Construction Bids Too High

Summary: Construction Bids for a new house can vary tremendously. The cost to build a new home is determined not only by size, but by design and quality as well.

Carl,
I found this really nice house plan that I really, really love.

But it was roughly estimated by a builder to cost $166,000 to build.

I am comfortable of something below $150,000.

Do you think it is possible for us to shed cost that much????
Mali

Hi Carl, I have been looking for a General Contractor to build my 3,100 sq. ft. house and to date have been disappointed in the prices I have received ($250-$275/sq.ft.).

How do I find out what the average cost per sq. ft. should be in my area?
John

Hi Mali and Hi John,

The median average cost to build in the USA according to the National Association of Home Builders (NAHB) is on this CHART. Median average means ½ of the homes in the survey cost more to build and ½ of the homes in the survey cost less.

However, the cost to build any new home can vary and is determined by size, design, and quality as well as the city and state in which it is built.

But more importantly, the cost to build new houses of the same size and location can vary tremendously due to design and quality.

A range of $100 to $400 per sq. ft. for the same size house is possible!

The selection and/or design of windows, doors, moldings, ceiling heights, staircases, roof shingles, flooring, plumbing fixtures, appliances, etc., all can vary the cost to build basically the same new home by hundreds of thousands of dollars!!!

You both have home plans so you have already chosen the size of your new homes (as well as the city and state). Now, both of you need to concentrate on adjusting the design and quality in order to adjust the cost to build to fit your budget.

Sounds simple doesn’t it?

It is…just time consuming.

You can get an idea what changing the design and the quality of materials (as many times as you want) will result in by using this "Building Costs by City & State" calculator.

By adjusting the “Quality Class” feature on this calculator you can obtain as many different approximate “costs to build” as you want until you find an approximate cost to build for your house plan that hopefully will meet your comfort level.

Your design and quality decisions need to be spelled out in writing (called specifications) so that custom home builders can bid accurately.

This will require price shopping on your part, either in stores or online for as many of the items you have a control over as possible.

It is impossible to make final decisions on everything this early into your project so the use of “allowances” is recommended. See my article “Home Building-Budget-Allowances”

For the sake of immediacy, you could use the estimated material costs for various categories found on the "Building Costs by City & State" calculator to help you set allowances.

For example, on the hypothetical cost breakdown shown below, one might use $4,031 for installed flooring , $2,984 for installed appliances, $2,293 for windows (installation labor is normally included in Rough Carpentry), etc.

Cost Breakdown for a Santa Rosa CA home

But the more complete your specifications are, the more comfortable a builder is giving accurate construction bids. If a builder is not sure what you want, he will pad his estimate to protect himself.

Next all you have to do is find a few custom home builders who will submit bids that use your specifications...and willing to put those specifications in a building contract.

NOTE: An example of how much the cost to build for the same plan can vary can be seen on my post “Cost to Build in North Carolina Too High”

Good luck,
Carl

Cost to Build in North Carolina Too High

Hi Carl, We purchased our land in 2005 and are just starting to get prices for the construction of a new home in Hickory, NC on Lake Hickory.

We would like to build a ranch with a walk out partial finished basement and a 2 car garage.

We purchased the plans and would like to move forward.

The square footage of the home is 3000 sq. ft. including the partial finished basement.

There will be 4 bedrooms and 3 full baths, 9” ceilings on 1st floor, vinyl siding with partial stone front, 1 fireplace, wood floors except tile for kitchen & baths, $1,500 permit fees, $1,600 tap-in fees for water & sewer with a lift pump required for public sewer.

I have been in touch with 3 builders in the area and it appears that the cost of building on the lake is high.

I have come to the conclusion that since this is an upscale community the pricing we are getting reflects the area and not true cost of the home.

I have a background in construction and have compared the cost to build in Hickory NC to where I live presently.

The builders I have talked to in Hickory are saying that the cost to build this home will be between $140.00-160.00 per square foot. One builder stated $416,000 while another gave a range of $550,000 to $600,000.

Believe me when I say that we are not looking for a golden palace and feel that the cost per sq ft should be around $120.00.

There may be some upgrading but none that would justify there high cost per sq. ft. that has been given.

Do you have any suggestions?

Laura

Hi Laura,

I think the builders are giving you realistic bids. This beautiful house, as stated in the description, is “overflowing with details’.

The Laurelwood - House Plan# W-5024
Overflowing with details, this home features all of the niceties that enhance family life. Ceiling treatments crown every living space on the first floor, and bay windows hug the screen porch, dining room and master bedroom. The lower level features two full bathrooms for each bedroom, making it the perfect retreat for overnight visitors or older children.

