House plans cost per square foot myth, Part II

Last year, I wrote an article titled "The cost per square foot myth" explaining the misconception of this method by homeowners. In surfing the net, I came across a website that had published my article and a interesting response that is seen below.

"This author clearly doesn't get it. Yes, a take-off is required for estimated cost on completed house plans. But for those who don't yet have completed house plans, this doesn't work.

The author doesn't seem to understand the idea that different levels of estimates are needed at different stages in the game. At an early stage, when one is considering what type of building to build, or whether they can afford it, the expense and time of a full take-off is idiotic. In fact, take-offs are usually done when a project is ready to build, making them useless for someone who hasn't decided what to build. This author doesn't present an alternate form of estimate for the undecided home builder who doesn't have plans.

You think a person who works in Architecture would understand the difference between a conceptual estimate and a full construction estimate."

Comment by B.S. - January 2, 2007 @ 1:53 pm

In light of this response, I will elaborate little more on the subject. There are only two levels of estimates that I'm aware of, the cost per square foot method (CPSFM) and take-offs. Most people know about the CPSFM through presenting a basic brochure flooplan and elevation to a potential builder. The previous article on this subject was based on the fact that a homeowner has already decided on a homeplan and is ready to build. So at that stage, take-offs are the best way to fine tune the cost of building the home. The goal was to educate the average homeowners on a basic level to give some understanding as to why the cost per square foot method don't always produce the same cost on similar size homes.

For the builders, the cost per square foot is a viable tool because there experience in building homes give them the knowledge to estimate a soft number to build per square foot based on the materials, finishes, and other variables they are accustomed to using in their projects. The homeowner sometimes take the estimate as a hard number. In other words, if a builder quotes $125.00 per sq ft for 3,000 sq ft (totaling $375,000), the homeowner should expect that number to go up or down when the builder has more detailed information about the plan (a full set to review), degree of design diffculty, the finishes that the homeowner wants, and other issues.

When a home builder quotes a price per square foot to build a houseplan, the owner usually have different concepts of material, finishes, and other variables. Without first discussing these issues with the builder to get on the same page, the homeowner sometimes purchase their plans based on that initial conversation. The homeowner then follow up with the builder to go into more detail as to what they are expecting in the finished product. This is usually where the initial reliance on the cost per square foot method by the homeowner is troublesome. In more cases then not, the initial estimate is at the homeowners budget or slightly over if not more. If the initial estimate falls well under the homeowners budget, then the cost per square foot method has served it purpose quite well for the builder and the homeowner.

In any event, the cost per square foot method should be used as a guide and not an absolute when you are in the market to build your next home. If used properly within the context of early stage planning, the CPSFM can be a viable tool for you as well as your builder.