What Happens During the Design Agreement Phase

A custom home design contract should read like a project management tool, not a defensive legal document. It should tell you what the designer will deliver, when, at what fixed price, how many revisions you get, who owns the drawings, and what happens if you decide to build with someone else. This guide walks through every clause we include in our SwagerBuilds design agreements and why it matters.

For an overview of the design services themselves, see our custom home design services page. To go deeper on plan development, see custom house plans for Teton Valley and Eastern Idaho.

What Should Be in Your Custom Home Design Contract

A solid residential design contract answers ten questions in writing:

1. Scope of work — exactly which deliverables the fee covers.
2. Fixed fee, milestone payments, and payment terms.
3. Number of revisions included and hourly rate for anything beyond.
4. Ownership and license of the drawings.
5. Design-to-build credit terms (if applicable).
6. Termination clause — how either party exits and what happens to the drawings.
7. Timeline expectations and owner sign-off requirements.
8. Who submits and shepherds the permit.
9. Cost transparency commitments (allowances, subs, change orders).
10. Insurance, licensing, and indemnity language.

If any of these are missing from a proposed contract, ask why. Vague scope is where fee creep starts.

Milestone Payment Structure

SwagerBuilds design fees are invoiced against delivered milestones — not hourly, not front-loaded. A typical milestone schedule for a design agreement:

• 15% at contract signing — kickoff, site walk, project setup.
• 25% at Schematic Design signoff — plans selected, direction locked.
• 30% at Design Development signoff — locked plan and elevations.
• 25% at Construction Documents delivery — permit-ready set complete.
• 5% at permit submittal — application filed with jurisdiction.

Milestones tie payment to a deliverable the owner has in hand. If a phase is not accepted, the next milestone does not invoice.

What’s Included vs Excluded

Every design contract should list inclusions and exclusions explicitly. Ours:

• Included: All design phases (SD, DD, CDs), interior selection guidance, structural coordination, energy compliance path, permit application preparation and submittal, four revision rounds.
• Excluded (billed separately): Land survey, soils/geotechnical report, septic design, well siting, environmental studies, HOA architectural review fees, 3D rendering beyond standard elevations, interior decorating (soft goods, furniture).

Exclusions are billed at pass-through cost with no markup. If a soils report reveals expansive clay, the additional engineering coordination becomes a change order — disclosed and approved in writing before work starts.

A word on why exclusions are usually pass-through rather than bundled: land surveys, geotechnical reports, and septic designs are done by licensed third-party firms whose fees are set by the parcel, not by us. A boundary and topo survey on a five-acre Teton Valley parcel typically runs $1,800–$3,200; a geotechnical report with two borings runs $2,500–$4,500; an engineered septic design where a conventional system will not perc runs $2,000–$5,000. Marking those up would inflate the design fee without adding value; passing them through keeps the numbers honest and gives the owner a clean paper trail.

Revisions Policy — How Many Rounds

Our standard is four revision rounds — allocated across schematic, DD, and CD phases. This is more than sufficient for a well-run project because milestone sign-offs prevent scope from bleeding backward.

Contracts that promise “unlimited revisions” are a red flag: either the fee is inflated to absorb rework, or the designer will slow-walk changes to avoid working for free. A defined revision policy protects both sides.

Additional rounds beyond four are billed at $125–$165 per hour, tracked and reported. Owner-requested changes after CDs are considered change orders and priced individually.

Drawing Ownership and License Rights

Drawing ownership is where many design contracts trap the owner. Two questions matter:

• Who owns the copyright to the design?
• What use rights does the client have if the project stops or the client changes builders?

The SwagerBuilds standard: we retain copyright to the design work, and the client receives a paid-up license to build the home one time on the identified lot. That mirrors the licensing convention used by most residential design firms and the framework recognized in the Idaho Board of Architects licensing rules at Idaho DOPL.

If a client wants to build the same plan on a second lot, or license it to a third party, that is a separate agreement priced separately. It is not automatic and it is not free — but it is available.

The Design-to-Build Credit Clause

When clients continue with SwagerBuilds for construction, 100% of design fees paid credit against the first construction draw. The clause reads roughly:

“Provided Owner enters into a construction agreement with Contractor for the Project within twelve (12) months of Construction Documents delivery, the total Design Fees paid hereunder shall be credited against the first invoice under the construction agreement.”

A twelve-month window is important. Without a defined trigger, the credit becomes a floating promise the owner cannot enforce. With one, both sides know exactly when it applies.

A common owner question is what happens if construction pricing comes back higher than the design phase target range. The contract does not force the owner into a build they cannot afford. If GMP exceeds the range disclosed at design development sign-off by more than a defined threshold, the owner may value-engineer the design, extend the twelve-month window by written amendment, or exit and retain the drawings under the single-lot license — with fees paid staying paid but no additional design fee owed. That symmetry is why the credit clause is worth reading twice before signing.

