There probably isn’t a more complicated question you could ask! But if you are considering building a new home, this question is without a doubt the most important question you should ask. For a lot of contractors, it is one of the scariest questions we ever get asked. The infinite amount of ways to design and detail a house makes it too complex to have a simple answer to the question of how much it costs to build a new custom home. Most contractors are afraid to answer this question because they don’t want to scare a potential client and possibly lose out building on the new home. So contractors have a tendency to lowball the price with the thought that they will cross that bridge later in the relationship after time has been spent together or worse yet after the build has begun. The problem with doing things this way is that the relationship between homeowner and contractor starts off with lack of trust and honesty. The contractor-homeowner relationship is very similar to a marriage, in that two totally opposite partners, enter into a joint venture that includes major decisions, and a very large amount of money in most cases, so to begin the relationship with a lack of straightforward honesty is a recipe for failure. To illustrate: All of the construction bank loan managers that I have ever spoken to say that almost all of their contractor loans go over budget by at least 20%, with a good number going over budget 50% to 100% all because of fear that you, as a customer, might move onto the next guy because he told you a price you wanted to hear. My belief is that a good contractor is going to be brutally honest with you across the board otherwise, the relationship will ultimately fail. A good contractor should work hard to keep expectations limited to your budget.
So just how much does it cost to build a new custom home? Since the answer can be so complicated I will answer it based on the law averages that I see. Our typical build in southwest Missouri, in the rural areas that we generally build, almost always requires most, if not all of the infrastructure needed for a home. Well, septic and electric service, driveway, tree clearing. Our price per square foot usually includes all of those necessary things so that you can properly budget for them since you can’t build without having them. All of our new homes are built with very high-quality, insulated packages, high-quality HVAC systems, and a very detailed focus on quality practices for the foundation and framing. All of our homes have custom design cabinets, customized bathrooms, and laundry rooms. None of our builds have vinyl siding on them and we don’t use the low-end windows. The majority of homes we build have vaulted ceilings in at least the big areas and most of them have very nice outdoor living areas. While exterior finishes most certainly have an impact on overall square footage costs, the biggest influence is most certainly interior finishes. Interior finish selections can move the price per square foot needle dramatically. But with all of those things in mind, the average price range that we see building new homes is between $185-$300 per square foot of conditioned space I always tell a potential client to use $215 per square foot as a good balance number to use when doing some quick math on the cost of building a new home. The $215 per square foot of condition space will give you a great idea of the total overall cost of building a new custom home in southwest Missouri. So a 2000 square-foot home with three bedrooms and 2 1/2 baths would be in the range of $430K. Keep in mind that location can have a very large impact on the cost to build. Building on a flat piece of land versus a steep slope will make a big difference in foundation cost. The difference between flat land and slope could be as much as $35K to $75K depending on design and conditions. I hope this helps you in your decision-making process. Please feel free to reach out to me with any questions you might have. The next question you need to ask yourself is where am I at in the process? Our next article, 3 Basic Stages of Construction, Idea – Development – Implementation, will help you to identify where you are at in the process of building a new home and helps provide some direction on the steps you need to take to accomplish your goal of building a new custom home.