Understanding Price  Per Square Foot......


Do you truly understand what you are asking when you ask the question, "How much per square foot do you charge to build a house?" Let's take a little deeper look at this question. 
When contemplating building a new custom home, there are some basic ground rules 
you need to be aware of : 
1) Don't compare the value of different homes based solely on the price per square foot; 
2) Take into account all the square footages or total area under roof; i.e. garages, covered porches & patios, unfinished bonus rooms, etc...; 
3) Compare All the amenities between different homes - everything costs money; 
4) Depending on LOCATION the homesite could range from 10% up 30% of the total amount you intend on investing on your new home; 
5) There are 4 primary aspects of every home that will either cost you or save you $$$$ Money! 
#1 Your Homesite - The cost of the homesite and the cost to prepare it. 
#2 The Square Footage - The more you have the more it cost. 
#3 The Amenities - The quality and quantity of your selections can dramatically affect the overall cost. 
#4 The Degree of Complexity - The more complex the design of the home, the more it will cost to build. Of course, the opposite is true. 
Now understanding why this question is the most misunderstood and misused method of determining the relative value differential when comparing the prices of New Custom Homes! It is absolutely impossible to answer this question accurately because of the many components and variables involved in building and pricing a new home. 
Here is an example to consider. What brand name of appliances will go into the home? What Series? (Base grade, Standard, deluxe, stainless steel?) Double or single ovens? Updraft or downdraft? Gas or Electric? Smooth Cook-top or Coil? Built-ins or stand alone? Carousel or Fixed table microwave? 1/3 or 1/2 Horse Power disposal? How many cycles for the dishwasher? The possibilities can be endless and it is up to the Home Builder to accurately determine what the costs are and properly account for them all.
Here is another example dealing with a Lighting Package. Custom Home "A" and Custom Home "B" have the exact same light package when constructed. Let's use the price per square foot method to determine the value. Our Lighting Package cost is $3,000. Custom Home "A" is 3200 square feet. Custom Home "B" is 3500 square feet. Using the price per square foot theory, the Lighting Package in "B" breaks down to $0.85 per square foot. ($3,000 divided by 3,500 square feet). Now being the average buyer of today, I assume the Lighting Package for "A" should only cost $2,720 because I use the $0.85 amount to calculate the price, (3200 square feet X $0.85). I would typically think I should be paying about $300 less for Custom Home "A". So, hopefully you can see why price per square foot from one home cannot be used to accurately calculate the price of another. 
MOST IMPORTANTLY, don't stress out! This is supposed to be an enjoyable and rewarding experience. It is our goal to help reduce, if not eliminate the ups and downs in building a new home.