Welcome!
Today we’re continuing our discussion on building your dream home. If you didn’t join us last week, take the link to read the first post. We introduced fellow designers around the country who gave advice about which professional to hire first. Next we are going to explore one of the most common questions people have when they are considering new construction:
How much is this going to cost?
It seems like such a simple question, right? While it seems simple, it’s actually one of the hardest questions to answer, and we’ll show you why in a minute.
The first area of confusion we run into is the fact that the cost of building varies widely from one location to another. A decade ago, when my husband and I were starting out in the new construction industry, we made the mistake of assuming that the cost to build in Colorado would be similar in Wyoming. We all know where that led. As it turned out, building in Wyoming, even when we were doing most of the work ourselves, was more expensive than Colorado. Why? Here are a few things we’ve learned over the years:
1) In Wyoming, it’s much harder to get supplies. They take longer to arrive, and usually have higher prices due to the higher cost of freight.
2) Building takes longer. This may not directly add to the price (bids are bids), but it does affect the process. We fight brutal, long winters and have short summers. As much as my husband would like to speed things up, his guns and air compressors simply won’t work when the temperature drops below freezing. Sometimes he’ll spend half the day shoveling snow away just to get to the work that needs to be done.
3) As far as I know, there isn’t a contractor in this valley that hires illegal immigrants or pays their employees or subs under the table. This is a rampant problem in some parts of the country. Even if the contractors don’t directly hire illegal immigrants, there’s a lot of “looking the other way”. The money spent on new construction in Wyoming supports families who pay taxes, live within the bounds of the law, use it to put food on the table, and get their kids through college. I’ll stop this discussion here, because there’s another time and place, but it’s an issue dear to my heart.
4) There aren’t any places to purchase “ready made” products. Every home requires specialized trades, and so every home is a custom home. That being said, sometimes you can get custom products for the same price as purchasing from a store like Home Depot, so it’s always worth looking into.
Other Parts of the Country
Joining me today will be Lori May, founder and CEO of Lori May Interiors and Elle Cole, founder and CEO of Elle Cole Interiors, whom you met last week. She’s based in the Atlanta metro area. She says:
“How much does it cost [to build]? This is such a difficult question to answer because of the many factors that go into the overall cost of a home. Here in Atlanta, price depends a lot on where you build. In the city, you can easily spend $200 a square foot or more. In the suburbs, it could be as low as $80 a square foot.
I think the key is knowing what you want in a home. Do you want all custom cabinetry, specialty flooring, or a great deal of stonework? These are all items that can bump up the price.
Work with your team to create your wish list before the plans are drawn up. You can control many of the costs if you have a plan from the beginning.”
“Maneuvering the cost of building a home can be overwhelming. But, hopefully from the post last week you’ve assembled a dynamic team to eliminate some of that stress.
Today, according to the National Home Builders Association; the average cost to build is $134/sqft. = $310,619.00 total costs with a finished home of 2,311 sqft. This number is calculated on a national basis after land is bought, construction cost, overhead/, etc.
In Dallas, Texas you are looking at $150 – $250 sqft. to build a home. This is also dependent on the area in which you want to live. If you are looking in the Park Cities area the land values are in upwards of a $1 Million plus, farther north land values are close to $600k – $1M with more acreage. The average cost to build a new spec home is close to $200 sqft. When deciding on how much you want to spend per square foot, you will need to decide the area in which you want to build. Of course, you can keep close to the national average or below, although you will have to be more conservative with your finishes. If you select a new home spec build; a builder will usually charge double on basic construction materials. So even though a builder will say it’s a custom built home it is not fully custom. You will choose from materials they have pre-selected that they have received at cost from their vendors. For example; they will select (12) different tiles from the vendor, present those (12) negotiated options from the vendor to their clients and call it custom. A fully custom home is when you select the finishes with your architect and designer not choosing from the 12 options that a builder selected and negotiated with their vendors. If you want a truly custom home; the best way is to find the land of choice, hire an architect and designer, select the contractor recommended by the architect/designer (unless you have someone selected) then work with your interior designer on the appropriate finishes, color palette and furnishings for your home. Be realistic about furnishing your home not just building it. To furnish your home properly (factoring in mid-high end furnishings) figure $150 – $200 square foot. Of course you can factor in a lower cost per square foot but that depends on your preference. But, certainly coming to the end of the finish line and not giving the project the fullest potential with well suited furnishings would be quite disappointing.”
