The main question customers seem to want answered is “How much is my new home or remodel going to cost?” If you click on the “cost to build your home” page in this section of our website, you will see some information to help you understand potential costs. However, to really give you specific information that pertains to your situation, preferences, etc… we will need to meet with you and collect some additional information. Go to the “Contact Us” page if you would like to set that up.
As you probably expect, there are a few different ways to finance the construction of your new home or remodel. To learn more about those, you can click on the “How to finance construction” page in this section of our website. Of course, we can give additional guidance as well if you would like to reach out to us to have a more thorough explanation of your options.
Cost per square foot, factors to Keep in Mind
Single story homes can be $15-20 more than an efficient two story. A house with a finished basement will cost less per s.f. than the same sized house without a basement. And smaller houses will tend to cost more per foot than larger homes since all the fixed costs don’t go down (well, drain field, clearing, drive, etc.). More complex rooflines and footprints will cost more. And, what about features like a swimming pool or other outdoor spaces? There are also lot site specific costs like, permit fees, clearing, driveways, etc.. that can make prices vary by many tens of thousands from one lot to the next with no change in actual footage or plan.
Rule of Thumb
Having said all of that, we can assume turnkey costs in today’s market around $275/s.f. for finished spaces and something like $120/s.f. for unfinished spaces. While obviously not precise, this will likely put you in the ballpark in average, custom home situations.
Above and Beyond
Obviously, with price, the sky’s the limit and you are bound only by your imagination and your budget. We see home exceed $300/ s.f. substantially when we are building products like you see illustrated in the nicest home building magazines and the “wow” factor is pretty intense. With features like boat docks, pools, very high end finishes, a pursuit of extremely efficient energy packages, etc.… a house can be $400/ s.f. or even more.
In a cost-plus scenario, customers will tend to save around 10% under the cost of a traditionally priced home. This pricing guides mentioned here would consider site work like clearing, well, driveways, etc.… but do not factor in the actual cost of the lot itself.
Are Custom Builds Right for You?
It is worth saying that there is an entry point for a custom built scattered site home. While it can vary, it is unusual to see houses that are not well into the 700’s even before you consider the lot. By the time you consider the site costs, the unfinished spaces, and the features you see in an average home, it tends to be hard to produce anything of a custom level for much lower than that.
For customers whose price point is below that level, they may find they can be served better by a builder who has a production style business model and builds the same houses over and over again in controlled conditions and with designs, finishes, etc… that are very focused on value rather than aesthetics.
Shape/style of house
While the above price information is meant to be helpful, many factors can skew the price significantly. One of those is certainly the efficiency of shape of the plan.
Multi-Story Homes
A two-story house will save approximately 10-15% compared with a rambler that has the exact same square footage. This is because large structural elements such as the footing, foundation, framing, roof, insulation, etc. can be used to cover twice the square footage without increasing their costs.
Similar economies can be found with the use of basements and finished attic spaces. These areas are often constructed unfinished and then finished later. This allows us to meet your budget now but allow you to have more space later without moving to a new house or performing expensive additions. While not exactly true, you can sort of figure half the cost of finished space when considering unfinished space that has a roof over it.
Overall Size
The overall size of the house will also affect the cost per foot. The larger a home, the lower the cost per square foot. This is because some “fixed” costs such as water source, sewer, driveway, garage, clearing, etc. will generally be the same or close to the same but if those costs are averaged into a larger house, the overall cost is lower.
Cost-Plus Construction
In cost-plus construction, we build a home or remodel for our actual builder cost plus a percentage as our management fee (intended to cover overhead and profit).
This is an “open book” process where the customer has access to our actual costs for the project. Our customers get updates on exact costs for each category or allowance as we work through the build process. Updated projection based on changes, selections, actual costs to date, etc..
Why Fixed Price Is More Expensive
In a “fixed price” scenario, a builder will add on overhead and profit of somewhere in the low to mid 20% range, then another 5% or so for variances from the budget. So, in cost plus, the customer can save 10% or more on average.
There are two reasons that we can cut our profits on cost-plus project:
One is that the overhead and profit number is guaranteed. In a “fixed price” situation, the builder will absorb any variances, price increases from vendors, etc. Since the actual gross profit will only be determined after everything is complete, the builder must plan for some worst-case situations in his budget. In cost-plus this uncertainty does not exist. Since we have less risk, less profit is also appropriate.
Secondly, RC Elite Construction is designed to operate very efficiently with a “lean” business model that allows us to have a viable business with lower profit margins than our competitors. We do not hold large amounts of land, build model homes, have sales staffs, standing inventory, advertising programs, etc.
which allows us to charge our customers less and still maintain a measure of profitability. Our overhead is mainly just the staff it takes to build homes.
Transparency Throughout the Project
Another feature customers like about cost-plus is being able to see where their money is going. Our detailed estimates help you to know exactly what you are spending your money on and thus ask questions, make cuts, etc. with the use of this extra level of information.
Upgrades and Changes
The cost-plus format is very beneficial to customers when it comes to upgrades and changes as well. These represent major profit margins for many builders. Many builders will charge a change order fee for every change order. And, they will build in 100% margins or higher into changes. But, with our system you pay nothing for changes except exactly what our cost of that change is and the associated margin on it.
Needs May Vary
Cost-plus is not for every project and it is not for every customer. We would like to speak with you in further detail concerning this approach and to show you what a real house looks like and answer any questions you may have. In addition, we can refer you to past cost-plus customers so you can see how well it worked for them.
