My third mistake: After finally having a direct conversation with the owners, I agreed to prepare a final estimate and contract for them. They reassured me that the retainer check had somehow gotten misdirected and that a new check would be issued posthaste.
Against my better judgment, I priced the project and prepared a contract that was overnighted to the owners’ Long Island, N.Y., home. Several days went by without a word from the potential clients. I telephoned them and left several messages. No response. I call the architect’s office. He was also having difficulty contacting them.
Several weeks had now passed without a word or a check. Then the architect called with sobering news—the owners had been having second thoughts and felt it would be prudent to get two or three other bids. And they wanted to make a number of changes in order to save money. “So, what’s their new target budget?” I asked the architect. “I don’t know, but I think they’re trying to save several hundred thousand dollars based upon the directives we’ve been given for plan changes.”
At this point I had a choice to make: Pull out or continue. My company already had more than 50 man hours invested in this project. I decided to review the list of changes and then make my decision based upon how much additional time would be required to get to a new price.
It turned out that four custom home builders priced out the project—three quotes generated by contractors working through the architect and one bid solicited by, to everyone’s surprise, the owners themselves.
The bid prices were opened simultaneously at the architect’s office, with all parties present. The bids had a $2,312 price variance on a $1.6 million home. Everyone present had a look of astonishment on their faces. How could all the bids be so close? A bid that small is atypical.
We were all told that the owners wanted 48 hours to make a decision. After five days, the architect called again. “The owners have been advised by an outside party that the house is way too expensive for what they’re getting. They’re canceling all bids and want to solicit offers from the builders to see which can build their project for under $1 million.” “Lee, you’ve gotta be kidding,” I said. “They also now are going to proceed with only a cost-plus contractual agreement,” he continued. “Count me out. I should have never invested another minute from the time I hadn’t received my retainer check.”
“Hey Den, that’s not all. They served me with papers saying my firm over designed the house, and they are disputing my fees, of which I’ve only been paid $12,000. They still owe me a considerable amount plus fees for structural engineering and all the support consultants.”
A home for the Savins was eventually built, but it was a totally new design by a different design firm and a different contractor. This situation occurred in 2002 and is still undergoing litigation; in addition there are lawsuits pending on the new design and the new home.
