house

2:32

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

that you're going to be in for the next five or six years, then you want to be a little bit more

2:37

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

conservative about how much money you're putting into it because you don't have a lot of time to

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S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

sort of recoup that or, you know, whatever. If this is your forever home and you're going to be in

2:48

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

here for 20 to 30 years, you have a lot more freedom to spend a lot more money. Yeah. If anyone

2:55

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

tells you that they think they know exactly what the value of your house is going to be in 20 or 30

3:00

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

years, we don't know what's going to be happening in 20 or 30 years. But we can look back and say

3:05

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

over time, consistently, real estate and home prices have values have appreciated. So we can

3:12

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

use that and we can say, there's no crystal ball, there's no guarantees. But if you're in a good

3:18

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

neighborhood in a good city or a good town or whatever that holds its value, it's probably going

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S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

to continue to hold its value. And that honestly is the conversation that I have with my Boston clients

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S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

all the time. So people do things like buy a million dollar house and put a million and a half

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S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

dollars into it, which on paper, you're just like, that's insane. But these are neighborhoods that are

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S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

extremely stable. They don't go down in value. They often recoup that in appreciation in just in way less

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S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

time than the 20 or 30 year time horizon. They often wish they would have done more because resale value

4:00

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

isn't about what you're going to sell it for tomorrow if you're holding on to it for 20 or 30

4:06

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

years. Yeah, if you're holding on to it. But there is a limit, right, in most neighborhoods. I mean,

4:12

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

the Boston example, but you can overbuild for your neighborhood. Yes, you can. You know, if you live in

4:20

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

a Ohio suburb, for example, you certainly can overbuild and price yourself out of the neighborhood and you

4:28

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

would never get it back. However, it just depends how you want to spend your money, because if you

4:34

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

are staying there, if you're and and we could use Taylor in this conversation about aging in place,

4:40

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

if you are if you're renovating this house to live there forever and age in place and it is your last

4:46

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

home, then do you really care? Right. Right. Like you want what you want for the end, the last third of

4:54

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

your life. And maybe it doesn't matter. So there are just so many things.

5:00

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

that come into this stage of life where you want to be where you want your kids to be if you have

5:08

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

kids school systems gosh there's just so much that goes into location location location right

5:15

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

and that's the thing that can't change it doesn't matter how awesome your house is if it's in a

5:20

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

location that you don't like or it's in a location that doesn't support the lifestyle you want with

5:25

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

the schools that you want or being close to your friends or or you know the cool downtown area that

5:32

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

you want to be close to or not because you want to be in the burbs or whatever like whatever your

5:37

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

preferred lifestyle is you have to choose the location based on that and then the house comes

5:41

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

after that generally but you know I think what I also want to say here is that this person is asking

5:48

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

about financially I'm not sure what makes sense and you know we are talking about financial things

5:54

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

here as architects we are not financial planners we're not advisors in that way but we see a lot

6:04

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

behind the scenes about how projects get financed how people pay for projects how people make these

6:12

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

difficult financial decisions and I think that so when I'm talking to my clients about that that's

6:17

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

kind of what I say is well look I'm not I'm not your financial planner I'm not your money person who

6:24

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

knows all the ins and outs of your finances but what I can say are these are the advantages and

6:30

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

the disadvantages or these that I see from my seat or this is what I've seen other homeowners do

6:37

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

in the decisions that they've made but ultimately I think there's also something kind of controversial

6:42

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

tied up in this which is that people see their home which is a personal thing as a financial

6:50

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

investment and so you have the you will always have this tension between and this person is saying

6:56

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

it emotionally we want to stay yeah but financially we don't know and so it's very hard when you look

7:02

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

at your primary residence as an investment vehicle then you're taking something super emotional

7:09

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

your primary residence and you're turning it into something that should be strictly data driven

7:15

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

your financial health and your financial picture your investments and I think that that tension

7:24

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

is really hard to resolve and I think understanding what that means as a couple or a family as you're

7:33

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

trying to make those decisions yeah and you have to look at it in your overall picture but if your home

7:39

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

is if you're seeing it as strictly a financial investment I think you're missing out on what

7:45

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

the purpose of a home is and at the same time if you just make emotional decisions you could get into

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S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

trouble financially so I think you have to look at both things and the answer will not be the same

7:58

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

for everyone yeah which brings me back to what we always say which is bring us in early and we'll talk

8:04

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

you through it we don't care right like right I don't mean we don't care like who cares what I mean

