|
"It is unwise to pay too much, but it is worse to pay too little. When you pay too much, you lose a little money-that is all. When you pay too little you sometimes lose everything because the thing you bought was incapable of doing the thing you bought it to do. The common law of business balance prohibits paying a little and getting a lot-it cannot be done. If you deal with the lowest bidder, it is well to add something for the risk you run, and if you do that you will have enough to pay for something better."
John Ruskin
English Philosopher
1819-1900
Determining the price of a custom home is far different from pricing any other purchase a person will make in their lifetime.
How does one price a work of art before it is even created? That is the challenge you face.
Our world is price-oriented rather than value-oriented. From cars to real estate listings to the penny candy (now 25 cents each) to our groceries and clothes virtually everything we buy has a price tag. We use that tag to evaluate our desire and ability to purchase that item and to make a purchasing decision.
Custom homes are different. No one knows the exact price until the home is constructed. Hundreds of price-related decisions will be made during the process.
When beginning the search for a custom home it is imperative to work with a very broad price range in mind and then to continually work to narrow that range during the research process until you reach a "comfort level" range that works for you. (See Illustration)
For some people this comfort level range may be 2-3 percent, for others it may be 5-10 percent. To narrow the range, more information, research and planning need to be done in advance. If you are comfortable with a broad range, the more flexibility you will have as the project unfolds.
This section contains information about how your decisions will affect the price of your home. You will understand some of the questions that need to be addressed and the choices you must make in order to make a well-informed decision. This list is not exhaustive, but it is thorough enough to provide "food for thought" as you decide how to proceed.
Above all it is important that you select reliable, honest, experienced teammates and partners as you prepare to embark on the journey of a lifetime.
A custom home can not be priced by the square foot any more than by the pound. Square footage and weight are only two of the items involved. Shape, volume, exterior materials, type of flooring, cabinets, etc. make up the price. Divide that price by the number of square feet and you get the price per square foot.
1. The Dollar Per Square Foot Fallacy
If a home has 27 corners, 5 strange angles, 20 foot ceilings, a subzero, Jacuzzi, marble, wood interior finishes, 4-foot wide hallways, massive stone fireplaces, covered porches, large glass areas, etc. the price per square foot will obviously be higher than a four corner, two story home. The way square footage is measured varies. Generally it is the company appealing to ultra price sensitive purchasers who will resort to misleading tactics about square footage costs. If you begin your shopping trip with price per square foot comparisons be sure to limit the amount of weight or importance you place on them. It is simply not a relevant measure of materials or labor costs.
2. Level of Amenities Selected
You can choose "moderate," "high" or "luxury" levels of amenities. Many people choose to mix and match. Perhaps you have "high" levels in the kitchen and only "moderate" in personal quarters or vice versa. Some will go with all or some "low" levels, planning to upgrade them later. This is especially true with things like floor coverings, cabinets and counter tops which tend to date a house after a few years anyway.
3. The Basic Building System and Materials Type
The more that is "pre-done" the more closely you can estimate the price earlier in the process. Most fine custom homes are a combination of site-built and factory-crafted components (e.g. cabinets). The basic building system and type is the most permanent part of the home so it makes sense to invest in higher quality materials. As discussed previously, the more temporary things like fixtures, carpets, etc. can be changed later. The basic structure is there for the life of the house. It doesn't make sense to marginalize the structural, floor, wall or roof systems as replacing/upgrading them later is unlikely.
4. Site Related and Building Code Considerations
Accessibility, terrain, weather, local code requirements, snow loads, wind loads, power, water, and a number of other considerations that are site and job specific will impact the price of your home.
5. Time and Money Considerations
If you have unlimited time and money you can have anything and everything you want. Most of us, however, are making compromises to one degree or another. Even a two million dollar home can go over budget and need to be cut back a little. If you are less than candid about your real budget your goal will be more difficult to achieve.
6. Design Style and Complexity
Even the angles and wall heights mentioned before can be done with relative ease compared to a complex intertwining of roof types, styles and pitches. When you have hips, valleys, gables, dormers and other "interruptions" in a roof line you increase the complexity...thus the amount of design calculations, labor and materials increase substantially. Exceedingly long spans and open areas are also very costly, however, these architectural complexities can make a home unique and wonderful to live in and enjoy.
7. Business Acumen of Owners and Ethics of Builders
"Low-balling" is the practice of determining what price range a homeowner "wants to hear" and telling them that they can have the home they want for that price. A homeowner has taken a decisive, irrevocable step once he or she is under contract. The change orders, "by the ways," contingencies and unrealistically low allowance items are re-visited. The homeowner faces the choice of downsizing or downgrading the home, upgrading the budget, or aborting the project. This is an insidious and pervasive pattern that develops over time. None of these are good alternatives and often derive from the greed, lack of education or perhaps the naïveté of a homeowner as integrity and ethical shortcomings of the builder.
A. Deal with a company with a proven record of trustworthiness and reliability.
B. When custom homes are priced realistically, there is a greater chance of coming in on budget.
C. Understand and agree that your builder needs to make a profit.
D. Be realistic. If someone is cutting prices they are cutting quality or service, unless there is a verifiable economic rationale. If it sounds too good to be true...
Our Garden Homes Sales Consultants are trained and experienced new home consultants. Their services are part of the Garden Homes home difference. Our corporate mission is to enter into "win-win" relationships that assist serious-minded people to accomplish a mutual goal: a home that will delight and serve the family's needs for generations to come. Let's work together to make your dream home a reality.
Can It Be Built Cheaper?
ABSOLUTELY!!! Anything can be built cheaper. But beware of the contractor who assures you, "I can do a home just like it cheaper." Cheaper, in the long run, can be quite costly.
If a builder says they can build the same home cheaper, find out how. What is the specific rationale? What efficiencies do they have on their method of operation that makes this possible? Claims like these are usually very short on specifics. It is easy to be misled when someone tells us what we want to hear.
The key to a successful home building project is to work with respectable and trustworthy builder.
Building a custom home is a collaborative effort. Throughout the process you will make hundreds-even thousands- of decisions, and each will affect the time and budget of your project.
A Garden Homes Sales Consultant is dedicated to working with you as a partner on your new home. We don't simply take orders, deliver lumber, collect our funds and abandon you. We work with you every step of the project, from the first rough sketch until you occupy and enjoy your new home.
If you've never built a home, you will find our design service invaluable. If you have experience building a home, you already know why design is so important.
Garden Homes looks forward to partnering with you as we make your dream home a reality.
Enjoy the journey...AND the destination!!!
