I recently received a phone call from someone asking
me the question "What is your average cost
per square foot?"
I get this question often. I cringe when I hear it.
People will ask me this question sincerely in order to compare me
to another builder. I beg you, do not compare builders based
on this question. The answer is more complex than the question.
So what do I do when I get this question?
First, I state that I have built homes before for $94 per square foot all the way up to a home I built for $156 per square foot. (Not including land.)
Why the difference?
1. You have to know what is being considered in the cost per square foot number. Does it include landscaping and the cost of water and sewer (or well and septic)? I have also built homes with 700 foot driveways and ones with 35 foot driveways. That is a big cost difference. Is underground sprinkling included in the number? How about appliances - included or not?
2. A ranch home vs. a two story home. Many people will say to me that they want a two story home because it is less costly to build than a ranch. I agree with them provided they tell me that they have no use for the basement, the lower level.
The reason for the less expense with a two story home is that you have a smaller foundation, fewer trusses and perhaps fewer floor joists than you have with a ranch home.
So when is a ranch home less expensive than a two story home? When you finish the lower level, the basement. With a ranch home, you double your square footage when you finish the lower level. With a two story home, you only grow finished square footage by a 1/3 when you finish the lower level. That's the difference.
3. Structure - the majority of the cost of a home is in the structure. Simplify the structure and you lower the cost per square foot of a home. I once built a 2,400 square foot home that had $15,000 trusses, whereas most of the 2,400 square foot homes we build have trusses of $9,000. Comparing the same homes again, the windows in the more expensive home cost $32,000. The other home had $11,000 worth of windows. Therefore, two homes with the same square footage and one has $27,000 more cost in just two components of the home. Other components can have a greater impact on the cost than the two examples I selected.
One more point on structure, building a home shaped like a rectangle is less expensive than building a home that has lots of jogs, angles, and so forth. Again, simplify the structure and you lower the cost per square foot.
4. What is on the inside of the home. We build homes that have lots of tile, wood floors and solid surface countertops. All of the finer things. We have also built homes of the same size that have vinyl floors, formica countertops and pre molded showers. The cost difference could be $15,000 to $20,000.
"Yeah, Yeah all that stuff above is fine Mr. Builder, but how can I get an answer to my question? "
1. Sit and meet with the builder to review the plan that you have (or desire) and go through a brief list of the features you desire. A builder can ballpark a price for you.
2. Ask the builder to show you some homes that they have built and determine the price of those homes and the square feet. Then talk about the features of the home that make it more expensive or less.
Please keep in mind the old adage "garbage in, garbage out." When you are seeking a cost estimate from a builder the less detail you give, the less accurate the estimate. Do you want accuracy? Then give detail.
When can you compare builders on a cost per square foot basis?
When you are comparing homes that are in the same area, the same development. Homes that are already built. The reason that comparison may be valid is because their building components are likely similar. Their development requirements are similar. They probably have a similar look.
In summary, I go back to my earlier statement "the answer is more complex than the question". Comparing builders on a cost per square foot basis is misleading.
To determine how to find a builder, please look to my blog entry "How to Select Your Builder".
Build on! Build well! Build with confidence!
If you arrived at our blog from a source other than our website, please visit us at www.heartlandbuilders.com. Further, if you are considering building a home, please contact us. We would welcome the opportunity to be a part of your dream.
Lastly, please know that we build homes in the Grand Rapids, MI area - Cedar Springs, MI, Grant, MI, Trufant, MI and many other beautiful areas surrounding West Michigan. My words above are universal. It doesn't matter if it is Grand Rapids, MI or Grand Bluffs, ME, Forest Hills Public Schools or Forest Lawn Schools. The dollar amounts may be different, but the philosophy and practice are the same.
If you have any questions, please feel free to email me at rich@heartlandbuilders.com. Thank you.
me the question "What is your average cost
per square foot?"
I get this question often. I cringe when I hear it.
People will ask me this question sincerely in order to compare me
to another builder. I beg you, do not compare builders based
on this question. The answer is more complex than the question.
So what do I do when I get this question?
First, I state that I have built homes before for $94 per square foot all the way up to a home I built for $156 per square foot. (Not including land.)
Why the difference?
1. You have to know what is being considered in the cost per square foot number. Does it include landscaping and the cost of water and sewer (or well and septic)? I have also built homes with 700 foot driveways and ones with 35 foot driveways. That is a big cost difference. Is underground sprinkling included in the number? How about appliances - included or not?
2. A ranch home vs. a two story home. Many people will say to me that they want a two story home because it is less costly to build than a ranch. I agree with them provided they tell me that they have no use for the basement, the lower level.
The reason for the less expense with a two story home is that you have a smaller foundation, fewer trusses and perhaps fewer floor joists than you have with a ranch home.
So when is a ranch home less expensive than a two story home? When you finish the lower level, the basement. With a ranch home, you double your square footage when you finish the lower level. With a two story home, you only grow finished square footage by a 1/3 when you finish the lower level. That's the difference.
3. Structure - the majority of the cost of a home is in the structure. Simplify the structure and you lower the cost per square foot of a home. I once built a 2,400 square foot home that had $15,000 trusses, whereas most of the 2,400 square foot homes we build have trusses of $9,000. Comparing the same homes again, the windows in the more expensive home cost $32,000. The other home had $11,000 worth of windows. Therefore, two homes with the same square footage and one has $27,000 more cost in just two components of the home. Other components can have a greater impact on the cost than the two examples I selected.
One more point on structure, building a home shaped like a rectangle is less expensive than building a home that has lots of jogs, angles, and so forth. Again, simplify the structure and you lower the cost per square foot.
4. What is on the inside of the home. We build homes that have lots of tile, wood floors and solid surface countertops. All of the finer things. We have also built homes of the same size that have vinyl floors, formica countertops and pre molded showers. The cost difference could be $15,000 to $20,000.
"Yeah, Yeah all that stuff above is fine Mr. Builder, but how can I get an answer to my question? "
1. Sit and meet with the builder to review the plan that you have (or desire) and go through a brief list of the features you desire. A builder can ballpark a price for you.
2. Ask the builder to show you some homes that they have built and determine the price of those homes and the square feet. Then talk about the features of the home that make it more expensive or less.
Please keep in mind the old adage "garbage in, garbage out." When you are seeking a cost estimate from a builder the less detail you give, the less accurate the estimate. Do you want accuracy? Then give detail.
When can you compare builders on a cost per square foot basis?
When you are comparing homes that are in the same area, the same development. Homes that are already built. The reason that comparison may be valid is because their building components are likely similar. Their development requirements are similar. They probably have a similar look.
In summary, I go back to my earlier statement "the answer is more complex than the question". Comparing builders on a cost per square foot basis is misleading.
To determine how to find a builder, please look to my blog entry "How to Select Your Builder".
Build on! Build well! Build with confidence!
If you arrived at our blog from a source other than our website, please visit us at www.heartlandbuilders.com. Further, if you are considering building a home, please contact us. We would welcome the opportunity to be a part of your dream.
Lastly, please know that we build homes in the Grand Rapids, MI area - Cedar Springs, MI, Grant, MI, Trufant, MI and many other beautiful areas surrounding West Michigan. My words above are universal. It doesn't matter if it is Grand Rapids, MI or Grand Bluffs, ME, Forest Hills Public Schools or Forest Lawn Schools. The dollar amounts may be different, but the philosophy and practice are the same.
If you have any questions, please feel free to email me at rich@heartlandbuilders.com. Thank you.
1 comment:
Lovely sharp post. Never thought that it was this easy. Extolment to you!
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