In order to get an accurate estimate for your project, Blue Ridge Custom Homes, LLC will need to meet with you and ask some questions about your project in ordre to provide a detailed look at potential building costs. Costs can vary widely depending on factors like lot conditions, shape and style of home, level of finish, energy efficiency options, etc. Having said that, here are some general guidelines:
Cost per square foot
Generally, when we speak of cost per square foot, we are talking about finished square footage. However, it is important to consider that unfinished square footage is not free. Average price per square foot described here will allow for a typical house that might include a porch, garage, and some sort of outdoor living area like a deck or patio. If we use more custom finishes like natural stone flooring and siding, synthetic decking, pavers, larger garages, lots of outdoor living space, screened in porches, basements, etc. additional costs will apply. And, obviously if the unfinished footage is large compared to finished footage, this causes the overall cost per finished foot to be higher. There are also lot site specific costs like cash proffers, permit fees, clearing, driveways, etc.. .that can make prices vary by many tens of thousands from one lot to the next.
We don’t typically do a lot of homes that would be defined as “starter homes” and have very basic levels of finish in them. So, I will speak mostly to more custom situations like we normally encounter. Generally, turnkey costs will start at around $90 a square foot for a custom home in ideal conditions with an efficient floor plan. If you look at the average house in our gallery you will see a pretty high end level of finish and those average more likely in the low 100’s per s.f. At $150 a square foot, we tend to see a house with pretty much all high end, upgraded level of finishes and this house will be among the nicer homes you are likely to see (items like theaters, specialty flooring, custom appliances, custom outdoor living areas, etc. will be present). However, you can see an inefficient floor plan with lots of outdoor space, and expensive lot to deal with, a basement, etc… and see prices around $150/ s.f. even though the level of finish is not as high. Obviously, with price, the sky is the limit and you are bound only by your imagination and your budget. At $200 a foot, we are building products like you see illustrated in the nicest home building magazines and the “wow” factor is pretty intense. In a cost-plus scenario, customers will tend to save around 10% under the cost of a traditionally priced home. These costs are for the home only and do not include lot costs.
It is worth saying that there is an entry point for a custom, scattered site home. While it can vary, it is unusual to see houses that are under the 250k mark. By the time you consider the site costs, the unfinished spaces, and the basic features you see inside an average home, it tends to be hard to produce anything of a custom level for much lower than that. For customers whose price point is below that level, they may find they can be served better by a builder who has a production style business model and builds the same houses over and over again in controlled conditions and with designs, finishes, etc… that are very focused on value rather than aesthetics.
Shape/style of house
While the above price information is meant to be helpful, many factors can skew the price significantly. One of those is certainly the efficiency of the shape of the plan. A two-story house will save approximately 10% compared with a ranch that has the exact same square footage. This is because large structural elements such as the footing, foundation, framing, roof, insulation, etc. can be used to cover twice the square footage without increasing their costs. Similar economies can be found with the use of basements and finished attic spaces. These areas are often constructed unfinished and then finished later in order to allow us to meet your budget now but allow you to have more space later without moving to a new house or performing expensive additions. While not exactly true, you can sort of figure half the cost of finished space when considering unfinished space that has a roof over it.
The more square a house is as opposed to long irregular shapes, the smaller the foundation and roof will be and the more cost-effective the design is. The more “bump-outs” or projections the house has, the more the price per square foot will increase. Basically, square shapes with simple roof lines that stack the footage (meaning the second floor footage is equal to or greater than the first floor footage) will be the cheapest to do per square foot. So, try and count the exterior corners of the home and you will get a sense for the efficiency of the design based on that number. With 4 being extremely efficient, 10 being average, and 20 representing a pretty inefficient design.