Thanks Lori and Elle! You can hear more from these amazing designers on their websites, www.lorimayinteriors.com and www.ellecoleinteriors.com.
You Control Cost
I have a few more words of advice and little bit of tough love before before we wrap things up.
I’ve mentioned this on my Facebook page (go over and “like” to receive more useful tips), but you have to be careful about cheap products. While large box stores may have faucets and tile that seem more affordable than your local providers, there may be something you don’t know.
It may not be the case for all local businesses, but I know that the store we use locally won’t carry any floor tile that is less than a grade 3. The really cheap stuff on the internet or at big box stores isn’t keeping that same standard. If they were, it would be the same price. (Don’t feel bad if you’ve used these items. We have. And you guessed it…the tile cracked out in a few years). Large box stores also sell plumbing fixtures with plastic fittings. Our local plumbers refuse to use such products. The fixtures they provide always have brass fittings. The faucets can be the same brand and finish. So when you get the higher bid, you wonder why the plumber’s price is higher. The truth of the matter is you are getting something that won’t have to be replaced in less than 5 years. Good plumbers don’t want that liability.
Pricing also varies from contractor to contractor.
My husband, who does meticulous work (his framing has to be within an 1/8 of an inch), often quotes $120-$160 per square foot for the majority of homes he builds. His price covers the main living areas of the home. Then he adds another amount for basements (if applicable) because basements are so much cheaper per square foot. When people are investigating those prices, they sometimes get alarmed. “But so-and-so says they can build for $100 a square foot”.
What’s the difference?
The other contractor may simply be quoting another way. He/she is averaging it out over the whole house, and probably with the most affordable (i.e. cheap) finishes available. Contractors and subs are always starting their pricing with the most affordable options (chrome fixtures, lower grade sinks, lower grade carpets and/or vinyl flooring), because they don’t know what you want yet. The question is, do you want those things in your home? Not usually, at least not entirely throughout.
If you do get a bid that undercuts everyone else by a large amount, be highly suspect. The contractor will either cut corners or use unethical, under-the-table payments for their crew. Either way, the consequences are grave, and you don’t want to be involved in such a scenario. If that situation happens, gather a lot more information before you jump for joy.
The moral of this story is:
Make sure you’re comparing apples to apples.
{our remodeled kitchen}
This requires a lot of planning and digging into nitty-gritty details. If this stresses you out, call up an interior designer to walk you through all the nuances. That’s what we’re here for.
Ultimately, the cost of your home will be up to you, not the contractor. I know it doesn’t seem like that sometimes, but it’s the truth. The size of your home and the finishes you put in will create a huge amount of variance in the cost…… so plan, plan, and plan some more.
A final thought about the term “cost”.
Instead of wondering what something will cost, maybe the best question is “what am I investing in”?
That changes everything.
When I switch my own mindset from “cost” to “investment”, my money starts moving in the right direction.
It can help in with anything, and works well when building a home. Instead of seeing dollar amounts flying from you checking account, you can start to consider the benefits of what you are purchasing. Maybe you’re providing a comfortable place for your extended family to sleep. Maybe you’re getting extra storage and a place to park the other car. Maybe you’ll finally get to have a master bathroom with its much needed privacy. Whatever it is, be grateful for this opportunity you are about to embark on. If anything doesn’t feel like an investment, re-think that decision and pick something that does have purpose and meaning.
As always, if you have any questions, feel free to ask! If this post has been helpful, please share with your friends.
xo,
Claire Jefford says
Hi Tawna, great post and very well written! You are so right about the apples to apples comparison.
When I source products for clients I tell them straight up about the differences in the quality of ‘big box’ stores vs local boutiques or the components that make custom furnishings better quality (and our local economy healthy).
It’s not to say that everything has to be one or the other, but managing expectations is key and educating your client allows them to understand the reasons behind these different price points. What they decide to do from there we have no control over, but at least we can feel confident that we did our job to properly inform them.
Interesting points about building in different areas too, thanks for sharing!
Tawna says
Thanks for stopping by Claire! You are so right….education is key.