This home plan from Don Gardner has the following input criteria:

• 2016 Sq. Ft. finished first floor
• 998 Sq. Ft. finished walkout basement
• 1018 Sq. Ft. unfinished basement
• Unfinished Bonus Room: 364 Sq. Ft.
• Garage/Storage: 661 Sq. Ft.
• Porch: 639 Sq. Ft.
• Screened Porch: 200 Sq. Ft.
This is an inexpensive expensive home to build due to the complexity of design. Multiple roof lines, multiple bay windows, 9 foot ceilings, porches, and a large intricate foundation are but a few of the causes of a higher cost to build. While not a “golden palace” it is not either a simple ranch.

Using the cost to build calculator found on my "Getting Started" page on byoh.com, for Hickory NC, I ran 2 separate “cost to build” estimates, changing only slightly the quality of materials and interior design.

I used “Quality Class # 3 and came up with an estimated total cost to build, including a General Contractor Markup, of $507,794

Moving up one “Quality Class” to # 4 on the cost to build calculator, I came up with an estimated total cost to build, including a General Contractor Markup, of $657,371.

Here are the two cost breakdowns I came up with:
Click on image to enlarge

I don’t see how you could build this house as designed for much less than the $507,794 amount, unless you acted as your own General Contractor, saving the General Contractor’s markup.

But as you said in a subsequent email, you have concerns over doing that as you are coming from a different area of the country.

You could modify the plan, eliminating some of the expensive design features, but then it would no be the same house.

Whatever you decide to do, it is imperative that you draw up very detailed specifications. There are many areas of any design that without careful planning material and labor costs could escalate quickly.

Specifications should be well thought out in advance and adhered to during construction.

While one can build a home of similar size but simpler design at a much lower cost, it will not be a comparable house.

Here is a cost breakdown of the same size house, including the finished basement area, porches, unfinished bonus room, and garage...but simplifying the foundation, and downgrading the design details and materials.

I used a combination of "Quality Classes" 5 & 6 and came up with an estimated total cost to build, including a General Contractor Markup, of $366,777.

You could pick and choose upgrades (or even downgrades) for different categories as you so desire.

It's a lot of work figuring out the cost to build a house but it's well worth it.
Click on image to enlarge.

The devil is always in the details.

Best of luck,
Carl

Cost to Build a Kit Home or Package Home

Summary: Kit homes or package homes are an excellent way to both save money and be fairly sure of the total cost of the home building materials that will be going into your new home.

Hi Carl,

Great website! I hope you can help with my question.

I saw a Kit House on the Menards.com website.

I realized their price is the material etc.

I was wondering, how much does it cost to build a 1500 square foot kit home?

Thanks,
Joe

Hi Joe,
Kit homes have been around for a really long time.
Here’s a 1923 ad for a Sears Kit House.

Courtesy of AntiqueHomeStyle.com

You will notice that the price or cost of materials for this Sears 1,008 sq ft new home kit is $2,349 and the estimated finished value is $6,500 (excluding land). Those are about the same ratios of building material costs to finished value that you will find today.

Here’s a 1,456 sq ft Menards Kit Home that costs $53,964 that would probably have a finished value of at least $160, 000 to $170,000 (excluding land).


Plan: G20164 Courtesy of Menards

Kit homes or package homes are an excellent way to both save money and be fairly sure of the total cost of the home building materials that will be going into your new home.

Total Living Area: 1456 sq. ft. Bedrooms: 3 Baths: 2
Material Lists Include:
Framing Materials, Flooring, Windows, Plumbing & Fixtures, Trim & Cabinets, Lights & Electrical, Doors,
Roofing & Siding.

So, what will the total cost of construction be? Basically, you just add labor and a few other construction cost items as shown on the cost breakdown below (see image)! Note: Subcontracted labor is normally (approximately) the same total cost as the home building material total cost.

Using the “Cost to Build Calculator” found on my “Getting Started” page for a 1,456 sq ft single story new home built in Biloxi MS (Because a reader recently asked for the cost to build a new house in Biloxi MS Zip 39530) I came up with the following approximate construction cost estimate:

Materials: $73,735.00
Labor: $69,413.00
Total cost including other construction costs such as permits, plans, etc. and a General Contractor’s Markup of $20,364 = $174,702

Here is the construction cost breakdown:
Click on image to enlarge:

It looks like Menards has a pretty good deal!

Since Menards doesn't supply foundation materials, I subtracted that cost ($4,089) from the calculator's total cost of materials of $73,735 leaving $69,646 as the calculator's total cost of materials.

Calculator’s total cost of materials = $69,646
Menards total cost of materials = $53,964
Savings = $15,682...reducing the total (approximate) cost of construction to $159,020.

It appears that Menards gives you almost a 23% savings on your home building materials! Sweet!

