Just bought your book and think it is great. I’m wondering if this statement, currently on your website, is true today: “You should be able to build anywhere in the USA for $80.00 to $110 per sq ft. for labor & materials.”

It seems rather low to me. We’re looking at housing in Western North Carolina and some of the new construction is $200/sf+ for what we think is mid-level construction/finish/appliances.

Ron

Hi Ron,

Here is a chart with the latest per sq ft building costs stats from NAHB (National Association of Home Builders).

It provides an instant look at both the Median average cost per sq ft. and the Average cost per sq ft.

Median average cost per sq ft = 1/2 of all the homes cost more to build and 1/2 cost less.

Average cost per sq ft = total per sq ft costs of all new houses built divided by the number of new houses built.

Building costs were actually still going down in 2008, and according to NAHB updates, in 2009, building costs were going down in almost all areas.

Click on the logo to see chart:

As you can see, $80 – $110 is above average.

I don’t have enough information from you to determine what the $200 per sq ft you refer to actually means.

I have a feeling that $200 per sq ft is a quote from a builder who has his profit and overhead built in, or is a retail price for a finished house that has land cost (price) included as well.

In Charlotte, NC, a city I am very familiar with, $200 per sq ft is pretty heavy with amenities.

Of course, it is dangerous to generalize. Home building costs per square foot depend on many variables, including; size, home design, how good a shopper you are, difficulty in building site access” (i.e. the top of a NC mountain), availability of labor and/or materials, just to name the major ones.

Whatever cost per sq ft you end up with should always be measured against what the finished value will be in the locale where you are building. A good Realtor (or an appraiser) can tell you if you are overbuilding (cost wise) for the area.

Overbuilding is not wise and unless you are paying cash for the house, you won’t be able to borrow as much money as you would probably like to borrow.

Construction Lenders, now more than ever, are very, very resale conscious. You should be too.

Visit my “Getting Started” page on http://www.byoh.com/ and play with the cost to build calculator.

Hope all this helps,

Carl

This one level home is perfect for a Sunbelt region. Steep pitched hip roof and stucco walls add to the curb appeal.

A Lanai (a veranda or roofed patio) and an isolated guest or teenagers bedroom with an adjacent full bath make this house plan a winner.

• 4 bedroom, 3 bath, 2-car Front entry garage
• Total Square Feet: 2501
• Footprint: 67ft. 4in. x 74ft. 8in.
• Standard Foundation: Slab
• Exterior Stud Type: concrete block 1st Floor Square Feet: 2501
• Estimated Cost To Build by HDA in Postal Code 75201 is $300,120, or $120 per sq. ft.
• This cost includes a General Contractor’s profit and overhead
• Estimated Cost to build this House using  the  “Residential Building Cost Calculator”, from Craftsman Book  Co is $287,200, or $115 per sq. ft. including the General Contractor’s markup of $33,394
• These costs do not include land or land development costs

HousePlansAndMore.com by HDA, Inc.PLAN # 592-055D-0500

You should keep in mind that the cost to build for this home plan, or any house plan, can vary considerably depending quality of materials selected, and on actual bids from builders.

Until you actually start getting bids from General Contractors it will remain approximate.

Carl

Hi Richard,
Nobody retains the unused monies.
The normal and most accepted way allowances are used is as follows in an example of a $300,000 contract price, including a $10,000 appliance allowance.

Appliances come in at $8,000.
Now the contract price is $298,000.

Or, Appliances come in at $12,000.
Now the contract price is $302,000

I’m going to assume that there is a conflict that you are in the middle of, so I am going to explain to everybody the how and why of building allowances (or contractor allowances) and contractor bids

Allowances are used in new construction or remodeling to allow a General Contractor (Builder) to arrive at a contract bid (price) without having to wait for the homeowner (you) to select all the finish and/or decorative materials (and often labor) and products that most homeowners want to select. These items would include, but not be limited to, cabinets, floor covering, appliances, wall coverings, light fixtures, plumbing fixtures, etc.

They should NEVER include structural items, such as foundations, framing, windows, wiring, HVAC, insulation, concrete work, etc., as a homeowner would not know what would constitute a fair allowance for structural items.

A home owner can and should shop early in “the game” so that he or she knows how much allowances should be for decorative and finish materials and products.

