Most Commonly Asked Questions Series- Question # 1
Question #1 – How Much Do You Charge Per Square Foot For a New Home in DFW?
Lingenfelter Custom Homes – In Business to Build Dreams
Written by Adam Lingenfelter
This is the most common question we hear from potential clients in early discussions and the answer is rather complex. There are 5 primary items that drive up or down building costs. Without considering all 5 it is extremely difficult to determine how much we need to charge per square foot on a project. We can give a range but without a full set of prints and detailed specs it is extremely difficult to give an accurate cost per square foot. If a home builder is willing to give square foot pricing with limited information, they are likely either inexperienced or they are not very flexible in the way they build. Let me explain in more detail below:
1. Land cost, land size and site-specific conditions – If we are building a home on a customer’s lot the land cost itself won’t factor into the build price but if we are selling one of our lots and the pricing is included in the total cost then the cost of the lot will affect the overall cost per foot greatly. A lot that costs $50,000 will affect the price of a 5000 square foot house by $10 per square foot. However, the price per foot goes up to $50 per square foot if that same 5000 square foot house is built on a $250,000 lot.
The size of the land will also affect how much fencing, irrigation and landscaping we will need so the larger the lot the more we will budget for those items. We also must consider things like how far are utilities from the house? How long and wide will the driveway be? Because that will affect the cost of the driveway. Then we must consider the site conditions as well. For example: Will this lot require retaining walls? Will this foundation need drop beams? Dropped brick ledge? Will the soil require piers? How much excavation is needed?
Other things to consider would be: Will this property require water and sewer connections that are not in front of the property? Will this property need a septic system or a well? What about culvert for driveway? There are many site related costs that need to be considered and all of them can affect the overall cost per foot of the build.
2. Type and complexity of the home – Things such as the shape of the home, vaulted ceilings, tray ceilings, wall heights and steeper roofs affect the cost per foot for a home. A house that is a simple box with 4 corners and has a simple hip or gable roof will be significantly less to build per foot than a home that has 24 corners, multiple hips and gables etc. If a home has 16’ ceilings it will cost more to build than one with 8’ ceilings because those walls will have twice the wood, twice the insulation and twice the drywall and paint. The structure type and style are a big factor in the overall cost per foot.
3. Components – Items such as swimming pools, circular driveways, unfinished attic space or storage, covered patio space, covered porch space and the garage size all affect the cost per foot of the home. Those items all have costs associated to them but none of those items are in the actual AC footage of a home. However, they still drive up the AC cost per foot.
Also, room types affect the price per foot. A seven bathroom, four thousand square foot home will cost more than a four bathroom, four thousand square foot home with the same finishes because bathrooms and kitchens are the most expensive rooms in the house typically (excluding technology such as media rooms). There are items such as countertops, tubs, showers, mirrors, shower glass, tile, plumbing, extra lighting, fans, cabinets etc. which drive up the cost per foot on houses with more bathrooms.
4. Structure Quality – There are many ways to build a home. We will go over these in more detail in future articles and just briefly mention a few things here. Many builders use 2×4 exterior walls. As a standard we use 2×6 exterior walls which has 37% more wood. I will explain in a future article why we do that but for the purpose of this article I just wanted to acknowledge that the additional wood adds an additional cost of roughly 37% to the exterior walls. We also use 7/16 Zip wall as a standard and many other builders use ½” foam or thermo-ply instead. There is a cost per foot increase with these upgrades. We also use additional Simpson safety hardware in our homes that include: bearing plates, hold downs, wall to wall ties and hurricane clips. Many builders don’t use those items or only use some of them. We also do things such as fully encapsulated foam in the walls and rafters which gives us conditioned attic space. There is additional cost in the insulation as well as additional cost in the HVAC system because we need to upgrade the HVAC to a more efficient system because the attic space doesn’t have fresh air because it is conditioned space.
5. Finish Quality – This is probably the item that most buyers would recognize as an item that would affect the price per square foot, so I won’t spend much time discussing it. Countertops for example can be done with Formica, tile, granite, quartz and so on. Formica is much cheaper than quartz so when figuring cost per foot the finish is very important. Items such as doors, windows, stairs, countertops, flooring, roofing, exterior cladding, lighting fixtures, plumbing fixtures, appliances, fireplaces, media (AV) etc. will affect the overall price per square foot in a home build based on selections made.
Asking a home builder what range they build in is not a bad question but just understand that there likely won’t be much value in their answer because it is just a number that isn’t tied to anything concrete. Also, there are builders that will give a starting point price, but that price will likely be much lower than what your actual price would be. Building custom homes is a complex process and many details determine the overall cost per square foot. Instead of asking what price per foot the home builder charges I would recommend asking what price range they typically build in to determine if this is a builder that you want to have deeper discussions with. Once you find one or two you feel comfortable with then you can invest the time needed to get firm pricing.