Good luck,

Carl

Cost to Build a Home in Raleigh North Carolina June 2010

WOW! Watch a video rendering “tour” of this house to get a better feel for it before ordering the floor plans from House Plan Central!

This striking home is referred to as a “country” style by the designer, but I think it goes beyond just “country”.

True, the friendly wraparound porch reminds us of those congenial gatherings of days gone by, but the roof line is what caught my eye.

I am a roof fanatic…well, at least a roof aficionado.

This roof gets a 10!

Although this home is described as a two bedroom, it has an office that meets code requirements to be a third bedroom.

Great floor plan and use of space!

HPC-2026-16 from houseplancentral.com

Plan Type - Single-Family
Plan Style - Country
Bedrooms – 2 (office as possible 3rd)
Baths - 2
Living Sq. Ft. – 2026
Covered Porches =786 sq ft (including 4 season room)
Width: 52 ft. - 0 in. Depth: 62 ft. - 0 in.
Foundation: Crawlspace
Click here to see video rendering tour of this house and get a better feel for it before ordering the floor plans! (Then scroll to the top of home plan page)

The approximate (rough) cost estimate to build this house in Raleigh, North Carolina as of June 2010 and as per the “Cost to Build” calculator (using “Average Quality”) on my “Getting Started” page is $242,085 (including a General Contractor’s markup of $28,406), or $119.48 per sq. ft.*

I used the “Average Quality” selection on the calculator all the way through the selections on that part of the calculating process.

By acting as your own General Contractor you could reduce the estimated cost to build to $209,316 and therefore the cost per sq. ft. to around $103.31 per sq. ft.

You do this by eliminating the General Contractor’s markup, as well as some of the insurance costs and the equipment rental costs.

I never hire “labor by the hour” and I recommend that you shouldn’t either. Therefore, the only insurance expense you should have is “Builder’s Risk Insurance”, which should run approximately $2,000, and equipment rental should be zero as subcontractors, who you will be hiring on a contractual basis, provide their own equipment.

Here is a copy of the entire cost estimate breakdown. Click on it to enlarge.

Have fun,
Carl
* Until you actually start getting bids and entering them into your own spreadsheet (see FREE spreadsheets), it will remain approximate.

Everyone should keep in mind that the cost to build for this example, or any house plan, can vary considerably depending on actual bids for labor and material, design, and the quality of construction.

Cost to Build a House in 2010

I own a piece of property in some high desert mountains south of Socorro, NM.

I am thinking of building a retreat/vacation cabin.

I am having contractors tell me the cost should be between $100 and $115 per sq ft.

I think at this time in the economy I should be able to do it for $50 or $60.

Am I just dreaming or is it possible?

Tom B.


Good question! A question that is surely on the minds of many people.

I picked what I think is an attractive house for the area to run a cost to build in 2010 analysis.

Check out the approximate (rough) cost to build this house and the answer to your question on "Cost to Build a House in New Mexico"

Good luck,
Carl

How Much Does It Cost To Build a House in Massachusetts

Good afternoon Carl, I have to admit, I love the posts you have up here as
they are very informative to me.

My wife and I have selected a house plan to build from Don Gardner plans.

The plan is The Manchester - House Plan# W-718.

Would you be able to use this as one of your examples?

Thanks!
Michael
Hi Michael,

Sure, I’d be glad to.

You chose an attractive “Traditional” house plan from Donald A. Gardner Architects, Inc.

They define a traditional home plan as a home that “typically features multiple gables, hipped roofs and covered entryways with a clapboard or brick façade creating a grand appearance.”

Their traditional house plans (Don Gardner plans) feature open floor plans in various sizes from 1600 - 5000 square feet.”

The Manchester is a 3 bedroom 2.5 bath Traditional home that has 2,261 Sq. Ft. of total living area and a Bonus room of 235 Sq. Ft.

I ran a cost to build estimate for this home plan for Pittsfield, MA 01201 (is that west enough?) with brick veneer and an unfinished basement and came up with a total cost to build of,$319,147 (including a General Contractor’s markup of $38,596) or $ 141 per sq ft of heated living area.

Without the brick veneer (using Hardboard or inexpensive stucco siding) I came up with a total cost to build of $288,760 (including a General Contractor’s markup of $34,700), or $128 per sq ft of heated space.

Except for the brick veneer (Quality Class # 2) and the unfinished basement (quality Class # 5 or better), I used the quality class # 6 throughout (Minimum Standard Quality) for all the other categories,

Single-family homes vary widely in quality and the quality of construction is a major cost variable.

These estimates are "rough" estimates for May, 2010.

Land is NOT included in the estimated costs to build.

Well Michael, by using the “cost to build calculator” found on my “Getting Started” page you can perform your own cost analysis, varying the quality of construction to fit your budget.

Have fun,
Carl