Estimating custom home building costs can be very tricky. There are many factors that impact the cost of building. Location, quality, materials, architectural features, plumbing fixtures and construction methods all play a part in the cost of a home. The best way to estimate average cost for your area is to call and ask different builders and contractors what their average home building cost per square foot is, or to find new homes similar to the one you want to build for sale and compare the square footage to the price. This is not entirely accurate but it will give you a decent estimate.
Understanding the variables in cost per square foot helps you make a wise decision rather than just going with the lowest price. It is unfair to compare unequal materials, or less skilled labor, and it can be a huge mistake to take the lowest bid without considering all the factors.
Location is an important variable in building costs. The average home cost in the rural South is about $80 – $90 per square foot, by the time it is completed and ready to move in. The average cost per square foot in California is $130 to $140 per square foot. A few Northern states are just as expensive as California, but most average around $110 per square foot.
Some of the differences could be accounted for because of the increased need for insulation in the North, or the need for earthquake resistance in California. Luxury items that are considered standard in California, such as a pool, a hot tub and more expensive cabinetry are less common in most areas of the country as well. The main factor in location based price variations is simply the difference in wages, and prices from one area to another.
Luxury homes can cost over $800 per square foot, while a cheap shell home can be purchased for as low as $20 per square foot. Of course shell homes are not finished on the inside. Finishing the interior yourself, bargain shopping on interior materials and using friends to help with different expert tasks may save you a lot of money, and bring your costs down to a total of more like $40 or $50 per square foot. It can be very satisfying to do your own home improvements, but occasionally the quality suffers, and it can take a lot longer if you are not accustomed to doing this type of work everyday.
Of course 2 by 4 studs, cost less than 2 by 6 studs and both are legal, but the difference in durability and R value when the wall is packed with insulation, are well worth the difference. Insulated concrete panels are even better insulators, and may cost less than lumber.
Any sort of pre-assembled panels save on the cost of on-site labor. Similarly modular homes cost less. It is much cheaper and faster to partially assemble a home in a factory, and then just put the pieces together on the site, than it is to build everything on your lot. A home built of panels made in a factory, can be assembled on your lot in one to three days. A modular home can be completed on site in less than a week. When compared to months of carpenter labor, these methods are much more economical. In some cases the results are superior, but in others they are considerably inferior. It pays to investigate the company which makes and installs the panels or the modular home in the same way you would any other contractors. Done correctly by the right people a panel built or modular home can save you a lot of money.
Hiring an architect to create a unique home just for you can cost $20K to $50K on top of the cost of building. It is much cheaper to use an existing floor plan, with perhaps a few minor changes. Architects charge more modest fees to change an existing plan, and often a builder can do minor changes without consulting an architect. For a luxury custom home an architect is a must, but often a top quality custom home can be created by using and adapting an existing plan.
A home with two eves, and a single straight run of roof, costs less than a home with a lot of interesting architectural elements. It is cheaper to build a square home, than one that is L shaped or Z shaped. It is also cheaper to heat and cool a square or slightly rectangular home. It is also obviously cheaper to build a smaller home than a large one.
Straight lines are traditionally much cheaper than curves, but some insulated concrete panel (ICP) companies make curves more affordable by selling arc shaped panels. The use of, ICP and other cement based construction, could change the face of architecture, and allow for much more unique structures in the future. Affordable curves are a great plus.
Bath rooms and kitchens are among the most variable costs, and cost more per square foot than the rest of the home. Adding a second or even a third bath will cost extra and drive up the cost per square foot. Expensive plumbing features such as hot tubs, custom showers cost more than a simple bathroom with a wall sink, standard toilet and the usual fiberglass tub shower combo. With costly plumbing fixtures it pays to shop for bargains.
If you are having your home built by a traditional home builder or contractor then one third of the cost of your home goes to materials, on third goes to labor, and one third goes towards your contractor’s overhead and profit. The contractor has a lot of overhead invested in necessary home building equipment, which he has to purchase and maintain. The home builder will also invest his labor in the process, as will his staff. For a year of even part time work, his fee is not unreasonable at all.
It is important to understand why some homes cost more than others while at least externally, they appear to be similar. Sometimes it is the quality of materials, other times it is the amount of on-site labor required. Estimating custom home building costs is much easier once you understand what makes a home cost more and what makes it cost less.