What’s your Price per square foot?
Price per square foot explained
Typically the first and most commonly asked question we receive is "what is our cost per square foot" to build a home.
This is an understandable question as most people are shopping around to find a builder to construct their home and achieve the best value for the money. Although, this is one of the most commonly used methods to compare builders it is unfortunately not very reliable because it does not provide any insight into what the price per square foot cost ratio includes.
The simple answer to this question is that we do not have a set square footage price for our homes. A custom home is designed and built to the personal taste of the homeowners. The homeowner controls the money spent and how it is allocated. In the examples and information provided below we hope to clarify why we are not able to quote based on price per square foot.
How is the square footage being calculated?
Is your builder using exterior dimensions or interior dimensions? How do they define heated or unheated space? Have they included the garage or basement or unfinished loft areas in their calculations? What about decks or covered porches? Is the land included in the square foot costs? What about building permits, liability insurance, utility connections, wells, septic systems, driveways, sidewalks, landscaping... All of these variables above factor into the cost of construction and therefor alter the associated price per square foot.
Example (1) (Same lot different sqft )
Home A is a one story home priced at $375,000.00 with 3000 living square feet which equals $125.00 a square foot. (two car garage, 3 bathrooms, 300 sqft of patios and porches)
Home B is a one story home priced at $350, 000.00 with 2500 living equals which $140.00 a square foot. (two car garage, 3 bathrooms, 300 sqft of patios and porches)
Frequently asked question: I removed 500 sqft why didn’t the price reduce by the original price per sqft times the amount footage reduction. In this case the price only reduced $25,000.00 and not (500x $125) $62,500.00.
Answer: Not all the areas of the home cost the same. These homes are essentially the same except for the living square footage (sqft). The same two car garage, 3 bathrooms, 300 sqft of patios and porches. The difference is the 500 sqft of living space and we can see that they have a different price per square foot. The reason is because not all areas of the home cost the same. Kitchens and bathrooms are the most expensive areas in your home. These areas have lots of plumbing, electrical, cabinets, countertops, tilework, fixtures, etc… which means they are more expensive. If you compare footage in the kitchen to footage in a bedroom or closet there is a big difference in the cost needed to build the kitchen versus the bedroom. So if we keep the same kitchen, bathrooms, utility costs, patios, porches and the cost is distributed over a smaller amount of footage than we see why the cost per sqft is higher for a home with a lower living amount of living space.
Example (2) (Same lot Two story versus one story)
Home A is a one story home priced at $375,000.00 with 3000 living square feet which equals $125.00 a square foot. (two car garage, 3 bathrooms, 300 sqft of patios and porches)
Home B is a two story home priced at $360, 000.00 with 3000 living equals which $120.00 a square foot. (2200 sqft 1st floor, 800 sqft 2nd floor, two car garage, 3 bathrooms, 300 sqft of patios and porches)
Frequently asked question: Why is the two story less per sqft for the same size home
Answer: When comparing a one story and two story of comparable square footage, a one story is typically more expensive to build than a two story especially when you’re dealing with a sloped lot. A one story will have a larger footprint than a two story, which translates into a higher foundation costs ( concrete is more expensive than a wood floor system). In our example the 1-story home might have 3800 sq ft of foundation (living space plus garage plus patios and porches). 2-story home might have 3000 sqft of foundation (first floor living area plus garage plus patio plus porches). The additional 800 sq ft of living area is on the second floor. So although the homes are the same size the foundations are 800 sqft feet different. Also another reason a one story is more expensive is because it will requires more roofing to cover the larger footprint whereas a two story has less roof because the living space is stacked.
Example (3) (Same house different lots)
Lot A is very flat. It has a 25 foot front setback, sewer, water and gas connections.
The one story home with 3000 living square feet, two car garage, 3 bathrooms, 300 sqft of patios and porches is priced at $375,000.00 which equals $125.00 a square foot.
Lot B is very sloped. It has a 75 foot front setback, needs a septic tank, needs a water well and a propane tank.