Common Pitfalls to Watch For

Contract clauses we have seen cause problems on non-SwagerBuilds jobs (based on 20 years of Idaho GC experience):

• Hourly billing with no cap. Fees balloon and the owner has no leverage to stop them.
• Vague scope like “design services as needed.” Every request becomes an argument about whether it was included.
• No revision limit. Combined with hourly billing, this is the classic runaway budget.
• Ownership clauses that require re-licensing to build. Some designers retain full ownership and force the owner back to them for any changes.
• No permit responsibility named. Owner ends up shepherding the permit personally.
• Termination clauses that keep all fees paid but return no drawings. Owner walks away with nothing.
• Missing licensing/insurance disclosure. Idaho contractors and designers should verify at Idaho Division of Building Safety.

Design Phase Timeline (Kickoff to Permit Submittal)

Typical 14–16 week schedule with an engaged owner:

• Weeks 1–2: Contract signing, site walk, program interview.
• Weeks 3–6: Schematic design, owner review, sign-off.
• Weeks 6–10: Design development, engineering coordination begins.
• Weeks 10–14: Construction documents, energy compliance, structural stamping.
• Weeks 14–16: Permit submittal and jurisdiction intake.

Permit Handling — Who Submits and Shepherds

Our design contract makes SwagerBuilds responsible for preparing the permit package, submitting it to the jurisdiction, and shepherding it through plan review — responding to reviewer comments, resubmitting as needed, and closing out approval.

Jurisdictions we submit to routinely:

• City of Driggs Building Department.
• City of Victor and City of Tetonia.
• Teton County Idaho for unincorporated builds.
• Bonneville, Jefferson, and Madison counties for Eastern Idaho projects.

Permit fees themselves are pass-through to the owner. Impact fees, if applicable, are disclosed at CD delivery so there are no surprises at pickup.

Cost Transparency Expectations

The design contract sets the tone for how the whole project handles money. Our expectation on cost transparency:

• All allowances disclosed and defended with a scope of work.
• Subcontractor bids visible to the owner in the project portal.
• Change orders priced, dated, and approved in writing before work.
• Draws tied to completed work, not calendar dates.

Concrete and site work on Teton Valley projects is executed through our partner Skinner Customs, whose crews handle foundation, flatwork, and driveway on most of our Driggs and Victor builds.

To review a sample design contract or start an engagement, call (208) 520-0636 or submit your project details: Start with SwagerBuilds.

Idaho Contractor Registration RCE-57499

Frequently Asked Questions

Can I terminate the design contract if things are not working out?

Yes. Our termination clause lets either party exit at the end of any milestone with fees paid to date kept, work delivered to date handed over, and no further obligation. The owner retains the schematic or DD work-in-progress under a single-lot license, meaning it cannot be handed to a third party to finish the same design elsewhere, but it can be finished by another designer for the identified lot with proper attribution.

What happens to the drawings if I cancel the project before permit?

Whatever has been paid for and delivered at that point is yours to keep under a paid-up license for one build on the identified lot. Copyright remains with SwagerBuilds, so the plans cannot be re-licensed to another owner or built on a different parcel without a written amendment. This mirrors the licensing framework used by most licensed residential designers and by the Idaho Board of Architects for stamped work.

Do I need to pay the full design fee before construction begins?

Yes — design fees are fully invoiced across five milestones by the time CDs are delivered and permit is submitted. Once construction begins, 100% of that paid fee credits against the first construction draw, so the total capital outlay does not double. Financing lenders treat this as a soft cost during the design phase and roll it into construction financing at close.

How is the permit fee different from the design fee?

The design fee pays for the plans, coordination, and permit application work. The permit fee is a pass-through charge paid to the jurisdiction (Driggs, Victor, Teton County, etc.) at plan intake, usually calculated from valuation or from a fee schedule tied to square footage. Impact fees, if applicable, are separate again and disclosed at CD delivery.

What insurance and licensing should I verify before signing a design contract?

Verify the general contractor’s Idaho registration through the Idaho Division of Building Safety and any architect involvement through Idaho DOPL. Ask for a current certificate of insurance showing general liability (minimum $1M per occurrence is standard) and workers compensation. Any subcontractor working on your lot should carry the same, with your project listed as a certificate holder for the duration of their scope.

How are change orders priced and approved during the design phase?

A design-phase change order is issued in writing whenever the owner requests scope beyond the fixed fee — an added revision round, a rendering package, or restarting a phase after sign-off. The change order shows the hours and rate, a firm not-to-exceed number, and the schedule impact. Work does not begin until the owner signs. This is the same discipline we apply during construction, just scaled to design deliverables.

Bryce Swager, Founder — 20-year Rigby custom home builder. BuildZoom score 94. Idaho Contractor Registration RCE-57499.

Watch: what we need before design starts

Short answers from Bryce, filmed on site. Transcript under each one.