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Cost Per Square Foot – Busting the Myth About Home Building Costs

They say to never judge a book by its cover. I say never pick a builder by his cost-per-square-foot quote alone.

During my years as a home building coach, it was a constant battle trying to steer people away from the erroneous assumption that you can judge a project based upon its cost per square foot. My most successful clients came to understand that cost per square foot quotes are never cast in stone and real value (which is what they really were after) is judged by a different set of criteria.

Lifetime Value

It may seem obvious to say but it doesn’t hurt to be reminded: When you think of value, especially in homes, think about lifetime value. It pays to take a longer and broader view. For instance, the longer view says that if you pay 50% more for a roof that lasts twice as long, you’ve made a wise value decision. The same holds true for other items like windows, siding, heating systems, plumbing fixtures, floor coverings, etc.

In our changing world, a world that is growing more conscious of ecology and sustainability, the broader view says that it is often better to build รับสร้างบ้านราชบุรี smaller and more efficiently. Now, back to the cost per square foot fallacy.

Seven Influences on the Cost Per Square Foot

Many factors go into creating a cost per square foot estimate or quote. Market values even play a role. Wherever inflated quotes get business, they seem to thrive. The old “whatever the market will bear” concept cannot be ignored in any economy, even the one we’re in now.

Here are seven major influences that govern “cost per square foot” quotes:

1) Built-in Profit: The profit margin any builder adds to his quote is arbitrary and changeable. It may range from 10% to 50% (or more) depending on whether you’re talking about labor, materials, or the overall project itself.

2) Quality of Materials: The same size and style of home can be built for vastly differing costs simply due to the quality of materials used. The difference can even result in a doubling of the cost, all as a result of higher quality materials.

3) Quality of Labor: You get what you pay for. For example, do you want your neighbor to pull your wisdom tooth with his rusty pliers or would you prefer to pay a dentist? Need I say more?

4) Type of Structural Materials: There is a significant difference in the cost of structural materials. You must consider the materials themselves like Post and Beam, traditional stick framing, timber framing, cement walls, SIP panels, steel framing, and then there’s the varying cost of the labor to erect these different structures.

5) Number of Stories: The number of stories in a home as well as the complexity of design have a lot more to do with the cost than the size of the home.

6) Complexity of Foundation & Roofline: Similar to item #5, intricate foundation and rooflines can really add time and cost to building a home. People wanting bigger on a budget would do well to keep these two items simple and straightforward.

7) Cost of Permits & Fees: In most cases, it is common practice to include the cost of permits and fees in the cost per square foot quote. The difference from one building jurisdiction to another can be in the tens of thousands of dollars, easily.

 

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