5 Factors That Affect Price Per Square Foot Saving You Money

"What price per square foot do you build at?"

We regularly get potential clients that call and give us the dreaded question, "What price per square foot do you build at?" This is a question we would LOVE to answer for them, but this is just not an answer we as custom home builders can give out without A LOT more information. However, this is how we have been trained to shop for homes though, because of the big subdivisions. The big builders know the exact land, utility, finish out, size, and cost of every aspect of the homes because they are the same over and over throughout any subdivision. This is not the case with custom building in the slightest, but the same factors apply to both styles of building. For this article we will be focusing on how this affects our clients specifically as custom builders

Factors That Affect Price Per Square Foot

  • #1 Porches and Garages are one of the biggest factors affecting price per square foot that custom clients usually cannot grasp. We as builders have 2 very big costs in homes that are affected by porches and those are the foundation and framing. Porches are not counted in your living square footage, but are counted just like square footage to builders when we are pricing your home. For example lets say a house with no porches had a $20,000 slab and $20,000 frame was 4000 sqft in size and sold for $600,000. That's $150/sqft with no porches. Now lets say we add porches all the way around the house, making your slab $30,000 and your frame $30,000, with no change in sqft. In this example this will raise the price of your home $25,000 with materials and builders fee to $625,000. That now has your home at $156/sqft with no addition to your living space.
  • #2 Land is a factor that especially comes into play when we get customers calling us and asking us the price per square foot of a home as compared to a subdivision builder. We build on any lot that is available, in all price ranges, so we can't give a bundled price per square foot for a home without knowing what your land cost is.
  • #3 Utilities come into play with the subject of land as well. Subdivision homes, most of the time, have all utilities available to be connected to at every site. With custom building we find that clients believe they have found an affordable lot, but don't consider the cost of septic if there is no sewage and a well if there is no water. A common number to plug in is $10,000 for septic, and $20,000 for a well. Keeping with our original example home, this would raise your home price to $655,000, with no increase to living square footage, and put the home at around $164/sqft.
  • #4 The size of the home is another very odd factor that affects price per square foot, and what we believe, makes it an inaccurate measure of value. The way we like to portray this is by explaining that no matter the size of the house, it is still always going to have a kitchen, garage, bathrooms, etc. So while decreasing a home will decrease it's price, in general it will raise its price per square foot because you are reducing the interior sqft. while still maintaining those essentials that will always be in a home. This is why buyers should always go by the total price of what they want and can afford rather than Price Per Square Foot.
  • #5 Material and Fixture selections can influence the price of your home, but not to the degree most customers think. Anytime someone is trying to lower their price per square foot they almost always go for plumbing and electrical fixtures first. Even if they took out every plumbing and electrical feature it would barely effect the price of the home compared to the other factors we have listed. However big things such as roof selection, cabinet selection, and window style and size, are factors that can definitely effect this category of factors. For instance metal roofs are generally DOUBLE the cost of your typical shingle roof.

Use These Factors To your Advantage!

These factors will be vital in your search for a new home so use them early and often! If you at first see a high price per square foot, do not fret, these tips will help you reach your target price. And don't forget, price per square foot isn't always the best method for choosing a home, always consider the final price, and if you are satisfied with the home, over the price per square foot metric.

Created By
matt jones


Created with images by 889520 - "drawing architecture plans architectural drawing construction project"

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