Two questions we are frequently asked;
- What does it cost to build a custom home?
- Why does a High Performance Custom Home cost more than a subdivision home?
To start, high performance custom homes are unique and easy to distinguish from a subdivision home. There are many variables making it superior: style & complexity, unlimited finish options, quality of materials, higher-end fixtures, super-efficient heating & cooling equipment, superior insulation & air sealing, a higher level of service provided, and highly skilled craftsman. Two homes may be similar in size, but there are vast differences in how each of the homes was built and finished.
It seems most everyone talks about the cost of a home on a cost per square foot calculation. So, before we jump into cost, let us First discuss what is included in cost per square feet and how it is calculated. Secondly, we’ll move on to the differences between custom homes and subdivision homes, and Finally, what is not included in the cost per square foot.
First – Cost per Square Foot (cost/sf)
Ask any farmer what a bushel of wheat costs and he will have an instant answer for you. Similarly, the price of a barrel of oil and an ounce of gold are common knowledge, with costs quoted down to the last cent. But try asking a home builder about the “cost per square foot” to build a home, and you will likely get any number of responses including, lowball guesses, unhelpfully vague price ranges, or even outright irritation from the respondent. Why is new home construction so different? A simple question like this seems fair, so why is it met with disdain by home builders?
The disconnect stems from the fact that in residential construction, there is simply no agreed upon Standard for what constitutes a square foot. No grocer would have trouble telling you what a gallon of milk costs, and what it contains. It is not so easy to decide what is contained in a square foot of home. For example, do builders only include finished square footage in their estimates? Do they count unfinished basements? Does a square foot include the garage and deck? Therein lies the complication: it’s up to each builder to decide for themselves and how they explain this to the inquirer.
For illustration, consider the hypothetical Jones Residence. The Jones family wants a ranch home with 2,000/sf on the main level, an unfinished basement, a two-car garage (700/sf), and a covered front porch (200/sf). Simple enough, right? The savvy Mr. Jones, seeking more than one opinion, meets with two separate builders and asks them, independently, what they would charge him per square foot to build his dream home?
Builder A looks at the project and considers it a 4,000/sf home since, after all, while the basement will be unfinished, it is nonetheless conditioned space and thereby “countable.” He also reasons that all his homes generally have a 200/sf covered front porch with a 700/sf, two-car garage, an integral part of the house. His price? Only $100/sf.
Builder B looks at this very same layout but considers it a 2,000/sf home. He only counts the finished, heated & cooled area of the home – the 2,000/sf on the main level. He reasons that all his homes of this size have an unfinished basement, two-car garage ( approx. 700/sf) and a covered front porch ( approx. 200/sf) as an integral part of the house. He proudly presents his reasonable cost to build the Jones Residence at $200/sf.
That is a difference of $100/foot between the two, and their calculations are 2,000/sf apart…and they are both right. Notice, despite the disparities mentioned above, they’ve both quoted a home that costs about $400,000. Builder B just looks more expensive, on paper.
Stockell Homes, like Builder B, counts the finished, conditioned area of the home.
This scenario plays out in real life all the time. Unfortunately, it often results in a homeowner selecting a builder based on who can provide the “lowest cost per foot” without considering the bigger picture. Each builder, when presented with plans and specifications is able to implement unit costing and vendor quotes to arrive at a total construction cost. At the end the day, the square-foot cost is largely incidental – a house costs what it costs. Please keep in mind, Cost per Square foot is only an Estimate and is based on similar homes recently built. The finishes selected by the client on a new home and the land on which it is built, will change the equation.
To further illustrate the differences, no two builders include the same features or specs in the homes they build. See the chart below for an overview of some of the possible differences.
Secondly – What basic specs are included in the square foot cost?
Our custom homes include the following specs vs subdivision homes or other builder’s homes.