You're going to find that asking for "ballpark" pricing is going to get you exactly that, which probably explains the prices you're getting.

When you're asking builders for prices, are you showing them plans of the house you want to build? Are they taking time to actually price it out or are they giving you a number immediately? If they're not taking time to actually price it out, then you're simply getting a "ballpark" figure, just like your asking. The actual number after they do all the calculations could actually be lower but they won't know that until they do the work on the bid.

Lots of people here will tell you that giving a price per square foot for building a house is basically a worthless number. You need to know what it's going to cost to build *your* house on *your* lot with *your* upgrades/interior and don't worry about cost per square foot.

Good luck. It's a frustrating process.

Yes, I am showing them the plan, but they are not pricing it out yet, just ballparking during our interviewing process. The reason I even ask for a ballpark figure is so I canknow ROUGHLY how big a house we can afford-- not asking them to be accurate--just a range. Don't get why the ranges would be equivalent or higher on a custom home when I already bought the lot.

Our "ballpark" figure for our blueprint, without land, was 265,000. The actual figure in our fixed contract was 227,000.

I think they have to overestimate when guessing. I would have been really upset if the ballpark was 300,000 and we wasted all kinds of time sending out bids only to find out that it was really 350,000 which would be completely out of our price range.

You may be expecting too much from them during the interview process. Be sure you all are referring to the same thing when talking "$/sf". Where we are it refers to the cost of the house box, nothing else. I'm not sure why you are trying to see how big a house you can afford if you already have the plans to show them? Going to spec home open houses to get a feel of the price of a custom home is like going to the Yugo dealer to get an idea of what you will have to spend for your new Mercedes. Perhaps the biggest factor in your concern for the costs you're getting is that you talk about how BIG a home you can afford. The difference between a spec home and a custom one will be in quality and features and those will make a huge difference in the price. A spec home can be as big as any custom home. But do you want a $50 Home Depot shower set or a $1800 rain shower with a separate hand held unit and thermostatic valves? Will that shower be a slide in fiberglass unit or a custom tile shower? Both give you a functional shower, but one will be $3500 more than the other. That's how the entire house will go. And these builders you are interviewing don't know what you will spec out. The neighborhood doesn't make any differnece in the price and "we do not want anything expensive in the way of interior finishes" is something they've heard way too much. Do you think there are inexpensive interior finishes? Check around with bank loan officers and realtors for what they find to be the cost of custom homes in your area. But I think you are expecting way too much of these contractors. Tom

That ballpark figure is going to be a low ball number to begin with, so you might try to get used to the idea that it will cost more, despite owning the land. You will have to put in the infrastructure as well as build the house.
And spec houses may be running cheaper than custom houses due to the fact that there may a glut on the market, they HAVE to get rid of the inventory. And the builder may already knows how to build the house as he may have done it before. You also don't know what quality materials were used.
In the end, a custom house will likely cost more per square foot than a spec house, whether you own the land or not.
Please educate yourself on the details that will go into your house and then do proper, multiple bids with builders. You can always negotiate from there.
Good luck!

A spec house is always less than a custom house b/c it is one where the builder got to choose the plan and all aspects of the home, usually using middle end finishes/materials. It may be a house the builder has built before, which would make it even easier to build. In a custom home, on the other hand, the owner chooses everything that goes into it, and even if those items cost the same as those the builder chose for the spec home, it is more time consuming for the builder to have to work with the owner on every little item. Plus, in a custom home, owners usually want to change this or that (make this room, window bigger, etc.) which is more hassle and more time than when the builder decides all that. This is not only my perception but how it was explained in "The New Home" book that I just read for tips on building our home. I hope this helps!

I can't believe you're trying to compare spec houses to custom houses. Think about it this way - the spec house you're looking at has probably been build 10x to 1000x before. The builder doesn't even need to think or do anything as he has the cut sheets, the lumber package, the fit/fixtures all down. He just has to sign the check and his subs and crews will build the exact same house over and over again.

On the other hand your custom house will actually require all the trades to look at an engineer the hvac, plumbing, lumber, etc etc. Not only that - it will be a bit slower as they've not done it before. If you want similar or lower pricing for a spec house - pick an exact house that they've done before and you should get a lower price. Anything that deviates from that requires people to use their heads and anytime that happens - it /will/ cost more.

One more thing: who were the builders on the spec houses? the bigger the company the lower the price they can afford to sell their spec houses for. You know, savings due to mass production. Better purchasing power when you order by the railcar load instead of for one little custom house, built on one isolated lot away from any of your other builds. Can't build in tandem, running each trade down the street in sequence.

