Solving the Price Puzzle
Custom home pricing is a complex subject. Here is a way to think about it.
How much do cars cost? The obvious answer is that it depends. You’ll pay way more for a Tesla Model S than for a Toyota Camry. That’s no surprise to anyone.
Then why do so many people think a custom builder should be able to quote a standard cost-per-square foot over the phone or by email? The answer is that it’s a popular metric with the real estate industry. You’ll find cost per square foot on every Zillow listing, and it’s one of the numbers cookie-cutter tract builders use to compete with other cookie-cutter tract builders.
Unfortunately, this flawed metric has created an assumption among some people that similarly-sized homes should have roughly equivalent value. That’s just not true.
Equivalent value may be a fair assumption with tract homes, which really are manufactured products. Their builders (especially the large, multi-state builders) have management structures similar to those used in factories, and they focus on production time and cost. That makes sense: the effort required to save $1,000 per home pays off when you’re building 20,000 homes a year.
Of course, being efficient and not wasting time or money are values you should expect of any company you work with. But tract and custom homes are different animals. The custom home is one of the world’s last great hand-crafted products; rather than being designed and built for a general demographic, everything about it has the goal of satisfying your individual wants and needs.
The beautiful thing about a custom home is that you can get any floor plan, architectural features, or products you want. The cost is determined largely by your choices. No responsible custom builder quotes a per-square-foot price without an in-depth conversation about these choices, because doing so would risk misleading the client.
Yes, some tract builders offer limited choices in cabinets, countertop, fixtures, and carpets. But you have to stick with their pre-selected options, and you have to put those options into one of their standard floor plans. Some of these builders have tried letting customers choose non-standard products, but then backed off when it raised havoc with their ordering system, their accounting department, and their construction schedules.
Custom builders aren’t constrained by the need to save pennies. Instead, our overriding purpose is to help customers design and build a unique dream home. Unusual or complicated products or designs will affect the price, but we work with customers to give them as much of what they want as possible within a budget and schedule they are happy with.
That’s because our business model is based on customer service. Working together, we will create a home that is just right for you.