8:11

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

is we're not attached to one solution or another what we want is to help you find what works best for

8:19

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

you yeah that's what I mean and I think there can be a process to it and I think that if you talk to

8:24

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

the right professional they can walk you through that process right like what is your budget do you have

8:30

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

have you figured all of the numbers out like if you want to know what makes sense financially you

8:35

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

need to know your financials so what would your budget be for renovation or addition what would

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S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

your budget be for a brand new house because you may say I have five hundred thousand dollars to

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S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

renovate this house because I have equity in it and we can do this and that but it may be a different

8:55

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

financial picture to build a new house because of equity and what the neighborhood can hold and

9:01

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

what you could sell it for versus holding it there's just so you need to know your own budget

9:06

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

yes before we can help you probably for both instances and then you need to find out what's

9:14

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

possible what's possible for your home for your actual home not necessarily designing the whole thing

9:22

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

but what are the setbacks what are the rules what's your HOA say zoning everything and if you want to

9:29

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

build new is there land available where you want to be if you have kids in certain school district

9:34

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

there may not be land available we we have that problem around here like there's not enough developed

9:39

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

land for people that want to do custom homes so there is a process that you can move through

9:45

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

we have no idea you know to tell this person that there's no clear cut like it's always better to

9:54

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

build new you know don't renovate I would never say that it's it all depends

10:00

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

obviously. It all depends. And I think that's why having someone to usher you through those

10:07

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

conversations. And in this situation, it's going to be several people. It's going to be sitting

10:11

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

down with your financial planner, whoever, your advisor, you know, if you have that person. And

10:17

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

if you don't, maybe it's a good opportunity to, you know, maybe if you have an accountant, maybe

10:22

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

they can recommend someone or, you know, have those conversations with someone who's looking

10:28

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

at your unique situation. So you can Google this and ask AI all you want, but those methods are not

10:36

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

going to give you specific information to your specific situation, or at least as specific as a

10:41

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

person who's kind of thinking through it with you. So I think, as usual, it's about having those

10:47

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

conversations with someone who can actually tell you things. And some of the things that you just

10:52

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

brought up, like zoning or, you know, what's possible on your lot or is there land available,

10:57

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

can mean that you can cross things off the list right away. And you can say, well, actually,

11:04

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

according to our goals and according to the reality of the situation, we actually can't

11:10

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

renovate this house because of a bunch of zoning rules or we're in a historic district. And so we

11:16

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

couldn't do what we wanted to do anyway, or whatever the case may be. Isn't it great to find out for a

11:23

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

small investment up front? It's just not an option on the table.

11:28

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

Right. It actually is a black and white answer sometimes.

11:31

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

Get to know faster.

11:33

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

Yes. Yes. Get to know fast. Yep. Okay. You want to do one last question?

11:39

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

Yeah. Let's do one more.

11:40

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

Okay. This question is, how much contingency do we need? So more of a kind of nuts and bolts

11:50

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

numbers game. We are the kind of people who like to plan everything and the idea of surprise costs

11:57

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

makes me nervous. Good that it should make you nervous. That's good. Yeah. We're considering a

12:04

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

whole house renovation on an older home and everyone keeps telling us to have a contingency,

12:09

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

but no one says the same number. How much extra should we really have set aside and what kinds of

12:16

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

things usually eat into that contingency?

12:20

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

Well, I feel like we should start by defining what contingency is. So this person actually

12:24

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

already knows a construction vocab word, contingency. So I think probably most people understand,

12:33

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

but just to define it, it's, I call it the oh crap money, although I usually use a different word,

12:39

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

but we're a family podcast. So it's the oh crap fund. So when something happens that was unplanned

12:48

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

or that is a surprise, you need to have a bucket of money that you can pull from so that you don't

12:55

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

have to stop the project or you don't have to change the project and delete parts of the project

13:00

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

so that you can afford whatever. So that's a contingency. So how much should it be? This is a good

13:05

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

question. Go ahead. I give a specific number so I can answer this pretty quickly. Go ahead.

13:12

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

We do a lot of renovations on really old homes and I say set aside 25 to 30 percent the construction

13:17

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

budget. That's higher than we say on new builds, but of course that makes sense. Yeah. There's so

13:22

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

many unknowns. Yeah. So the reason I say that is because on old homes, I've just, I've seen it before

13:29

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

a million times, you know, we'll start getting into it. We have a, we have a great builder.

13:34

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

Obviously we have a great architect, right? We have a solid, you know, cost estimate, solid contract.