I have no idea what the difference would be, I wish I did. Other than guesses you're gonna have to just get bids. As a starting point, if you're seeing spec houses like you want and can just barely afford them, then you can't afford the identical custom house. Because your builder simply can't build it for the same price.

Good luck!

I agree with OP's said about 'ballparks'-they may go high so that you will be pleasantly surprised versus shocked when you get your actual bid. On the other hand it depends on the philosophy of the builder as well, some like custom work and some do not. The ones who don't might go high to compensate for that. Another possibility is that they are trying to 'qualify' you and see how you react and get an idea of what you can afford, just like you would not want to waste your time with a builder who could not deliver the home you wanted the builder would not like to spend time working with a potential client only to find that the budget was completely unrealistic.

Having said all that, some 'spec' homes are comparable to custom homes in our area. There are builders putting up large homes on acreage with high end finishes. If we look at these homes and compare to our cost to build it should be 'in the ballpark' but if we are in a subdivision looking at production homes where they are putting in 100 homes with basically the same floorplan just flipped and different elevations then that would not be comparable to a custom home.
When we were first starting out researching, we spoke to a builder who had built the exact plan we were considering on some acreage near ours, he gave us a price off the top of his head for the exact same house as built on our land. We told him all the conditions of our site-all utilities & drive in and permit cost. He gave us a price that seemed very high, my husband's opinion was that the builder was testing the waters to see if we would go for it. After more research we have found that this builder is just 'high' for our market.

Another example, over the weekend we toured about 12 homes as part of a local tour. We talked to a builder in one of the homes. It is a large company that builds spec and custom. Their spec homes bring in their custom business often times so they try to do a great job with these homes.
The home we were in had some unique features that we had questions about so we talked to the builder about them and he asked us if we were interested in the house or were going to build elsewhere. We told him about our property, and he asked what we thought of the home we were in- we told him it was great and it was fun to tour because it was very similar to what we would be building. The house we were in was a daylight basement plan just under 3800sf listed at about $155 psf (including land, listed by a realtor, etc) he 'ballparked' us at $130 to $150 psf for the same house on our lot. He said that should be 'safe'. The highest ballpark we had been given up until that point was $127. Perhaps he was just trying to give us 'worst case' so we would be prepared.
It is also possible like some have pointed out elsewhere on this forum that the prices will vary based on what an individual builder needs to earn profit wise on any particular project. You could explain your thinking to the builder you are interviewing and ask his/her perspective on the pricing difference and perhaps that would give you the answer you are looking for.
If you know anyone who has recently built a custom home you might ask them how their costs compare to the numbers you are getting.
I hope something in all that helps!

Spec houses are cheaper for the reasons listed above. Additionally, custom houses are more expensive because the builder has to deal with the homeowner. Even if the two houses were identical, the non-spec house would be more because the builder has the aggravation of dealing with the homeowner.

I don't know about the prices you were quoted, but around here when discussing "cost per square foot" it never includes land because it is such a variable cost.

I don't know where you are, but $100 per sf for for a custom house is unbelievably cheap.

For me, I would WANT them to guess high. It is SO much better to find out that you 'saved' money rather than drastically overspent.

I'll get to the point. I've had a few homes built.
The more custom, the more time & money it will cost.

For a similar home, not being 100% custom (100% custom is when you even pick out outlet covers), a real rough gestimate is 10% more for bottom line items (builders models). Another 10% for middle of the road fixtures, vanities, electrical etc.

I've always gone with some basic things that the builders gave & some things I wanted better or different. The house plans were designed by me with the help of an Architect. The last one still cost me approx 15% more than the other homes in the neighborhood.

Building a custom home is very expensive & you must have a good cushion for the unexpected. You cannot compare that to a cookie-cutter spec home, where everyone can build one together with their eyes closed.

Bottom line: A 95% custom home (meaning you will go with some standard builder's choices),will cost approx 20% more than similar spec homes, providing that the items you pick will be middle of the road cost/quality.

deanie

I did the exact same thing and had similar experiences. You have to put yourself in their shoes - how can they possibly give you an exact number without knowing the specifications for the house and what your quality requirements are for the finishing materials?

I used the square footage ball parks for rough budgetary planning. The contract price won't be known until you have a plan (so they can do a take off) and you have made selections on the finishing materials. The end cost won't be known until the house is finished. Note that many posters on the GW have had a large (10 to 20%) difference between the contract price and the finished cost.

I would use the ballpark numbers to get an idea of the range of house you might possibly afford. If you can barely afford a certain square footage now at the planning stage - then beware - becuase the house will likely cost much more than your ball park estimate.