The one story home with 3000 living square feet, two car garage, 3 bathrooms, 300 sqft of patios and porches is priced at $415,000.00 which equals $138.00 a square foot
Frequently asked question: Why does it cost more per sqft to build on lot b versus lot A
Answer: Even though the homes are identical. The site, utilities and restrictions have a significant impact on the budget. Lot B will have more foundation costs due to the topography, it will have more driveway and utility costs due to the increase setback difference. Lot B requires a septic, water well and propane tank which are all more expensive than a lot that has utilities available onsite.
Example 4 (different formulas to calculate sqft price)
Question to ask: You should ask of any builder who quotes price per square foot if their price is based on the living (conditioned space) or another larger footage number which usually includes garages and patios.
Why this is important: The reason this is an important question to ask is because multiplying the gross footage vs the living footage has a dramatic impact on the price per foot. See this example
Builder A (quotes on living footage) (3000 living sqft)
3000 living square feet with (500 square foot garage and 300 square foot patio) Construction price is $375,000.00. (375000/ 3000) which equates to $125.00 per square foot
Builder B (Quotes the exact same house but in gross footage) (3800 gross footage includes garages and patios)
3000 living square feet with (500 square foot garage and 300 square foot patio) Construction price is $380,000.00. (3800000/ 3800) which equates to $100.00 per square foot.
Builder B’s total price is actually more expensive however their price per sqft is lower. This is used as a way to make the customer think they are getting a better price.
Conclusion:
1) Site
2) Topography (foundation, excavation, grading)
3) Restrictions (type of materials and construction required)
4) Setbacks
5) Number of stories
6) Types of materials
7) Utilities needed (water well, septic, propane)
8) Utility distances
9) Level of Finish out
10) Number of garages
11) Size of patios and porches
12) Types of materials (i.e. tile roof vs shingle)
13) Driveway length and quantity (circle drive)
And the list goes on and on… All of the above items contain so many variables that it is impossible for anyone to answer them accurately without first asking several additional questions and gathering much more information. The same is true when calculating the cost to build a new home.
There are literally hundreds of variables that factor into the cost of construction and therefor impact the total cost to build.
Every custom home is unique and needs to be bid that way.
Price per square foot explained
Typically the first and most commonly asked question we receive is "what is our cost per square foot" to build a home.
This is an understandable question as most people are shopping around to find a builder to construct their home and achieve the best value for the money. Although, this is one of the most commonly used methods to compare builders it is unfortunately not very reliable because it does not provide any insight into what the price per square foot cost ratio includes.
The simple answer to this question is that we do not have a set square footage price for our homes. A custom home is designed and built to the personal taste of the homeowners. The homeowner controls the money spent and how it is allocated. In the examples and information provided below we hope to clarify why we are not able to quote based on price per square foot.
How is the square footage being calculated?
Is your builder using exterior dimensions or interior dimensions? How do they define heated or unheated space? Have they included the garage or basement or unfinished loft areas in their calculations? What about decks or covered porches? Is the land included in the square foot costs? What about building permits, liability insurance, utility connections, wells, septic systems, driveways, sidewalks, landscaping... All of these variables above factor into the cost of construction and therefor alter the associated price per square foot.
Example (1) (Same lot different sqft )
Home A is a one story home priced at $375,000.00 with 3000 living square feet which equals $125.00 a square foot. (two car garage, 3 bathrooms, 300 sqft of patios and porches)
Home B is a one story home priced at $350, 000.00 with 2500 living equals which $140.00 a square foot. (two car garage, 3 bathrooms, 300 sqft of patios and porches)
Frequently asked question: I removed 500 sqft why didn’t the price reduce by the original price per sqft times the amount footage reduction. In this case the price only reduced $25,000.00 and not (500x $125) $62,500.00.
Answer: Not all the areas of the home cost the same. These homes are essentially the same except for the living square footage (sqft). The same two car garage, 3 bathrooms, 300 sqft of patios and porches. The difference is the 500 sqft of living space and we can see that they have a different price per square foot. The reason is because not all areas of the home cost the same. Kitchens and bathrooms are the most expensive areas in your home. These areas have lots of plumbing, electrical, cabinets, countertops, tilework, fixtures, etc… which means they are more expensive. If you compare footage in the kitchen to footage in a bedroom or closet there is a big difference in the cost needed to build the kitchen versus the bedroom. So if we keep the same kitchen, bathrooms, utility costs, patios, porches and the cost is distributed over a smaller amount of footage than we see why the cost per sqft is higher for a home with a lower living amount of living space.
