Page 7 - What You Need to Know to Find the Right Builder

Chapter 1

What is the cost per square foot of a home?

It’s a question that causes more confusion than clarity. Two homes with
roughly the same square footage of about 2,000 may have very different square
foot prices. One might be $140/sq. ft. and the other may ended up at $275/sq. ft.
Each home has the same amount of living area, but the cost was impacted by the
individual design differences, options, and quality. One home may have a wet bar,
steam shower, sauna, hot tub, extra large deck, challenging roof systems which

includes a few dormers, a large patio, or a masonry fireplace, etc. while the other
does not. The square footage of both homes might be the same, but it should be
obvious why one home would be more expensive than another when talking
about price per square foot.

The cost-per-square-foot query is a common one, and certainly
understandable. It’s human nature to try and distill complex concepts into simple
scales to assess value. It’s an approach that certainly works for common
household items such as paper towels. Supermarkets help consumers decide
which package of paper towels is the best buy for them, based on price sheet,
number of rolls per package, and other features like colors or towel size. Pretty
basic, right?

However, it’s when you start to apply the cost per square foot calculation to a
complex product that it becomes too simple. Ultimately, it’s not a good strategy
upon which to base an important and expensive purchase. Homes, with their
multiple variations on design, variations in quality of components, labor costs, as

well as many other factors are probably the last thing that should be priced based
on cost per square foot.

Yet, the question persists. The concept is appealing to builders who market based
on price alone: trumpeting deep discounts with lots of fine print in the contract.

To those of us who believe that it’s important to educate our clients—as well as
provide a quality home—this simple question is one that is extremely frustrating,
because it cannot be answered simply. “The way I answer the price per square
foot question is that “it’s really up to you”.

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