cost per square foot...the great imposter

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Permalink Reply by Joe Folsom on November 7, 2009 at 12:19pm

Quoting a cost per square foot without first understanding the clients personal taste, quality preferences, amenity selections, site preparation requirements, size of home, number of stories, number of corners on the home, number of hips and valleys on the roof lines, etc. etc. is like asking your doctor how much it will cost to cure an illness without first having him do a diagnose of what is wrong with you. A GOOD BUILDER and/or DESIGNER will always get to know you first and design and build your new home to your budget. He/She does this by diagnosing your requirements, your wishes, your desires and by guiding you through the areas where you may be willing to make compromises when the budget is more important.

Unfortunately, many folks out there planning to build a home get quoted low ball numbers to entice them to do business with one builder or another without first having a good understanding of what is wanted or needed. My advice is to give your builder a budget range, tell him/her what you want and work together on a reasonable budget you both can live with. If you can't trust your builder with this information up front, you need another builder.

If you really want a breakdown on cost, see my article entitled "Is A Log Home A Good Investment?" and scroll down to the "What Will It Cost To Build A Log Home?" section at this link: Modern Rustic Living - Cost To Build Your Dream Home.

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Permalink Reply by Scott Stroud on November 13, 2009 at 10:26am

Tom Stephani, a Builder/Marketer/Trainer from Crystal Lake, IL, has a great response to the question 'What do your homes cost per square foot?' His answer: "That's completely up to you. Our homes are built to suit, so the final cost will depend on the choices you make as to what you want us to include in your home."

Listen to Tom's complete answer (or read the blog notes attached) at http://builderradio.com/blog/?p=65

Scott
www.BuilderRadio.com

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Permalink Reply by Lumber Jack on January 8, 2010 at 12:02pm

If the goal is "just" credibility, a detailed quote would be a good start indeed. Assuming the plans are approved and signed of course. But as far as accuracy goes, it would be foolish for the owner to even expect an exact cost produced before construction begins. I guess, if you are looking for ballpark (good luck selling that to your mortgage company tho) , you can ask around on forums like this or elsewhere (see people respond to square foot construction cost in Houston or sq. ft. construction costs in NJ for examples) and then average answers out. Still, the owner should realize that his/her actual costs will vary greatly. Always be prepared to pay at least 1/3 more than was quoted!

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Permalink Reply by Joe Folsom on January 8, 2010 at 12:42pm

I think it is important to understand what a "Cost Per Square Foot" quote/estimate/projection really indicates and what it does not indicate. First of all, most reputable builders will not guarantee a cost per square foot quote unless they are building a tract home which they have built many times and they have specific finish materials included in the package. Challenge is, more clients than not want a custom home and they want to choose the finish materials thus rendering a cost per square foot quote mute and a moving target. Having said that, a cost per square foot average can be determined by pulling historical numbers together and averaging it out. Challenge is, this number means nothing to a new home owner who may want more or less in their specific home. Also, what's average to one person may not be average to another. We all have different taste and our concepts of what is middle of the road is different.

Bottom line is the wise home buyer & home builder will spend time with you to determine the level of finish you want in your home, help you choose specific materials and add up all the costs for an accurate quote before construction begins. These numbers and the list of finish materials should also be included in your agreement between the buyer and the builder. If this is done with due diligence, I respectfully disagree with the Lumber Jack who says the cost will always be at least 1/3 more. A good builder should be able to be within 5% of the quoted price of a job (excluding change orders that the client may elect to include during construction but after the original quote was provided).

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