Example (2) (Same lot Two story versus one story)
Home A is a one story home priced at $375,000.00 with 3000 living square feet which equals $125.00 a square foot. (two car garage, 3 bathrooms, 300 sqft of patios and porches)
Home B is a two story home priced at $360, 000.00 with 3000 living equals which $120.00 a square foot. (2200 sqft 1st floor, 800 sqft 2nd floor, two car garage, 3 bathrooms, 300 sqft of patios and porches)
Frequently asked question: Why is the two story less per sqft for the same size home
Answer: When comparing a one story and two story of comparable square footage, a one story is typically more expensive to build than a two story especially when you’re dealing with a sloped lot. A one story will have a larger footprint than a two story, which translates into a higher foundation costs ( concrete is more expensive than a wood floor system). In our example the 1-story home might have 3800 sq ft of foundation (living space plus garage plus patios and porches). 2-story home might have 3000 sqft of foundation (first floor living area plus garage plus patio plus porches). The additional 800 sq ft of living area is on the second floor. So although the homes are the same size the foundations are 800 sqft feet different. Also another reason a one story is more expensive is because it will requires more roofing to cover the larger footprint whereas a two story has less roof because the living space is stacked.
Example (3) (Same house different lots)
Lot A is very flat. It has a 25 foot front setback, sewer, water and gas connections.
The one story home with 3000 living square feet, two car garage, 3 bathrooms, 300 sqft of patios and porches is priced at $375,000.00 which equals $125.00 a square foot.
Lot B is very sloped. It has a 75 foot front setback, needs a septic tank, needs a water well and a propane tank.
The one story home with 3000 living square feet, two car garage, 3 bathrooms, 300 sqft of patios and porches is priced at $415,000.00 which equals $138.00 a square foot
Frequently asked question: Why does it cost more per sqft to build on lot b versus lot A
Answer: Even though the homes are identical. The site, utilities and restrictions have a significant impact on the budget. Lot B will have more foundation costs due to the topography, it will have more driveway and utility costs due to the increase setback difference. Lot B requires a septic, water well and propane tank which are all more expensive than a lot that has utilities available onsite.
Example 4 (different formulas to calculate sqft price)
Question to ask: You should ask of any builder who quotes price per square foot if their price is based on the living (conditioned space) or another larger footage number which usually includes garages and patios.
Why this is important: The reason this is an important question to ask is because multiplying the gross footage vs the living footage has a dramatic impact on the price per foot. See this example
Builder A (quotes on living footage) (3000 living sqft)
3000 living square feet with (500 square foot garage and 300 square foot patio) Construction price is $375,000.00. (375000/ 3000) which equates to $125.00 per square foot
Builder B (Quotes the exact same house but in gross footage) (3800 gross footage includes garages and patios)
3000 living square feet with (500 square foot garage and 300 square foot patio) Construction price is $380,000.00. (3800000/ 3800) which equates to $100.00 per square foot.
Builder B’s total price is actually more expensive however their price per sqft is lower. This is used as a way to make the customer think they are getting a better price.
Conclusion:
1) Site
2) Topography (foundation, excavation, grading)
3) Restrictions (type of materials and construction required)
4) Setbacks
5) Number of stories
6) Types of materials
7) Utilities needed (water well, septic, propane)
8) Utility distances
9) Level of Finish out
10) Number of garages
11) Size of patios and porches
12) Types of materials (i.e. tile roof vs shingle)
13) Driveway length and quantity (circle drive)
And the list goes on and on… All of the above items contain so many variables that it is impossible for anyone to answer them accurately without first asking several additional questions and gathering much more information. The same is true when calculating the cost to build a new home.
There are literally hundreds of variables that factor into the cost of construction and therefor impact the total cost to build.
Every custom home is unique and needs to be bid that way.
