custom home construction budget

Apples to Apples – The Myth of Construction Cost per Square Foot

When clients begin researching a builder for their custom home, most often the first question asked is – “What is your price per square foot?” Most people believe this is the best way to get an idea of what it will cost to build their home. The other misconception is believing a builder can give them a ballpark price based on another home they saw on the builders website – because the square footage is similar.

Unfortunately – this isn’t the right question to ask a builder when starting that relationship. They won’t tell you this but every builder feels the same way. What is really happening is the builder (who has most likely been cold called by the prospective client, sight unseen of any drawings or specs) is forced to give a starting point to at least capture the lead or clients confidence, only of which then erodes like a melting ice cream cone in the hot sun once the builder sees the plans and begins giving true costs (which can often be higher) and the client is still stuck on the original price quoted as if it were gospel.


The REAL Factors That Make Up Price Per Square Foot

Will your house cost $150 per square foot, $200 per square foot or $300 per square foot? It’s impossible to say based on a builder not seeing any finished house plans, not having any idea of interior or exterior specifications etc. Size of the home and property size is not enough to gage a ballpark price per square foot from even though builders will try to give you an idea. This figure will change, and will most likely increase.

If you choose to go this route, you will end up feeling like you’ve fallen for the bait and switch when the builder tells you the initial price per square foot given over the phone has now increased and you’ve just spent weeks in the courtship process. Even if it’s increased by $20 a square foot, multiply that by 3500sf that’s an increase of $70,000! Any builder that gives you a price per square foot over the phone without having seen the finished working plans from your architect or designer, hasn’t met with you, hasn’t walked your property etc, is not providing you with a professional and honest answer. Be prepared for unhappy surprises.

 

All Rooms Are Not Created Equal

Some rooms are much more expensive than others. For example, kitchens contain expensive stuff, like cabinets, appliances and countertops. They often have more electric lights, power hook-ups, gas and plumbing connections, and tile backsplashes. Bathrooms contain a lot of plumbing piping and fixtures, tile floors and walls. Kitchen and bathrooms are usually the most expensive rooms in any house.

The lowest cost rooms in your house will be the rooms that are built within the roof structure, i.e., the attic, garage or basement. The shape of a roof over a room with a flat ceiling creates an attic space that is going to be constructed whether you finish off the attic or not. Because most houses have a sloped roof, an attic is the by-product. The steeper the roof, the greater the volume of space created within the attic. Finishing off attic space that is already there is very economical to do. This is also true with a basement space. If your site or climate dictates that you build a basement, adding heat and air conditioning, an electrical system, drywall, paint, and a floor finish can often be done for a much lower cost than the average cost per square foot of the rest of the house.

There are several other things that affect the construction cost of your home without actually adding square footage. The type of construction, the exterior wall surface materials, the appointments, finishes, and equipment within the house, and the building site are big factors.

  • A house built with a poured concrete basement, 2×6 stud walls, a slate roof, and a high efficiency heating and air conditioning system will be a lot more costly than one built on a concrete slab with 2×4 stud walls, an asphalt roof, and a basic heat pump.
  • A house built with radiant heat, wood windows, slate roof and copious cabinets will be a lot more costly than one built with a basic forced air furnace, vinyl windows, asphalt roof and a minimum of cabinets.
  • A house with a full stone exterior is a lot more expensive than one with composite siding.
  • A house with a Sub-Zero refrigerator and granite countertops will cost more than one with a basic free-standing refrigerator and laminate countertops.
  • A house built on a steep slope will cost more than one built on flat land. All of these houses could be exactly the same square footage, but the constructions cost, and their cost per square foot, would vary wildly.

 

Different Builders Might Calculate Square Footage By Different Methods.

Usually this is an innocent difference in opinion of how square footage should be calculated. But sometimes the builder’s purpose is to make his bid look lower and more appealing than those of his competitors. For example, some builders will include the areas of the garage and decks into the total square footage, while others don’t. In these cases, the total cost of the house would be divided by a greater number of square feet and the “cost per square foot” would be considerably lower.

The best way to calculate an effective cost per square foot is to make sure you are comparing apples to apples. Otherwise, the cost per square foot information you get is useless. No matter what method you use, make sure that you are comparing things equally when you’re looking at different bids and different builders. And don’t fall into the trap of estimating the cost of your project based on a cost per square foot estimate alone. You won’t have an accurate price until you have an accurately calculated price.

 


Clay Construction is a luxury custom home builder, building and renovating quality residential homes in Metro Vancouver since 2004.

Are you thinking of building a custom home in Metro Vancouver? Call or email Suzanna today and ask for the Clay Construction Welcome Kit, our free information gathering tool you can use and share with the Clay Construction team to help plan and organize your custom home project.

7 replies
  1. Andy
    Andy says:

    For 2000 square foot home. How do you pay the different trades . How do you know how much each trade will cost you? At 150 per square foot.

    Reply
    • Suzanna Clay
      Suzanna Clay says:

      Hello Philip, I just noticed your comment. Thank you for your kind words. It looks like you are I are fighting the same battle educating the consumer of poor construction practices. Keep up the great work. Larry

      Reply
  2. Steve sebz
    Steve sebz says:

    I appreciate CLAY constructions. The process of renovations of custom homes being well as well as it’s projects are going smoothly into vast areas.Thanks!

    Reply
  3. joe white
    joe white says:

    BEWARE -So many meanings of “square foot” …Are we talking “living space” only or including garages…and “below grade” foot levels as well (as pointed out).
    Some may think the square footage is based on the “birds-eye” footprint of the building. That may be a correct interpretation in some cases, such as certain zoning calculations for lot coverage etc., but not for most pricing methods.
    Each floor level is usually included, however, basements and how much they are below grade and/or is they are “finished living areas” may or may not be-depending on the contractor.

    As I mentioned, for zoning calculations and what is permitted, there may be various interpretations of square footage of the building area, which can complicate things if you are planing your home. Just beware you are dealing with many different interpretations of square footage for a house. (Don’t forget detached accessory buildings or garages)

    Finally, for insurance purposes, make sure you don’t get burned by your insurance company using one term for your houses square footage and what YOU consider insurable for replacement. You may think your covered for your home with a fully finished basement linving area, only to find the insurance coverage was for “above ground” living areas-and an foundation.

    I don’t mean to make this more complicated than it is, however as an architectural technician and a home owner, I have seen how such a simple term as Square footage can be grossly misinterpreted by many of the players involved.

    BTW,, this doesn’t include other methods of pricing including lineal / board feet, wall/foot areas etc etc.

    Reply

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