One of the first and most frequently asked questions we hear as a custom home builder is, “What is the price per square foot to build one of your houses?” As can be expected, potential clients think this number should be used as a gauge to determine what an entire house might cost them. They often talk to friends and other professionals with some sort of number in mind that would work for them.

Unfortunately, price per square foot is one of the most misleading things in this industry. Square footage analysis can be presented in a variety of ways, and if the potential client does not know how to read between the lines, he or she can go into their build with false expectations. This can result in eventual sticker shock once everything is added up.

Here are some potential aspects to look out for:

  • How is the house built? What is the finish schedule? How large is the footprint?
  • What are the development costs? What does the square footage multiplier include or not include?
  • What about soft costs and fees? Are building permits and municipal fees included?
  • Variable in pricing is immense, simply because of the many different options that can go into building a house.
    1. For example: 2×4 walls 24″ on center versus a 2×6 and 16″ on center framing; stone versus brick; Kohler versus Water Works; SubZero versus GE; asphalt roof versus slate; vinyl windows versus wood with real simulated divided light; floor load, concrete strength, waterproofing, size of the foundation, stackable square footage (for example: a large rambler versus rectangular type house where all the floors align with each other).
  • If you add certain rooms that are not finished, then your price per square foot appears lower.
    1. What are they counting: first and second floor, all finished floors and attic, unfinished spaces, garages, terraces etc.?
    2. Terraces, porches, garages etc., even though not counted, can skew square footage cost.

The examples and options are limitless, but the bottom line is: there is no universal guide to calculating square footage or the associated costs. There are so many ways square footage analysis can be presented and advertised. The realtors often use total square footage, finished and unfinished, whereas a custom home builder might use just the top two finished floors and maybe the basement.

If you truly want to stick to a budget, you could have your architect do a preliminary plan, or get one from your builder that is close to your preference. Put a preliminary specification and allowances on it, with as much detail as possible. Then, ask a builder what they will charge to build the house for turn-key, and give them the total amount you have to spend. This way you can save time and money, and not get marched down the wrong path.

What should matter the most to you, the consumer, is what your all-in costs are to move into your new home. If you want square footage analysis in the beginning to gauge your total cost, you need to dive deeper into what is included. The truth about square footage is that it is different for everyone. Make sure you and your custom home builder are on the same page at the beginning of your journey.