What Value Engineering a Home Really Saves (and What It Doesn't)

When the water problems at the Cultured Cottage turned our renovation into new construction, we lost the one thing that made a budget feel safe: knowing exactly what we were building. Before we broke ground, everything was specified. We knew the cladding, the interiors, and what every piece cost, because we knew what every piece was. Once we had a new house, we didn't know what it cost because we didn't know what it was yet. This was what value engineering a home looked like when we were still figuring out what the home was, and it changed how every decision got made.

Why We Couldn't Stop and Redesign

Time was our biggest constraint, and on a development, time is money. We couldn't pause the project to redesign the house from scratch, so we were designing and building at the same time. That kept the schedule moving, but it put pressure on the budget, because construction was moving faster than design.

The first hurdle was the permit. We were no longer renovating and adding on, so we had to go back to the village and negotiate a revision to our existing permit. The goal was to avoid submitting for an entirely new permit, which could have cost us 12 weeks or more. Even with a revision, our permit was set to expire one year after issuance, and renewing it could have cost us $20k. On a budget like ours, that was a big number, and it meant we didn't get the luxury of sitting back and regrouping.

So we designed in phases, and construction decided the order. Whatever got built next was what got designed next. I would have loved to get ahead of construction at some point during that year, but we weren't there yet.

How Window Lead Times for New Construction Set Our Design Schedule

After foundations came framing, which meant the exterior sheathing, the structure, the roof, and the windows all had to be specified first. Within that list, lead times decided what went to the top. On this project, our longest waits were the structural engineer and the windows, so that's where the design work started.

Window lead times for new construction could run anywhere from 8 to 20 weeks, depending on what was being ordered. We were ordering big windows, because good architecture required great natural light, and there was no amount of money you could put into artificial lighting that could overcome poor architecture. Big windows narrowed our options down to a handful.

The window also had to play nice in the sandbox. We had a lot of different materials going into this house, inside and out, so we needed a window that was easy to install, worked with the exterior wall assembly, and still looked cohesive with what we were doing on the inside.

For us, the answer was Andersen E-Series. I liked their people, and when a project got tough, I needed vendors who got going. Their reps were technically knowledgeable, they could work directly with our architect on the specifications, and when we had questions, they answered quickly. The windows could be custom sizes and large format, which our design required. They also worked with a range of exterior wall assemblies, which mattered because we hadn't settled ours yet. It could have been 2x6 framing with plywood sheathing, a rain screen, and masonry, or ZIP sheathing with cladding, or some mix of the two. Whatever we landed on, we could install those windows properly. We could pick an exterior color then and use primed interiors, so they would work with whatever interior moldings we chose later.

If our whole premise was that a well-built home earned a higher price per square foot, we had to put our money where our mouth was. You couldn't sell a multimillion-dollar home with builder-grade windows in it.

Value Engineering this Home Started With What Couldn't Move

Before we cut anything, we needed to know which dimensions the house couldn't lose. We called those critical dimensions. They were the measurements that gave a finished home its symmetry and that custom feeling, and when the structure changed, they were the first thing at risk.

All of our structure changed with the new house. That meant new decisions about bearing walls, and bearing walls dictated where the HVAC ducts and plumbing piping ran, along with anything else that traveled up, down, or across the house. The lot didn't change, though. It was still narrow and rectangular, and we didn't have feet or even inches to spare in any direction.

The foyer was where this mattered most: It was the first thing one saw when walking inside, and the staircase was its centerpiece. Each tread needed to be three feet wide, and the finished hallway needed to be three feet wide too. Three, three, three. Every structural decision had to protect those dimensions.

Cutting Something Rarely Cuts the Whole Cost

This is the part of value engineering that catches a lot of people off guard. When you take something out, you will rarely take out 100% of its cost. Something usually has to go back in, and what goes back still has to carry its weight in the design.

Our foyer was supposed to have a contemporary floating staircase. It was beautiful, and it was more expensive than a standard staircase, so it was cut. We still needed a staircase, though. A standard staircase with closed treads and risers cost less, but it still had to be the centerpiece of the home, so we added an architectural handrail to give it visual interest, bring your eyes up and around, and keep that luxury feel. The savings were compromised, still the closed staircase cost less than the floating staircase.

The primary bedroom was the same story. We had planned a custom millwork closet along one wall. New construction afforded us new conditions, rather than working with existing conditions. We capitalized on that fact by re-dimensioning the space, making the walk-in closet larger, and giving the bedroom more room for a bed and nightstands. Some of that money was going right back into the walk-in, so again, the savings were only ever partial.

The fireplaces showed us where to hold the line. We had one inside and one outside. The exterior fireplace got voted off the island. The interior one stayed, because it added warmth and dimension to the living room. With the structure still changing around it, we worked through its size, specification, and flue, keeping our fingers crossed that it would make it to the end.

Good Intentions Get Expensive Fast

When a house flip went over budget, the instinct was to cut, cut, cut and push the price as low as it would go. We didn't do that because we were already over $2M invested. The house needed to sell for over $2M. The market set some of the bar for a house at that price, and we set some of it too.

We started at an aggressive $1.78 million all-in for a renovation+addition. From there, we knocked down the house, regraded the entire lot, installed an entirely new drainage system, and paid for site utility work, foundations & footings, and rough framing on a brand new house. Within a few short months, we had reached $2.05M.

I went to our bank, told them we had big problems and were hundreds of thousands over budget, and we worked out a flexible plan to cover the overages then and revisit once the design was final. That conversation only went well because of the relationship, and I cannot say enough about how much every person on your team matters on a development project.

I believed good architecture and good design could earn a higher price per square foot, so I wasn't going to panic or cut our losses. We were going to dig in and work harder, because, you know what, no one cared how hard that build was for us, right?

You can watch Episode 3 of the Cultured Cottage Series on YouTube to see how we worked through the redesign. If you're just joining us, start from the beginning to see how a small renovation became a new house.

Frequently Asked Questions

What does value engineering a home mean?

It meant finding ways to lower the cost of a house while protecting what made it work. On our project, that meant replacing a floating staircase with a standard one, adding a handrail to keep the foyer special, and cutting the exterior fireplace while keeping the interior one.

Does value engineering always save as much as expected?

Rarely. When you remove something, you usually have to put something back in its place, so you were not saving the full cost. For example, you can downgrade the flooring, but you still need to install floors. Our floating staircase was omitted, but we still needed a staircase to replace it, and with a handrail good enough to anchor the design.

How long are window lead times for new construction?

On our project, window lead times ran anywhere from 8 to 20 weeks, depending on the order. Large or custom windows tended to narrow our options, so the window package had to be specified early. We put windows at the front of our design schedule, alongside the structural engineer, because they were critical path to framing.

What happens when designing and building a house at the same time?

The schedule moves faster, but the budget becomes harder to control. You end up designing in phases based on what’s getting built next and prioritizing items with the longest lead times. You also have to make decisions before knowing exactly what everything will cost. It’s not for the faint of heart.

What should be done when a development build goes over budget?

Looking at what the house has to be worth before starting to cut is key. We were already over $2M invested, so cutting everything would have left us with a house that couldn't sell for what we needed. We talked to our bank early, protected the features buyers would notice, and cut where it wouldn't hurt the house. Make no mistake, it’s a painful process.