By M A Untch
Trying to determine how much a custom home will cost that will suit your dreams and desires can be quite a challenge. It also depends on who you talk to, and are they giving you the real numbers, or low balling the cost as a sales pitch to draw you in. One thing I have found in my 42 years of experience in the construction industry, is that I place little or no value on a cost PSF basis for custom homes. This basis is fine for production builders that are duplicating the same few home designs over and over again utilizing the exact same specifications on every project….Custom homes however are much different….
Typically, PSF costs of construction is determined by dividing the cost by the SF of ONLY the air conditioned space (for warm climate areas)….or …heated space for colder climates. That formulae would include some algorithm for what would be considered “ other space “, which would have to include the garage area, porches, Lanais etc….. If the homes are pretty much all alike with the “other space “areas comparable a SF cost basis would be fairly accurate and only require adjustment for inflationary costs. This could be a way to somewhat compare one production or tract builder to another…..but unless you are very skilled in construction practices and procedures it will be almost impossible to determine why one builder has a cost of $ 20 PSF less for his product than another.. …Are his profit margins just higher, or is his quality of product much less….?....good question….maybe his “ other space “ areas are twice a large, such as a 3 car garage, golf cart storage bay, oversize Lanai etc…..there are many other items that effect cost….below I will mention a few:
# 1 SOFT COSTS OR INDIRECT COSTS
These are costs that are not directly associated with the actual brick and mortar hard construction of the home. These costs however, are real costs and will calculated in with the overall building costs. These costs are “regionally “specific, and include the following:
- Plan design & engineering
- Survey costs
- Energy Calcs
- Utility tap fees…ie…sewer-water-septic –well
- Building Permit & Impact fees
- Testing services….site fill- compaction etc….
These costs vary geographically as well….is the location of construction in a Flood Zone..?...is the location in a high wind hurricane zone…?....is the property a developed lot, or raw acreage…?...the list goes on..
Soft costs can be substantial and can range between $ 10,000 to over $ 30,000
Note that production builders duplicating the same plans over and over again and within a developed community will have a much lesser cost base for these cost items. The actual plans and engineering have been done and submitted many times before…..if you don’t mind having the exact same home as many of your neighbors this may be fine for you. The utility tap fees are usually tied in with the lot purchase or spread out over a period of years that you will pay with your real estate taxes or CD fees….this is one area where production homes could be $ 20 to $ 25 PSF less than a custom home…
# 2 FLOOD PLAIN LOCATION
If the property you are going to build on is in a Flood Plain area, the site development costs will be greatly affected. The house building pads will need to elevated by 2-3 ft pending the flood zone. Elevated building pads require many loads of compacted fills and usually taller foundation and stem wall construction…all adding costs that could amount to $ 10 – 15 PSF
# 3 CONSTRUCTION MATERIALS USED
This is a very detailed area and I could write pages on this subject….however, I will use only one simple example and I think you will understand my point. Keep in mind, this is ONLY one example…there are hundreds….
If a builder uses ½ “ OSB ( particle board type material ) for his roof sheathing, his product cost factor would be about $ 10 per sht. Upgrade that spec to 5/8” plywood and that cost goes to $ 22 per sht. Upgrade that to the best energy efficient roof shtg which is 5/8” Solar Ply and that cost rises to $ 26.50 sht. Base comparison on an average 2,000 SF home and the cost differential between OSB and 5/8 Solar Ply is about $ 2,500 with tax….that one item alone amounts $ 1.25 PSF.
# 4 DOORS AND WINDOWS
This category can be a huge factor affecting costs. The quality, size and energy efficient ratings vary greatly in price. Using PGT XL 70 solar ban insulated glass with Impact resistant glazing in all the exterior doors, sliding glass doors and windows will cost much more than using a lesser quality product, non-impact glass and panel shutters….this could account for about $ 3 PSF in cost difference..
# 5 INTERIOR FINISHES – FLOOR COVERINGS
Again….one example should give you the idea…
Let’s take a standard bedroom of 200 SF and compare just the flooring costs for that one room….
- Carpet the room using a $ 30 per sq yd product and the cost would be $ 660 ( 3.30 psf )
- Tile the same room using a cost factor of $ 6.50 psf material & labor $ 1,300
- Install a quality wood flooring in that room at $10.00 psf and the cost is $ 2,000
Now you see why builders have a lot of carpet in their cheaper “base price“ of the homes…lower the SF cost, attract you in…..and then…. hit you with EXTRAS…..
# 6 ALLOWANCES PROVIDED
Allowances are usually provided for plumbing fixtures, lighting fixtures, cabinetry, appliances, flooring etc……
We have seen some ridiculously low Allowance numbers built in the price of homes. A savvy client should dig deep in to the fine print of any home price to determine if the Allowance amounts are comfortable and reasonable. You saw prior how flooring can affect costs, just think about the cabinetry package……costs can vary from $ 20,000 to $ 60,000 in this category….
In closing….just the few items mentioned in this blog can have an effect to cost factors by as much as $ 40 PSF…..that is about $ 80,000 on a 2.000 SF home;;;;
Maybe that “Custom Builder “you talked to and liked, but was too expensive, is NOT really that expensive after all….….remember the old sayings that will always hold true:
“You always get what you pay for “
“If it seems too good to be true….it is …”
M A Untch Enterprises Inc. CBC1254369 Fl Lic
2197 Randolph Dr
Fort Myers , Fl 33905
Tel 239-690-9874
Fax 866-440-1180
Email mau@raex.com
Website: http://www.mauntchent.com/
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