13:41

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

Everybody's on board. Let's go. During demo, we uncover a whole bunch of things and the wholesale

13:49

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

plates rotted out. We have to jack up the house. Well, that's 15 grand or whatever. Oh, we found,

13:55

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

you know, this behind the walls or that behind the walls. The good news is that if you have a

14:01

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

contingency set aside, you can weather those things very easily. The other part of it is that

14:09

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

your need for contingency goes down over the course of the project. So the scariest moment,

14:16

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

the moment of most unknown is demo. That's when you uncover everything in a renovation.

14:22

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

And it's at that point that you should be able to nail down most of the unknowns because now you can

14:29

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

see everything. So that's why we say such a high number because on old homes, there are, I mean,

14:35

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

we've had some major scary things that have been uncovered, but never a client who had to stop the

14:42

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

project or something like that because we, because they, everybody planned ahead. Great. It goes into

14:49

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

the furniture budget or it goes back into savings or whatever, but rather have money left over at the

14:55

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

end than have an issue like a rotted sill plate.

15:00

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

that's holding up the whole house that you can't replace because you didn't set aside some

15:03

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

contingency. Yeah, ours is much lower, 10 to 15, 15 to 20, I would say. For a new build, that makes

15:10

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

sense. I do want to say it can, it all depends on your bank, but it can be in your loan. You do not

15:19

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

have to have that pot of money in your savings account. Like that's, you know, it can be in

15:26

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

your loan. It's just a part of the calculation of the cost of construction. And sometimes banks will

15:33

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

require that. So depending on your financing or whatever, the banks will either require that you

15:38

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

have X amount of cash or that you are approved to have a loan that can cover that contingency.

15:46

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

The bank also doesn't want you running out of money. Correct. That is right. So the bank is also

15:53

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

very interested in making sure that you can complete this project in a way that leaves you

15:58

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

financially solvent. Yeah. Right. Yeah. The other thing about contingency is that there are a lot of

16:06

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

things that you can do to, to lessen your risk of unknowns. So you should do all of those things.

16:15

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

You should, you know, in, in my instance, you know, we always recommend to do soil samples because

16:23

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

sometimes it is literally just having your builder go out there and dig a hole and look at it. Like,

16:28

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

what does it look like? Is it virgin soil? Are, does it fill up with water in 20 minutes? Like

16:34

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

there are things that, simple things that you can do. Of course you can do geotech testing and all of

16:40

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

that, which we also recommend in certain instances, but most of our things can be known except for the

16:47

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

ground. But there are always, there are still things that come up during construction that are

16:54

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

unforeseen and, and, or errors and omissions, which we can get into some other time. Another topic. Yep.

17:02

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

There, there, there, there are things that come up that, that need to be paid for and it's not fun

17:09

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

money. It's not, oh, the thing that came up is I want this better tile in my kitchen. Right. It,

17:17

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

we're really talking about a construction contingency. Absolutely. Yeah. It's, it's, it's not,

17:23

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

it could become fun money towards the end. Right. When all of the potential surprises are uncovered

17:32

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

and we know that there's nothing else coming down the pike, but it is not beginning. It's not fun

17:38

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

money. Yeah. Um, we have also, I've done this with a couple of clients. Most people are a little too

17:45

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

nervous to do this, this way, but we've done it a couple of times where we will design most of the

17:53

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

project and then we get a price, we get a builder on board. So we know where we stand, but we don't

17:59

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

finish the drawings until we do demo. Oh, interesting. So we actually, yeah. So we'll

18:06

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

pull a demo permit. The contractor pulls a demo permit and this is for gut renovations. This is

18:10

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

for when we're gutting the whole house down to the studs inside and out. So then they'll gut it and then

18:18

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

we finish the drawings because then, because the famous line is we can't see through walls. We don't

18:24

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

know the answer until we demo. Well, demo happens on day one. So we actually say, well, let's wait to

18:31

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

finish the drawings because now if we finish the drawings after demo, we have all the answers.

18:38

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

So we already know that we can't put the toilet there where we originally thought. So we then

18:44

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

will take that time after demo, map out everything, make sure everything works. And then the drawings

18:50

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

reflect actual conditions instead of our inability to see through walls. So there's a little bit of

18:58

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

risk there and that the risk is that you have a demoed house and we find something crazy, but that

19:03

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

was a risk that was already going to happen. Right. Exactly. Yeah. Yeah. You're really mitigating a lot of

19:09

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

that. Yeah. And I think people get nervous about doing the demo before the design is completed.