The following is from my “Home Building-Budget-Allowances” page on Build Your Own House.

“A General Contractor may supply these allowance numbers based on what he or she feels is adequate, but it is up to the buyer to investigate the dollar amount of each allowance for each category that has an allowance to see if it is enough money to adequately satisfy their “consumer needs.

In other words, the buyer(s) MUST “shop” BEFORE signing the contract.”

We’ve been researching costs to build an addition to our house here in Honolulu. Your site doesn’t list Hawaii, so I thought I’d contact you.

In discussing with architects and draftsman, we’re getting widely ranging estimates of $100- $350 per sq foot for an add on of a free standing 1000 sq foot residence over our current lanai. Any input is appreciated or info on how to get an accurate estimate.
Mahalo!
Don

Aloha Don,
(Note to readers: I had to look up Mahalo It is an Hawaiian word meaning thanks, gratitude, admiration, praise, esteem, regards, and respects)

Unfortunately, you did not give me any of the particulars of your planed addition that affect (greatly) the cost of building a home addition.

Photo of a Lanai courtesy of LA Times Crossword Corner

So, I ran the cost to build calculator found on my “Getting Started” page for building a simple 1,000 sq ft addition in the city of Honolulu.
I used the “Quality Class” # 6, building to minimum code (cheapest), all the way through (No HVAC, only a wall unit A/C), and came up with a total cost of $93,283 using a room addition contractor (General Contractor). That obviously, comes out to $93.28 per sq foot.

You could easily triple that cost depending on the quality of materials and design you choose.

As I have stated in previous posts, the cost per sq ft for small structures (home additions) is almost always higher than for larger structures, because subcontractors may want a few more dollars for their labor because they could be earning more on a larger job for almost the same amount of time, and because expensive costs such as roofs, foundations, etc. are being spread over a smaller sq footage.

Anyway, it’s interesting that I came up with a number close to your lowest bid.

As they say, you’ve only got one way to go, up!

Aloha, (I found out Aloha can also mean “Goodbye”),
Carl

(Aloha Mr. Heldmann,

Thank you for your assistance- greatly appreciated.

Mahalo nui loa- Thank you very much.

Don)

But, I will show you how to determine the approximate cost to build a home, any home in any state.

You will also learn approximately how much the Builder’s (General Contractor’s) profit is.

Why would you want to know how much it costs to build a house or how much profit a builder makes?

Why wouldn’t you? Knowledge (information) is power.

When you know the cost of building a home before you even decide whether to build or not, you are in a better position to decide what size, style, and quality of home you can afford, based on your budget of course, and you are also in a better position to later bargain with a builder.

Before you spend money on home plans for a house you can’t afford, I’ll show you how you can determine what you can afford.

The basic cost to build a house is determined by the size (square footage of living area), design (shape), and the quality & quantity of the materials (and the builder’s profit & overhead)

Here’s a recent letter I received that typifies the dilemma that most people face when trying to decide what to do when it comes to building a new home.

NOTE: This analysis of the cost to build a house will not include the land, any land development cost, or any financing costs.

From: David in Denton, North Carolina

Carl, We are in the process of designing our house and I’m trying to get a cost
estimate of what this house will cost us before we go get plans drawn of a
house that we can’t afford.  We basically have designed a 40 X 50 rectangle
shaped house around 2040 sq. ft. living area with brick veneer, and with vinyl eves.
It will be a 1 story home with a huge unfinished bonus area in the attic to use as storage.
It will have an attached 2 car garage with an 8ft. concrete wrap-a-round porch on the sides and the front.

Any information on an estimate for this type of house would be greatly appreciated.
David

Hi David,

You are wise in trying to determine affordability before spending money on home plans.

I learned that the hard way on my very first house when I had to “toss” the plans I had already purchased and go back and start “at the beginning”, right where you are. But I didn’t have available the “tool” you have.

The cost to build a house is determined by the size (square footage of living area), design (shape, etc.), the quality & quantity of the materials used and the builder’s profit.

Using this excellent tool called the “Residential Building Cost Calculator”, from Craftsman Books, leading experts in construction cost estimating, you can solve your dilemma.

Let me walk you through the cost estimating process using this tool. It is not only an easy and fast process, it is fun.

