do architects generally dislike renovations using construction loans?

[Anonymous]

The first architect that I spoke with on the phone today appeared less interested once I told him we will be doing the project using construction loan? Can someone explain why? delays rather than stroking one big check?

[Anonymous]

Not an Architect - GC. I do pretty high end work. In general my projects seem to run smoother when people have cash vs. having to borrow the funds. They don't seem as stressed, every change order isn't a major battle. Life is just easier.

[Anonymous]

You should not write one big check under any circumstances.

Using a construction loan adds a degree of difficulty and generally you cannot use the loan to pay for architects' services, since you need the plans to have the home appraised and you likely want to be pretty close to filing for permits when you start the lock on the loan.

We used construction financing and a design/build firm. I thought the financing helped establish a reasonable draw schedule. There were pluses and minuses but on the whole it worked well for us.

[Anonymous]

I think some GCs and Architects don't like it because a construction loan enforces additional checks and balances, especially if buffers are slim for the contractors. Our contractor originally wanted multiple draws a month, for example-- the bank will do one. The subs may not be familiar with doing mechanics lien releases (or partial releases). The bank will not accept a bill with "materials, miscellaneous"-- they want to know what was ordered, how much is a deposit, what materials they should see on site, exactly what labor was performed. And then they also send someone out to inspect before issuing the check.

I am sure that the GC would have been happier if we had just gotten a line of credit and paid for the build on their terms. Our architect didn't care.

[Anonymous]

We used the loan for design and build.

We just paid the architect ahead of the first draw

[Anonymous]

Who cares what the architect thinks?

[Anonymous]

We did design/build on a $1mln renovation. ABout $700k was a construction loan. The lender and buildre worked to establish a draw schedule, then for each draw the lender paid 70% and we paid 30%. The firm we used was big enough where any lender paperwork was done by the accounting people, so I doubt the architect cared at all since it didn't affect them.

I also hired an independent inspector to come in every 2-3 weeks to look things over. That was worth every penny. The lender's people are just appraisers who look to make sure the draw milestone is met, like "foundation complete", but my inspector was the one who pointed out little details like a missing step footing, and another deviation from the drawings.

Same with smaller draws like one for flooring installed. The lender's appraiser just looks to see the floor is in there. Our inspector checked alignment, how it was fastened, baseboard molding, etc.

[Anonymous]

Architect here. Does not matter one bit to me. I am selective, though...but for pleasant to work with people. Maybe you sounded undesirable to work with for some other reason.

[Anonymous]

Anonymous wrote:You should not write one big check under any circumstances.

Using a construction loan adds a degree of difficulty and generally you cannot use the loan to pay for architects' services, since you need the plans to have the home appraised and you likely want to be pretty close to filing for permits when you start the lock on the loan.

We used construction financing and a design/build firm. I thought the financing helped establish a reasonable draw schedule. There were pluses and minuses but on the whole it worked well for us.

THIS IS great advice. We did the same.

[Anonymous]

Anonymous wrote:Not an Architect - GC. I do pretty high end work. In general my projects seem to run smoother when people have cash vs. having to borrow the funds. They don't seem as stressed, every change order isn't a major battle. Life is just easier.

That is why everyone competes for the $$$$ clients.... once you are there it is a different scenario.

[Anonymous]

The architect gets paid close to 75% before you take an initial draw, so no. But, it might put you in a class of customers they don't need.

When we renovated we interviewed 5 architects...one was a super high end guy who wouldn't come to our home, made us come to his office where he lectured us on how we couldn't change anything once he drew it, etc.

The woman who came to our home and showed us how she designed her home for 4 kids won our business despite charging a bit more.

[Anonymous]

The construction loan protects you and that is why builders don't like them because they won't give out the money until the work they billed for is done and they have inspectors come out to the job to make sure it is done. If you have the cash, still go with the construction loan and pay it off when the work is done.

We did that and our job was seamless, on budget and on time, a friend used same builder without a construction loan and it was your typical nightmare renovation.

[Anonymous]

Most homeowners have enormously inflated ideas of what they can do, thanks to HGTV. An architect generally can't just scale back, the whole design has to be done over. No one wants to pay for two or three redesigns. My husband only works with established builders who will be up front about what the homeowners can really afford. They meet with the homeowners together from the start.

[Anonymous]

Anonymous wrote:Who cares what the architect thinks?

The bank cares. Skipping an architect is step one toward project failure and default. Don't even think about it.