Square Foot Pricing...Handle With Care!
When evaluating the costs of building a new home, many homeowners use square foot pricing as a basis for comparison. Let's talk about square foot pricing for a minute - what it is and what it isn't.
Square foot pricing is a method to roughly compare construction costs for two similar houses, houses in different parts of the country, and houses with different characteristics. It is not a method for determining how much a particular design is going to cost to build.
I can tell you, for example, that a typical production starter home (a standard plan built by a large-volume regional or national builder) will cost around $80 to $100 per square foot to build in my part of the country. A "semi-custom" home will cost around $110 to $130 per square foot, and a true custom home will cost at least $140, and as much at $200 per square foot to build.
Show me a house plan, and with a few specific questions, a builder can place it within one of those ranges. That's a start, but for a 2,500 square foot "semi-custom" home, a range of $20 per square foot is a lot of money. You most definitely don't want your cost estimate on a $250,000 house to be off by $50,000!
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| But with a little research, square foot pricing can be a useful tool. Find out what similar houses cost to build in your area (don't forget to take out the cost of the land first) to place your plan in an appropriate price range. Find builders who build homes in that range and have them prepare a more detailed take-off for you.
An experienced builder will be able to further evaluate your plan in terms of the expected level of finish, the impact of your building site, and other factors in order to fine-tune the cost estimate.
House Plan Size
Many things affect the cost of building a typical house but there are three big ones: size, complexity, and the level of finish. The effect of house size on construction cost is obvious - I don't need to explain this in detail, do I? Bigger houses cost more. But it's not quite that simple.
Significantly more important than house size alone is the matter of where that size goes since the "cost per square foot" of a house varies tremendously from room to room. It's obvious that a kitchen, with appliances, cabinets, countertops, plumbing fixtures, tile flooring, and other expensive finishes will cost more "per square foot" to build than a bedroom - which doesn't have much more finish than carpeting and paint.
If you squeeze the size of a house down by taking space from low cost-per-square-foot rooms like bedrooms you'll find that you haven't affected the overall cost of the house much at all. In fact, you'll likely not do much more than simply raise the cost per square foot of the entire (now smaller) house - and maybe not change the overall cost at all.
So a smaller house - if the size difference is in inexpensive rooms - may not be a less expensive house.
House Plan Complexity
The effect of the complexity of a house on the construction cost is frequently misunderstood and it's one of the sources of many an unpleasant surprise for house plan buyers.
Simply put, a complex house is more expensive to build than a simple house. But what makes a house complex? Mostly it's a function of the shape of the house and the relationship of the amount of roof and the amount of foundation to the area of the house.
Consider two typical house designs: A rectangular two-story Colonial house and a French Country home with a first-floor master bedroom suite. Both houses are 3,000 square feet and both have the same level of finish.
The Colonial home is the picture of simplicity; both floors are exactly the same size and are stacked directly over another. So while the entire house is 3,000 square feet, the foundation and the roof are each only 1,500 square feet (I'm ignoring the garage for this example). It's efficient and easy to build.
The French County plan is the same size but less efficient; with the master bedroom suite moved from the upper floor to the lower, the roof area and foundation area increase by about 500 square feet - but the overall size of the house stays the same at 3,000 square feet. More roof and foundation containing the same area; same size but with more lumber and concrete = more cost.
Colonial homes have simple gabled roofs. In the simplest examples the roof is made entirely with just one truss configuration. That's a huge sigh of relief for the truss fabricator and the framing crew - every truss is the same! And without any intersecting roofs or dormers, there's no overlay framing and no flashing or valley metal to install.
But French Country design is distinguished by its more "rambling" nature; an attractive home of this style spreads itself out a bit. French County roofs are typically hipped rather than gabled (hips are more expensive) and are often steeply pitched - more lumber is required and the roofing labor is more expensive.
Every angle, intersecting roof, bay window, porch, or level change adds complexity to a house. If you're comparing two house plans, watch for complexities in the layout that may make one significantly more expensive to build than the other.
Finishes and Fixtures
Let's compare two houses again, only this time they're both 3,000 square foot Colonials. One has a fiberglass tub in the master bath (about $500) and one has a $5000 whirlpool tub. That one change adds $4500 to the cost of the house but more importantly, it changes the "square foot" cost of the house by almost $1.50 per square foot.
Careful - here's where homeowners get "nickeled and dimed" to death. Perhaps you were quoted a base cost of $120 per square foot for your house. Add the tub, and it's gone to $121.50. Add hardwood, granite, under-mounted sinks, brass hardware, and other upgrades and suddenly you're at $140 per square foot and way out of your budget.
Finishes and fixtures (flooring, cabinets, countertops, trim, etc.) represent about 30% to 40% of the cost of a house. You may only increase the cost of each item a little but because so many items fall into this category it's very easy to lose control of the total cost.
If you want nicer finishes but your budget is tight, do what my clients do - put the nice stuff in the kitchen and master bath and the cheaper stuff everywhere else. More importantly, assemble a list of the finishes and fixtures you want at the beginning of the project and stick to it.
Budget Creep
Budget creep is the gradual, sometimes unnoticeable increase in the cost of your project as new items are added, mistakes are uncovered, or unusual site conditions are revealed. Budget creep happens slowly, one decision at a time, creeping up and devouring your building budget before you know it. It can afflict you during the planning of a house project but more often it's a disease of the construction phase.
A little planning, patience, and foresight can help avoid it.
On any project, start with a clear idea of the level of finish and quality you expect. Don't assume that your builder is in tune with your ideas about finishes - discuss your expectations in detail and whenever possible, see the actual finishes and fixtures. If you're not the detail-oriented type, hire a professional interior designer.
Poor quality drawings cause additional unplanned work during construction, and always end up costing homeowners money and time. My firm's been hired many times to correct drawings done elsewhere that contained glaring errors, omitted necessary structural steel, or just plain didn't work. Sloppy drawings are an open invitation to Project Creep.
Finally, always have realistic expectations about your project budget and communicate that budget to your builder. When everyone understands the project's financial goals the chances for success are greatly increased.
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