Image courtesy of  Houseplansandmore.com

The first question you will be asked is “How many corners does this home have?

The more complex the shape of the house is, the more expensive it is to build per square foot of floor area.

The second question you will be asked is “What is the total living area of this house?”

Larger new houses cost more to build than smaller houses but larger homes generally cost less per square foot than smaller homes.

Ranch style (single story) homes cost more per square foot than 2 story homes of the same size and quality.

The third question you will be asked is “What is the quality class of this home?”

New homes vary widely in quality and the quality of construction is a major cost variable.

For the purpose of a preliminary cost to build a house, to see what shape, size, and quality you can afford, I recommend choosing the “Quality Class 6” all the way through, for all choices.

If it turns out you can afford a certain style and size, you can always upgrade your choices!

Now you’ll answer just a few more quick questions and then you’re done.

Is there an attic, balcony, basement, garage or exterior porch?

Is this home in a housing tract?

Is this home built outside the metropolitan area?

What heating and cooling does this house have?

How many fireplaces in this house? And, is it a one story home or multi-story?

What State and Zip code?

You now have a rough estimate of the cost to build a new house based on your input.

Is the cost to build estimate on target? GREAT! If not, start over. It’s FREE and it’s FUN!

Well David I came up with a total cost of $237,607, for a 2,040 sq. ft 1 level home (not the house in the above image) with wrap around porch, central heat & air conditioning, 1,500 sq. ft of unfinished attic space, excluding land, but including the Builder’s or General Contractor’s Markup of $29,579.

Click on image to enlarge.

Good luck,
Carl
byoh.com

The company can build me a 2000 sq. ft. house on 1/2 acre starting at $162,000. My concern is that it’s on a slab and not a crawl space.

This is obviously a very simple house with nothing for add-ons.

Does this sound like anything I should pursue?

I have been approved for $185K with my mortgage and I am trying to get as much as possible for my mortgage.

Oh, this is my first house also!

Thanks,
Chris

Hi Chris,
What I would do if I were you is find a local Realtor familiar with the area and have the Realtor “pull up” comparable sales (comps) so that you can compare “apples with apples”. Then you’ll know if you are getting a “good deal” on the proposed house.

$162,000 for a 2,000 sq. ft. “simple” house, including land (lot) and land (lot) improvements sounds like a good deal in today’s housing market. You’ll know more with the Realtor’s comps.

Any “good” Realtor would be more than happy to do this for you, even if you are not really looking to buy a house through them. They know they have made a friend for life

Slab foundation

As for building on a slab foundation vs. a crawl space foundation; I built homes in SC for many years and personally, I would prefer a slab foundation in SC.

The soil will be either clay in the Piedmont region or sand in the coastal areas, both of which lend themselves to slab foundations.

A properly constructed slab foundation should not cause you to be concerned.
Hope this helps,
Carl

We have a budget of $300,000 for our new home.
When we deduct the amount we still owe on our land ($55,000), we have
$245,000 remaining with which to build.

Do we have to deduct the amounts for the well, septic, etc. before determining the amount we have to build the actual house? Or does that all get included into the cost per square foot?

I hope this makes sense.
Thanks
Marsha

Carl, I was looking at the two websites you suggested that have the Free Cost to Build Feature and was wondering was is included in the estimate. Are kitchen (cabinets and counter top), bathrooms and floors included?

Is this the estimate price for the bare walls? It is something to take into consideration when planning a budget because if those things are not included, well, you have to add quite a few dollars to that estimate.
Thanks,
Danny

Hi Marsha, Hi Danny,

Two questions, one answer.
These questions come up all the time and apprehension over what is and what is not included in a typical home building cost estimate is normal.

Here is an image of a cost to build estimate I did for the Sacramento, CA home.

Click on image for a larger view

As you (both) can see, other than specialty items or upgrades (i.e., Geothermal Heat/AC), the items mentioned by both of you are included.

You should keep in mind that the cost to build for this example, or any house plan, can vary considerably depending quality of materials selected, and on actual bids for labor and material.

The estimate for this house is an approximate one based on “average” quality materials and a slab foundation.

