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How Much Does it Cost to Build a House?

This is a question we get at RGB Custom Home Builders every day! Many people have the notion that there is a general price per square foot that we can quote them over the phone that can help them to understand how big of a home they can build given their particular budget. Unfortunately, estimating a new home has far too many variables to give a price per foot answer with any reliability. As an analogy, you can imagine that the cost of a new car can range from $19,000 to $300,000.  New homes are not so very different.  So, what makes a new home more expensive to build, or conversely, less expensive to build?

If you were to guess what makes a house more expensive to build you might say interior finishes and you would be partially correct.  Granite countertops are more expensive than say Formica.  You will spend more for a jetted tub than a plain tub, and more for a custom tile shower than a fiberglass shower.  Hardwood and tile are also more expensive than carpet and vinyl.  Exterior stone and stucco or brick also add to new construction costs.  These items, most people already know, and expect to pay more for.  What people might not quickly realize is that the more “corners” on a house, the more it costs for concrete, lumber, and framers due to the waste created by all the cuts and angles.  It will likely cost more for your roof and siding as well.  Another feature that makes a home more expensive is how much of the home is on the 1st floor.  An extreme example is how a ranch house will always cost more than a two-story home to build when you look at it from a cost per foot basis.  Why is a ranch home more expensive?   The answer lies in the cost of what we call the “footprint” of the home.  The amount of foundation and roof you need for a 2,000 square foot ranch is double the amount you need for a 2,000 Square foot two story home.  Foundations are another varied cost.  A full basement is quite a bit more than a crawl space to construct from excavation, concrete, block, stairs, and insulation all contributing to the bill.

Another variable in new home construction costs is the region in which the home will be built.  Just like it costs more to live in New York City than it might to live in a suburb of Iowa, labor costs to build your new home will also vary by area, as well as construction material.  If you are going to build a home close to where brick is made, in Oklahoma for example, you can buy and install brick at a very reasonable cost.  But if you live farther away you can expect the expenses of shipping brick to drive the price to add brick to your home way up.

The homesite you will be building on also contributes to your added costs or your cost savings.  Central water and sewer are oftentimes less expensive than well and septic costs.  Building and paying for a driveway is completely dependent on where you place your home within a lot which makes it a widely varied cost.  Your lot might have a degree of slope that you would rather smooth over by adding fill which is always an extra cost.  One of the more expensive things to impact a home site’s budget is in the event that you need to blast to remove the rock in order to get the foundation in.  Blasting is very expensive and the amount and type of rock on your proposed homesite will determine if blasting is needed.

Something else you want to consider when looking at the cost to build, and in particular when you have a quote from a builder is what is included in the quote?  Some builders hide costs that will ultimately be bourne by the customer like building permits.   How about upgrades that you know you will want?  Will you be charged extra to bring electric to the homesite?  Are the allowances included for things like well and septic reasonable, or will you be hit with a big “extra” later?  This is where working with a reputable builder becomes important.

So, the next time someone tells you that they charge $115 per foot to build a new home……be wary!  Building a new home just does not work that way.

This is a question we get at RGB Custom Home Builders every day! Many people have the notion that there is a general price per square foot that we can quote them over the phone that can help them to understand how big of a home they can build given their particular budget. Unfortunately, estimating a new home has far too many variables to give a price per foot answer with any reliability. As an analogy, you can imagine that the cost of a new car can range from $19,000 to $300,000.  New homes are not so very different.  So, what makes a new home more expensive to build, or conversely, less expensive to build?

If you were to guess what makes a house more expensive to build you might say interior finishes and you would be partially correct.  Granite countertops are more expensive than say Formica.  You will spend more for a jetted tub than a plain tub, and more for a custom tile shower than a fiberglass shower.  Hardwood and tile are also more expensive than carpet and vinyl.  Exterior stone and stucco or brick also add to new construction costs.  These items, most people already know, and expect to pay more for.  What people might not quickly realize is that the more “corners” on a house, the more it costs for concrete, lumber, and framers due to the waste created by all the cuts and angles.  It will likely cost more for your roof and siding as well.  Another feature that makes a home more expensive is how much of the home is on the 1st floor.  An extreme example is how a ranch house will always cost more than a two-story home to build when you look at it from a cost per foot basis.  Why is a ranch home more expensive?   The answer lies in the cost of what we call the “footprint” of the home.  The amount of foundation and roof you need for a 2,000 square foot ranch is double the amount you need for a 2,000 Square foot two story home.  Foundations are another varied cost.  A full basement is quite a bit more than a crawl space to construct from excavation, concrete, block, stairs, and insulation all contributing to the bill.

Another variable in new home construction costs is the region in which the home will be built.  Just like it costs more to live in New York City than it might to live in a suburb of Iowa, labor costs to build your new home will also vary by area, as well as construction material.  If you are going to build a home close to where brick is made, in Oklahoma for example, you can buy and install brick at a very reasonable cost.  But if you live farther away you can expect the expenses of shipping brick to drive the price to add brick to your home way up.

The homesite you will be building on also contributes to your added costs or your cost savings.  Central water and sewer are oftentimes less expensive than well and septic costs.  Building and paying for a driveway is completely dependent on where you place your home within a lot which makes it a widely varied cost.  Your lot might have a degree of slope that you would rather smooth over by adding fill which is always an extra cost.  One of the more expensive things to impact a home site’s budget is in the event that you need to blast to remove the rock in order to get the foundation in.  Blasting is very expensive and the amount and type of rock on your proposed homesite will determine if blasting is needed.

Something else you want to consider when looking at the cost to build, and in particular when you have a quote from a builder is what is included in the quote?  Some builders hide costs that will ultimately be bourne by the customer like building permits.   How about upgrades that you know you will want?  Will you be charged extra to bring electric to the homesite?  Are the allowances included for things like well and septic reasonable, or will you be hit with a big “extra” later?  This is where working with a reputable builder becomes important.

So, the next time someone tells you that they charge $115 per foot to build a new home……be wary!  Building a new home just does not work that way.