The overall size of the house will also affect the cost per foot. The larger a home, the lower the cost per square foot. This is because some “fixed” costs such as water source, sewer, driveway, garage, clearing, etc. will generally be the same or close to the same but if those costs are averaged into a larger house, the overall cost is lower. For example, a $5,000 well will cost $1 per square foot on a 5,000 s.f. house and $2 a s.f. on a 2,500 s.f. house. This same math applies across many phases. Since houses with low square footage of finished space still tend to have garages, porches, and all the other site costs, the cost per square foot tends to be higher. So, you can expect small houses to cost a lot more per s.f. compared to larger houses with the same fit and finish.
Cost-plus construction is generally the least expensive way to build a new home. In cost-plus construction, we build a home for our actual builder cost plus a percentage as our management fee (intended to cover overhead and profit). This is basically an “open book” process where the customer has access to every piece of information we have in terms of estimates, costs, invoices, etc. Our customers get a weekly update on exact costs from that week’s payments, an updated projection based on changes, selections, actual costs to date, etc. and copies of every invoice we pay.
The customer will see every invoice, every projection, and every cost that is used to build their house without any mark up for the builder. Thus, the customer gets “contractor” pricing. Then, Blue Ridge Custom Homes charges a fee for overhead and profit based on a 15% margin. With only 15% built into the process for our company, there will not be better pricing available on any apples to apples bid from another home builder. There is simply not a viable business model that allows for a smaller margin. Given the size of our company, we are spending 20 million dollars or so a year (of course this varies), and thus we buy at better prices than our smaller competitors. And this buying power generates savings that go straight back to our customers.
In a “fixed price” scenario, a builder will add on overhead and profit of somewhere in the low to mid 20% range, then another 5% or so for variances from the budget. So, in cost plus, the customer can save 10% or more on average.
There are two reasons that we can cut our profits on cost-plus project. One is that the overhead and profit number is guaranteed. In a “fixed price” situation, the builder will absorb any variances, price increases from vendors, etc. Since the actual gross profit will only be determined after everything is complete, the builder must plan for some worst-case situations in his budget. In cost-plus this uncertainty does not exist. Since we have less risk, less profit is also appropriate. Secondly, Blue Ridge Custom Homes is designed to operate very efficiently with a “lean” business model that allows us to have a viable business with lower profit margins than our competitors. We do not hold large amounts of land, build model homes, have sales staffs, standing inventory, advertising programs, etc. which allows us to charge our customers less and still maintain a measure of profitability.
Another feature customers like about cost-plus is just being able to see where there money is going. Our detailed estimates help you to know exactly what you are spending your money on and thus ask questions, make cuts, etc. with the use of this extra level of information. See an example of what a budget looks like below.
The cost-plus format is very beneficial to customers when it comes to upgrades and changes as well. These represent major profit margins for many builders. Many builders will charge a change order fee for every change order. And, they will build in 100% margins or higher into changes. But, with our system you pay nothing for changes except exactly what our cost of that change is and the associated margin on it.
Cost-plus is not for every project and it is not for every customer. We would like to speak with you in further detail concerning this approach and to show you what a real house looks like and answer any questions you may have. In addition, we can refer you to past cost-plus customers so you can see how well it worked for them.
|~ ~ ~ PHASE ~ ~ ~||PROJECTED|
|PERMITS / PROFFERS||2,765.80|
|~ ~ ~ 1st DRAW ~ ~ ~||22,956.30|
|TRUSSES, ENGINEERED LUMBER||6,351.90|
|~ ~ ~ 2ND DRAW ~ ~ ~||58,393.33|
|~ ~ ~ 3RD DRAW ~ ~ ~||59,201.95|
|~ ~ ~ 4TH DRAW ~ ~ ~||43,917.91|
|~ ~ ~ 5TH DRAW ~ ~ ~||15,640.00|
|REAR DECK/FRONT PORCH||5,934.00|
|TOP COAT DRIVE||1,200.00|
|EXTERIOR RAILS, POSTS||2,500.00|
|~ ~ ~ 6th DRAW ~ ~ ~||16,248.72|
|Estimated Cost of Construction||216,358.21|
|BRCH Overhead and Profit 15%||38,180.86|
|Total Cost of Project||254,539.07|