Until you actually have home plans and go out and get actual bids, all you will be able to have is a rough estimate of the cost to build your home(s).
Good luck to both of you,
Carl

“Hello, I would like to know about how much I’m looking at $ wise to build a 2 bedroom home in LA County, California.
I already have the land.
Are permits usually included in the total cost?
If not, what is an approx cost for permits?
Cynthia”

Hi Cynthia,

Yes, permits, and fees, are included in the cost to build for all homes in all states. The cost of permits and fees will vary widely from state to state and from locale to locale within any given state.

The cost of permits and fees can range from a few hundred dollars to several thousand dollars.

A phone call to your local building inspection department can give you a run down on what permits you will need and the approximate cost of permits and fees.

Permits are usually required for building, electrical, plumbing, HVAC, insulation, well, septic, driveways, grading, etc.

Fees are required for water and/or sewer tap-ins, and any other services provided by third parties.

I did a cost estimate for this 4 bedroom house in San Bernardino, CA, back in March of 2008. (The cost to build this house today in 2009 should actually be less!)

You’ll see a “Breakdown of Building Costs for this house on “Cost to Build a House in California”

HOUSEPLANS.COM – PLAN 18-1036

The cost of permits and utilities was $1,941.

Use the “Cost to Build Calculator” (It’s free!) found on my “Getting Started” page and play around with different house sizes and qualities.

Just as a useful tip, you’ll find it doesn’t cost much more to build an extra bedroom or two.

You will also find that it is easier to get financing on a 3 or 4 bedroom than a 2 bedroom house.

A 2 bedroom home will “take a licking” on the appraisal your lender will order.Always build for “resale”. Lenders are always looking at resale value, you should too.

Good luck,
Carl

Lisa”

Hi Lisa,

The $100 /sq ft average cost to build a house you keep hearing about includes everything, including the “Kitchen Sink”

$100 per sq ft however, is what is called the “Median Average” cost.

That means 50% of all houses cost more than $100/sq ft, and 50% cost less than $100/sq ft.

It is a good statistic for giving us a “snapshot” of the housing industry.

It is better than using what is called the “Mean Average”, where the total cost of all houses is divided by the total number of all houses built and the average cost gets “skewed”.

Here is a chart from the National Association of Home Builders depicting the Median cost per sq ft from 1992 through 2008 for major geographical areas in the USA.

Note: MSA’s = Metropolitan Statistical Areas.

Click on image to see chart

In the 50% below $100/sq ft, you’ll find houses built for much less, such as in “Tract housing”.

Tract housing = housing consisting of similar houses constructed together on a tract of land.

In the 50% above $100/sq ft, you’ll find houses built for much more, such as in “Custom homes.

Custom home photo courtesy of The Pinnacle Group, Inc

Read my pages on “Cost Estimating” and Cost Estimating Explained” and you WILL have a clearer picture of this often (always?) confusing issue.

By the way, land and/or land development (Building site) is NOT included in any of these “costs per sq ft”.

Thanks for writing. You had a good question.
Carl

Keith & Kathie

Courtesy of monstroushouseplans.com

Monsterhouseplans.com/plan41-247

Total sq ft 1296, 3 Bdr, 2 bth, 509 sq ft garage, slab foundation.

Hi Keith & Kathie,
What a nice looking home! I love stucco and Spanish design. I guess I’ll have to move to the SW.

At $105 per sq ft, excluding septic, I think your builder is giving you a fair deal as I wouldn’t contract a custom home if I couldn’t make at least $20 per sq ft, including the garage. At $105 per sq ft, I doubt if your builder is making $20 per sq ft.

Most of the information on my web site www.byoh.com/ concentrates on the owner builder cost of construction. That is, the owner being the General Contractor, saving approximately $20 -$25 per sq ft., or 25%.

Below, you will find a chart (see below) that gives the median national average cost of new construction (No Land) using a General Contractor. (Prices are still current for 2010)

Your General Contractor (Builder) is “Spot On”!

(Median national average chart. Click on image for a larger view)

Tip: Since you are actually acting as your own Lender for the Construction Loan, be careful how you pay your General Contractor.

Pay him (or her) exactly like the banks do, that is, for work completed and/or materials on the building site. Read my Chapter on Construction Loans in “Be Your Own House Contractor“, or on my “Construction Loan” page on my web site.

Good luck,

Carl