Is Home Builder Charging Too Much

Hi Carl,

We are building a new home in AL and have an estimate from our General Contractor.

It seems to be on the high side.

The home is 3200 square feet and the price comes out to about $110 per sq. ft.

We own the land already, but he will be pouring a drive (extended) for us and we do have to have a septic dug.

Does this sound about right to you for the area we live in?

Thanks so much, Laura

Hi Laura,

Whether or not your General Contractor’s bid (estimate) is on the high side or not is impossible for me to say.

I don’t have any idea as to what quality of a house you are building, the design of the house, the difficulty of construction due to terrain, design, etc.

Nor do I know how much your builder has in his contract for allowances for certain items such as flooring, appliances, light fixtures, etc.

According to the most recent NAHB survey report (found on Cost Estimating), the current average cost to build a house is $103 per sq. ft.

$110 per sq. ft. is high compared to the current average cost, but $110 per sq. ft. wouldn’t be too high for a higher quality custom home.

Your relationship with your builder should be built on trust. It is, or will be a long (hopefully) relationship.

If you did not get comparable construction bids from other General Contractors, you should do so now…if it’s not too late.

Most people when building a new house get three general contractor’s bids, check all the builders’ references, and take the middle bid. Then they feel more comfortable.

Depending on the supplier and geographic regions, installed cost for in-cavity sprayed-on cellulose, fiberglass and mineral wool can be about 50% higher than a typical fiberglass batt installation.

Call a local insulation company and get local pricing for various methods of insulating a house your size.

Extended driveways do cost more money, but a well and septic tank are normally part of any General Contractor’s estimates, as are all the required permits.

Good luck and I hope you enjoy your new house.

Carl Heldmann (2016)

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