The number one question I get from my clients is “what is the price per foot I can expect” for my project?  Because most of the open market is based off a number like this, it is easy to see why people come to this conclusion.  Real estate agents will often advise pricing strategies based on this premise when making an offer, but unfortunately, this does not represent the true cost of what it takes to build a project.  As general contractors, we don’t charge our clients by the square foot either, so it is important to understand what makes a project cost what they are.

In the open market, most development or “Speculative” homes are built as cheaply as possibly to maximize its value in the market.  There is no specific end user, so most houses are built to appease 90% of the market to present itself to a broader audience.  Thus, many homes are built to a similar level throughout any given region.  Developers are further beholden to the requirements of lending to meet certain cost to lending ratios in to provide these homes in the open market to assure there is a profit in order to get the financing to build the house.  The result is a bare minimum finish level that 90% of the market would take, and the character of each home is limited to what the market will bear.

As a General Contractor, we can’t charge by the foot because there are too many variables that make each project unique. For us to price a project specifically, we need fully engineered plans with every component specified down to the manufacturer, color, and model number.   And in ALL cases, for residential construction, it doesn’t make sense to get into that detail before you have selected your contractor due to the fact you don’t know at this stage every single detail that you want at this moment.  Price per foot is the broadest of markers when determining your budget, and it should be considered that as the broadest of measurements when deciding on doing a remodel or build your custom home.  If there is a lot of excavation work, additional foundation, electrical, plumbing, ect., you can expect there to a large difference in the price per foot for the project. Similarly, if you are looking at vacant land that has steep topography, wet lands, utilities available, soils issues, ect, you can expect a large difference in costs to build the house per foot.

Large Developers have economies of scale with their properties, so they can build at a very cheap price per foot in relation to the market.  They can drive the overall market price per foot with their communities and throw the whole market off from what real costs are.  The actual cost per foot for any project can only be determined when the project is totally complete.  So when you look to build a custom home or remodel your project, the most important question is not price per foot, but rather, whether or not you have a good report with the builder and their ability to steer you in the right direction.  They are ultimately your partner in getting your dream home or project complete, so focusing on this characteristic versus just price is what you are aiming for.