Demystifying the Myth: Per Square Foot Pricing

Ever felt like choosing a builder is a wild goose chase? A merry-go-round with a 'race to the bottom', 'who's lying to me the least' spin to it? It's probably because of the myth of per square foot pricing.

Why does a seemingly straightforward concept become a rollercoaster of confusion? By understanding the myth — and the reasons behind it — you'll prevent the frustration and heartache that so many people dread when they dream of building a custom home.

The Enigma of Per Square Foot Pricing

Imagine entering a carnival where a genial builder hands you a brochure promising clarity and simplicity — per square foot pricing. It's analogous to the carnival barker inviting you to try the easiest game in town: "Just guess the cost per square foot, and you win a shiny new home."

You contact a custom home builder and they tell you their price per square foot is "roughly $200," let's say. You know you want your home to be around 3,000 square feet, so it's time for some easy math. You whip out the ol' sharpened pencil (or TI-83, or crayons) and multiply... and come out to a figure of $600,000 for your shiny new custom home.

Sounds straightforward, right? Well... not quite. Not by a long shot, actually.

The Illusion Unveiled

The real truth is that any "per square foot" figure is about as reliable as a Central Texas weather forecast in springtime. (If you're from out of state, that's very unreliable.)

Why? Well, there are a few reasons, but chief among them is that every home and homeowner is unique.

In this way, a custom home is a bit like a custom bouquet of flowers — and thinking "price per square foot" is anywhere close to accurate for your needs is like thinking that "price per flower" is anywhere close to accurate to the cost of the bouquet you want.

If you don't believe me, call your local florist, tell them you want a bouquet, and ask them what their price per flower is.

I'll bet you a brisket there's going to be a very long period of dead silence on the other end, followed by questions like: what kind of flower? How many? Do you need them arranged? If so, will you need a vase? Tall arrangement or short arrangement? Will you need delivery? How quickly do you need this? And on, and on, and on.

And so it goes with building a custom home as well.

A "Square Foot" is NOT a "Square Foot"

Here's the kicker: just like flowers not all square footage is created equal.

My local florist tells me that the going rate for a nice, cut long-stem rose is about $3.00 right now. The cost for a dandelion — still a flower, mind you — is... well, I actually have no idea because he just laughed at me when I asked. But I did find one for free on the sidewalk outside, which validates my point.

As pretty as they are, let's move away from flowers for the moment and talk about some actual hard-boiled home building. Let's take the bathroom below and call it "Bathroom A". "Bathroom A" costs about $3,000.00.

Now let's take this bathroom and call it "Bathroom B". "Bathroom B" costs about $10,000.00.

How can this be? Stick with me and let's get a little nerdy here.

Both bathrooms are 173 square feet. Both bathrooms have the exact same linear feet of wall space, both have a stand-up shower and a freestanding tub, and both have a vanity with two sinks. Both have the same amount of plumbing work, insulation, foundation, and HVAC ducting.

Carter, you say, they're exactly the same. How can the cost be so different?

The difference is in the fit and finish.

For the sake of argument, I'm going to "finish" Bathroom A with the absolute cheapest stuff I can find on the local Mega Hardware Store website. Bathroom "B" will receive the same fit and finish as one of our available new homes for sale here in the Texas Hill Country.

Now let's tabulate the costs for each:

The grand result? Bathroom A comes in at $17 per square foot, while Bathroom B comes in at $55 per square foot.

For the same bathroom. The same amount of square footage.

Thus, one of the greatest myths in custom home building has had the rug pulled out from under it: a standard price per square foot just doesn't exist.

And anyone who quotes one to you is making it up, and they know it.

A More Transparent Approach

Now, you're probably wondering if there's a builder out there who doesn't play games with your heart. (Yes, I just made a Backstreet Boys reference.)

The answer is, yes. There are some great builders out there who aren't trying to carnival-game their way into your pocketbook. These are builders who will take the time to sit down with you, discuss your unique needs and discuss how you can build your dream home and stay within budget. No nasty surprises, and no cheap-o Mega Hardware Store fixtures.

Ready to discuss designing and building your custom home in the Texas Hill Country? Schedule a 15 minute Discovery Call with us!

Discover the 7 things you must know before designing and building a custom home.

Designing and building your new dream home can be exciting and overwhelming all at once — especially when you don't know what you don't know.

Take advantage of our 140+ years of experience with this free guide that will educate you on 7 important things you must know before building your next custom home.

Download Now