Do finishes change the prices that much?

8mpgFebruary 2, 2013

The fiance and I have been going through model homes and looking at builders to build on our property. Im having a hard time believing nicer finishes can raise house prices $30-40/ft. A basic tract home here in Texas can be $55-60/ft. Semi custom home builders are wanting $100-105/ft.

To the differences:

laminate counters
square corners
cultured marble sinks
standard ceilings
3" baseboards
80%+ brick rest wood siding

hand scraped floors (some were engineered and some nail down hardwood)
low to mid granite
rounded drywall corners (with some arches)
cultured marble bathroom sinks (other than master)
some box ceiling treatments
3-5" baseboards and partial house crown (3")
10-20% stone, rest brick

These didnt include the lot prices. Now I understand that Texas is much cheaper than other places in the US, but I find it amazing that the same house with the differences listed above could cost $60-100k depending on the size. Am I crazy to think that these prices are a little off? I have a guy I know who is a builder in a couple counties away who recently built a house that was 3100sq ft + 720ft garge (total under roof 3800sq ft) with lots of custom maple cabinets, 140 linear feet of granite, mid level appliances, etc for $220,000 (not including lot or his profit). So that is $71/ft if you divide by living space or $58/ft by total under roof space. Say an average of $68/ft. These are the same finishes all the builders in my county want $100-105/ft for. Unfortunately I cant get him to come build for me or I would. Builders are doing cost + 10% now a days so even if you add $25k profit, we are under $80/ft.

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Are the house plans identical? Generally tract house plans are designed to be economical to build, and I would expect a "semi-custom" house would allow for deviation from the cheapest possible plan.

Cost per square foot is a tool for estimating cost, but houses aren't actually priced that way, and houses with more complicated framing, roofing, etc... cost more to build.

    Bookmark   February 2, 2013 at 8:18PM
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Are you sure those are the only differences? Are there differences you don't see like insulation and HVAC? Or better windows, different roofing, etc.

    Bookmark   February 2, 2013 at 8:38PM
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Unless one is talking about a product market under the manipulation of a monopoly (and housing in most areas is generally not subject to this type of influence) the market-place of pricing prevails. I would seriously question the quoted pricing of the builder from several counties away. Over the period of 20 years as a G.C., and having watched my father before me, I have seen builders enter this business and price their services 10-15% below fair market value. They generally are out of business within 3-4 years.

    Bookmark   February 2, 2013 at 10:10PM
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Believe it. Upgrades add up quick. Finishes/selections can make/break a budget.

    Bookmark   February 2, 2013 at 10:56PM
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ohbldr - the guy I know has been building for years and years. He sold the house for $360k including a $60k lot. He did carry interest, the construction loans, etc...

The plans are not the exact same plans, these are just their general quoted prices when people ask "how much per sq ft?". These are obviously not the best ways to quote but offer a ballpark. Both ways include spray foam. I know the semicustom home was a 16 seer and the tract is probably a 13 seer.

    Bookmark   February 3, 2013 at 12:19AM
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The difference is in the details. And there are few details more expensive than the finishing.

Furthermore, a cookie cutter subdivision project with one foreman overseeing 50 homes and maybe three or four plans at most, is cheaper to build than a custom one-off home with a project manager responsible for as few as one or two homes.

Volume accounts for a lot in both labour and materials. My tile sub once told me of working in a townhouse subdivision where every entry, kitchen and bathroom had the same tiles.

"Little boxes made of ticky tacky...
And they all look just the same."

This post was edited by worthy on Sun, Feb 3, 13 at 1:35

    Bookmark   February 3, 2013 at 1:32AM
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Also the more square footage the home, often then lower the price per square foot. So you can go more space than you need and feel like you're getting a bargain..but its more space than you need :P

    Bookmark   February 3, 2013 at 3:25AM
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It all increases labor costs sharply:

"rounded drywall corners" versus squared ... very time consuming

Carpet (over slab) versus wood ... way more work

box ceiling treatments versus flat standard ... more framing, more drywall cutting, more seams to tape

    Bookmark   February 3, 2013 at 9:20AM
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Square foot prices are only useful as rough indications of overall cost but in the Boston area the s.f. construction costs you list would be doubled. However, houses here have basements, 2 stories, and higher insulation and HVAC costs not to mention taxes.

    Bookmark   February 3, 2013 at 10:00AM
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Oh you can believe it!!! That is why it is so important that you know what you want and can afford and stick to is these changes and the idea that it won't make much difference, that gets you into trouble! You are fortunate in Texas because you can build so much cheaper than most of the US....your labor is a huge factor down there.

    Bookmark   February 4, 2013 at 5:37PM
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What worthy said. If you're comparing a tract / "volume" builder to a custom home builder, you're completely comparing apples to oranges. As others have said, a tract builder decides what 3-4 plans will be built, negotiates bargain prices for already cheap materials (carpet, laminate), and is able to minimize waste because the same house is being built over and over again, so the exact amount needed for each house is easy to calculate. With a custom home, you're paying a premium to have a "one of a kind" home.

Where we live, two big tract builders have unfortunately recently infiltrated our area (I realize that in other states, this is very common, but it's new for us). Now, I'm not saying the the "custom" homebuilders areound here were all setting the world on fire with their creativity and building genius, and I'm not saying the we didn't already have somewhat "cookie cutter" looking subdivisions, since those "custom" builders all built pretty homogenous "French Country" homes. BUT -- the tract builders are definitely changing the landscape. Their houses sell for $90-100 / sq ft (that's x living square footage, including the lot). "Custom" builders were hovering around $125-135 / sq ft (x living, including the lot). So needless to say, the custom builders are not pleased.

We just built custom and I do not regret it.

    Bookmark   February 8, 2013 at 5:55PM
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I just came across this interesting building blog post addressing this issue:

Here is a link that might be useful: There is a place for us

This post was edited by caymaiden on Sat, Feb 9, 13 at 10:18

    Bookmark   February 8, 2013 at 8:51PM
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