The residential builders have volume on their side to keep costs down. They do have higher overhead, but don't assume that custom means lower cost. Custom building is at least the same cost (but usually higher) than large residential builders for the equivalent square footage. But a custom builder customizes the product to your requiremments and should provide much better quality (assuming you pick a good builder). Residential is a production line, with a limited set of menu options,and quality that can range from crap to decent.

The ball parks you have sound reasonable for Tenn. Just add 20% to the highest number you have received and that should be good enough to determine if what you want to build is possibly achievable. If you can't make the the budget close with this - then you might either pick a smaller house plan or think about trades on materials (like siding vs brick/stone).

Also - keep in mind that there may be more costs that are not included with the builder square footage numbers. They may be quoting you costs for the structure only. Ask them if the ballpark figures include everything including site development (lot clearing, septic, driveways, etc). I found that most of the builders quoted me square footage numbers that did not include these items - and they can be significant depending on your lot and utility situation.

When a land owner approaches a builder, the builder sees somebody who has money and prices the product accordingly.

Especially with custom homes, which are complex products, the sale price is not necessarily based on labor and material but on the maximum amount of money the builder can get. Not saying this is bad but this is how it works.

Just talked to our lender. She cautioned me about builders underestimating the cost per square foot at the "ballpark" stage. Says she finds they always do, because they want the business. And they know all the other builders are giving low estimates for the same reason. But also says, with the uncertainties in the housing market right now she's finding that builders are tending to give low-ball numbers even more than usual.

So, if that's of any use to you, knowing you're already thinking the numbers are too high, you might want to prepare yourself for the reality that they might in fact be lower than the actual cost will turn out to be.

Heartbreaking as that is, we're now facing having to modify our almost-completed design to reduce the cost before we actually build. Knowing that even with that, there will be unexpected/uncontrollable things that will drive the cost up during the build. Better to go in planning a more modest home (and we thought we already HAD, using as you have, less expensive finishes, etc.) Take out the ax!

Here's another example for me of how people use building terminology differently (maybe based on regional differences?) To me, a Spec house is one in which the builder chooses the plan and all the finishes. It could easily be the first time he/she has built it. It may or may not be the same price as what a custom home may be in the exact same area. In our case, the Spec home going up across the street is actually more dollars/sq ft than what we ultimately paid despite the fact we have a few higher end selections.

To me, a Tract home is one that has been built over and over again not a Spec home. But what do I know? ;c)

I guess my point is that Spec homes are not always cheaper.

Lindy

Not sure if anyone else mentioned this but a custom builder usually only builds a few homes per year. So he may not have all his equipment on site as a typical spec home builder. A spec builder builds home in the same area generally. For the custom builder each build takes him to different lots across town. It also costs more to move his subs from site to site. It is more expensive for him to build one home than many as the materials will cost more as he is not buying them in bulk.

You might be better off asking him what percentage his take is on the total house build. His fees could go from 10-20% of the cost. We got ranges from 15-17% from the three we interviewed.

I wish we could build for $110-115 sf. Here in the northeast, We've been ballparked $150 sf mimimum, and $175 to $200+ sf is much more common.

And those numbers do not include land or sitework.

I think your ballpark estimates have been very fair given the limited knowledge the builders have about you and your project.

When I called our GC to see what we should insure our house for he quoted $210 per sq ft to rebuild what he built in 2001. He's not including foundation, which would most likely not be damaged by fire.

In 2001 the cost of *everything* (including teardown, driveway, terraces, appliances, sprinkler system, other extras) came to about $135 per sq ft. We used the foundation of the teardown and added 900 sq ft on crawls. Didn't have to run new water or sewer lines. Permits were about $5K. No penalties for teardown.

I'm 30 miles north of Chicago.

As a proj mgr for a high-end custom builder in Texas: The terms are spec, tract and "as-built". A spec home is a home built to completion without an owner and then sold as a "finished home". An "as-built" is a custom home built for an owner...with their plan versions, installs, etc. Tracts are non-custom homes with possible "purchaser choices".

As-builts are the same as a spec home except for the items mentioned above...no owner involvement, builder chooses, building location, materials and perhaps most importantly - built when they want to. Spec homes tend to be built during a "downtime" to keep crews busy or on a lot they've had difficulty selling alone and for these reasons alone can be cheaper.

We are currently buiding our own home and even though we are both project managers in the bldg industry we got exact bid quotes. It will cost us more simply because our subs don't normally work near our land...its cheaper for them to work crews close to each other.

Go with the builder that builds the best quality home, not the lowest price. Look at their model homes..if you see poor quality in a home that should be the best they build - walk away. Even with our home its better to pare down the house then to loose quality. Find some subs (if possible) and ask them who would build their house if they chose. On the builders side - my husband held a house up for 6mths while the owners picked out carpet...then they screamed because it wasn't ready for Christmas...lol
Terry