Cost Per Square Foot

Dear Greg, how much should it cost per square foot to build a house?
Thank you, Doreen

Dear Doreen,

I liken this question to someone going to an auto dealership to order a new car and asking the salesman ‘How much does a car cost?” Until he knows exactly what you want he can’t truthfully answer your question. He will need to first find out which model you want and how many of the options you want to include. Similar to a house but instead of maybe 10 or 20 options with a car, you could potentially have hundreds of options with a house. If you do not tell the builder exactly which options, he cannot quote it accurately. How many potential homeowners want to take the time and go through the hundreds of options available and make a decision which to include? Have you ever agonized over what color to paint your family room? Well, multiply that by a hundred and you get an idea of where I’m going with this. So then, how do we get to a price for your home?

The best thing to do after you have a design on paper is to decide what you want for options.  The more decisions you make the more accurate the price will be. There will always be some decisions to make later and your builder could include an allowance for these. Try to keep these to a minimum because at that time these allowances will be a moving target subject to go up or down – usually up.

Here is an example of why square foot pricing doesn’t work. Let’s imagine a very simple house that is ten feet by ten feet (which equals one hundred square feet) and another house that is two feet by fifty feet (this house also equals one hundred square feet). Now, they both equal one hundred square feet. Will they cost the same to build? The answer is no. The house that is two feet by fifty feet will cost much more. The reason is that the house that is ten feet by ten feet has forty lineal feet of walls (footings, foundation, studs, sheetrock, etc.) while the house that is two feet by fifty feet has one hundred and four lineal feet of walls. The cost for foundation, walls, etc is more than double that of the other house even though they have the same square footage.

Don’t ask your builder for a square foot price. Instead, go to him with a finished plan and all of your decisions made and ask for an accurate quote.

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