The Myth of the “Standard Price” in Custom Homes

Posted by Bob Wiedenmann

The-Myth-of-the-Standard-Price-Custom-Home.jpgHere’s the thing about custom homes: everything about them is tailored to your needs and preferences. From the floor plan to the final bill, by their very nature, these types of homes are unique, and that means that there’s simply no such thing as a standard price.

However, while you wouldn’t want a one-size-fits-all home, most people do want some idea of what their dream home will cost, if only for budgeting reasons. Here are a few things you need to know about how pricing custom homes works – and how you can figure out what yours will cost.

Asking for a Budget Price Is Okay…

Many custom homebuilders, while unable to provide you with a concrete price without going through the full estimating process, will be able to provide you with a per-square-foot price range based on similar homes built in the area in recent years.

The range will usually be fairly broad, so there will be a big difference between the bottom and the top end, but if you have an idea of how many square feet you want, you can figure out roughly what you will be looking at.

… Just Don’t Expect Anything in Writing

When you get a budget price on custom homebuilding, it’s a very rough figure. It’s not something the builder will be legally bound to and not something you could take to a bank or financing house in order to obtain a mortgage or loan.

If you want something more definite, you’re going to need to go a little further into the process.

Getting an Estimate

If you’ve had a ballpark number per square foot for the home you’re thinking about and you’re still interested in going ahead with the custom home process (or even additions or renovations), the next step is to request an estimate. Estimates or quotes are more detailed and firmer than budget prices, but there is a little more work involved in calculating them. Here’s a rough outline of what this process involves:

  • Your contractor will ask you if you have a floor plan in mind. In the case of custom homes, some may already have floor plan options you can choose from and customize.
  • You will need to choose finishes, fixtures, kitchen countertops, flooring and other design and décor items.
  • Your contractor will use all of the information you have provided to compile an estimate or quotation for the custom home or renovation you want to build. This estimate will be something you could use to secure financing.
  • Estimates are calculated to be as close as possible to the final cost, but they can still change over time. If you make changes to the design, if there are delays not caused by the contractor or for a handful of other reasons, there may still be changes to the final price.
  • Although changes are rare, your contractor will often build in a contingency factor to cover them.

Confirm Details and Start Building

Once you have an estimate on your custom home, all that’s left to do is confirm you’re ready to go, and you can get started on that dream home.

As you can see, there’s a lot that goes into pricing a custom home; the price of custom homes will never be standard. But since you don’t want an “off-the-shelf” home, you shouldn’t expect standard pricing. When you want something unique, tailored and beautiful, there are always going to be a few more steps, but it will be worth the added time and effort.

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Tags: Remodeling Tips, Building a Custom Home

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