The first thing people think about when building a new home is the cost. You may have seen a house plan cost per square foot to build calculator of some sort showing you the averages of building a particular home in the south, north, east, and west coast. Unfortunately, the house plans Cost Per Square Foot Method (CPSFM) tends to mislead uninformed home-buyers. When calculating square footage cost of say a 2,000 square foot home, you are able to compare the numbers on home builders who use this method to quote you a price to build. As you will find, the estimates can be very different.
Reasons why the House Plans Cost Per Square Foot Method is ineffective
Ineffective may be a bit harsh of a word to use in explaining this. However, the point is to inform homeowners they should not take these estimated soft numbers as a hard cost.
1. Home styles
A simple ranch house design with wood siding and a traditional home design with brick at the same square footage would not cost the same to build.
2. Home type
This is the true tale of why the house plans cost per square foot method is unreliable for homeowners. Take a 2,400 square foot house plan with two different owners for example. One owner wants a brick home with stainless steel appliances and plumbing fixtures, hardwood and tile floors, custom cabinets, and granite counter tops. On the other hand, the second owner prefers a brick front with siding on the sides and rear, the economy line appliances, chrome plumbing fixtures, carpet flooring, stock cabinets, and laminate counter tops. As a result, the difference in price would be several thousands of dollars.
The house plans cost per square foot method is not reliable because it isn’t a detailed report. The best way of getting a firm cost of building a home is to have your builder prepare a bid. This is a complete estimate done based on take-offs. Take-offs is a process by which home builders would disassemble a set of architectural house plans. Basically, the home cost is calculated in separate components. These components includes every item used in building the home. Some examples are lumber, concrete, masonry, windows, doors, appliances, drywall, finishes, mechanical and electrical systems. There is much more, but these are a few of the items that are included in a take-off.
Performing a take-off estimate is a lengthy task. Furthermore, it can take a week or two depending on the builder’s method. Some builders do it the old fashion way using a calculator, pencil, and paper. However, more builders are using computer software designed for take-off calculations in order to cut there bidding time significantly, improve price accuracy, and present you with an easy to read cost breakdown of building your home.
*** UPDATE ***
It has come to our attention that there had been a misunderstanding about the purpose of this article. As a result, we decided to explain a bit more to clear any confusion. Surfing the web, I came across a website that had published our aforementioned article. Here is an interesting response that grabbed my attention.
“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.
CPSFM vs Take-offs
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. There is the home plans cost per square foot method (CPSFM) and take-offs. Most people know about the CPSFM through presenting a basic brochure floor plan layout and elevation to a potential builder. The previous discussion was based on the fact that a homeowner has already decided on a home plan. Furthermore, the homeowner is ready to build that house. 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 as to why the house plans cost per square foot method doesn’t always produce the same cost on similar size homes.
Why builders use the house plans cost per square foot method
Generally, the cost per square foot to build a house method is a viable tool for builders. Their 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 that 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 difficulty, the finishes that the homeowner wants, and other issues.
Why homeowners should not rely on the house plans cost per square foot method
When a home builder quotes a cost per square foot to build a house, the owner may be thinking of high end finishes, details, and other variables. Without first discussing these issues with the builder, the homeowner sometimes purchase home plans based on that initial conversation. Then, the homeowner follows up with the builder to go into more detail. This is usually where the initial reliance on the cost per square foot method by the homeowner is troublesome.
In more cases than not, the initial estimate is at the homeowners budget or slightly over if not more. If the estimate falls under the homeowners budget, then the cost per square foot method has served it purpose. The cost per square foot to build a house method should be used as a guide only. It should not be taken as an absolute when you are in the market to build from your plans or home builder plans. The CPSFM is a viable tool if used properly within the context of early stage planning.
Kirya J. Duncan, Building Designer