19:16

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

But you would have an idea. Yeah. Oh, we're very far down the road.

19:20

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

And then at that point, too, we know the real costs. So then we can pull other cost levers and

19:25

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

say, you know what, because we've done the demo, because we see what we're dealing with,

19:29

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

the project is going to be seventy five thousand dollars higher than we originally thought because

19:35

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

of all these other issues. Well, now we can mitigate that by saying, OK, let's pick the less expensive

19:40

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

tile. Let's dial back on finishing the whole basement and just get it basically ready. You can finish it

19:46

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

later and we can pull that seventy five K back out of other things and it won't feel like a scramble.

19:53

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

It will feel like a clear, calm, you know, maybe not what we wanted.

20:00

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

because we wanted all that stuff, but we can do it in a calm manner, not like in the heat of battle

20:06

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

during construction while everything's flying around. So we've done that a few times. I recommend

20:11

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

it highly if you've got a good team and if you're up for, it's a little bit more of a

20:17

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

nontraditional approach, but I think it saves money. Interesting. I like that a lot. I can see

20:23

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

where it lowers that fear, right? It lowers some of the anxiety and it lowers the disappointment

20:32

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

where if you design it all and you fall in love with exactly the design that you have,

20:39

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

and then you open up the walls and you can't do what you wanted, regardless of how much it costs

20:45

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

with the contingency, but there's an emotional cost to that too, to plan on that and then not

20:53

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

get exactly what you were expecting and wanting. Another thing about expectations is expect to

20:59

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

spend that money. Don't have a contingency thinking we'll only spend it if there's a mistake or if

21:07

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

there's something that goes wrong. Just plan on spending it. It's part of the construction cost.

21:13

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

It's probably, you know, it's going to happen. And then if it doesn't, yay, we can celebrate that and

21:19

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

spend it somewhere else. But it really should be treated as a construction cost.

21:24

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

I agree. I think having that understanding up front means that it's the same thing about,

21:31

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

what do they say, under promising and over delivering. So if you say this project's

21:36

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

going to cost a hundred grand and it costs 90, everyone's thrilled. If you say it's going to cost

21:42

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

75 and it costs 90, everyone's upset. So let's just have that contingency in place. That gives us

21:48

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

that little bit of cushion. We're going to come in under that as, as we're going to work as hard

21:52

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

as we can to come in under that. But we also need to fix things like the sill plate rotted out under

21:57

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

the house. To get back to the question, how much should we set aside? So, you know, we've heard on

22:04

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

new builds, it can be less because there's fewer unknowns. And especially if you do soil testing and

22:08

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

stuff like that, which I fully agree with. And on a renovation, you want to set aside more because

22:14

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

there's more unknowns and it's older and there's weird things that happen. And then what kinds of

22:19

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

things usually eat into that contingency? I think, you know, we've, we've talked through that, you

22:24

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

know, it's, it's the unknowns. It's usually the unsexy things like high water table or, you know,

22:32

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

foundation stuff or structural things or things like that, that are not super fun. So yeah, it's better

22:41

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

to have something saved up to take care of that. So, so that it doesn't ruin your whole financial

22:47

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

picture. Right. Well, that was a downer to end on. No, it's about good planning. Yes, it is about

22:56

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

good planning. Yeah. This person saying that they like to plan everything and the idea of surprise

23:00

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

costs makes me nervous. Well, it makes us nervous too. So here's a way that you can handle that and

23:07

S… Speaker 1 (042_2026_04_07_Mailbag 1_Audio(1))

it's easy peasy, no stress. So how's that? Is that better? That's better. Thank you. I feel better.

23:16

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

All right. Thanks for joining us on Home, the Second Story. If you'd like to come on the show

23:21

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

and share your story, email us at admin at htsspodcast.com. We'd love to have you as a guest.

23:28

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

Also, if you have questions you'd like to ask us in a mailbag episode, please send them along.

23:32

S… Speaker 2 (042_2026_04_07_Mailbag 1_Audio(1))

Be sure to rate and subscribe wherever you get podcasts and follow us on Instagram. We'll see

23:38

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you next time. Thanks for listening to Home, the Second Story podcast. Feel free to share this

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episode with a friend. Contact information for both of our architects are in our show notes.

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And don't miss future episodes. Follow or subscribe to our show for free in Apple Podcasts, Spotify,

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042_2026_04_07_Mailbag 1_Audio(1)

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