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How much does it cost to build a home? Main Idaho Real Estate Insights

These are the most commonly asked questions if you are considering building a new custom or semi-custom home.

So you want a new home and you have to balance price, location, and amenities. You can't find an existing home you really like because you know exactly what you want. Why don't you build your dream home? How much does it cost and is it more expensive than buying an existing home? All of these questions will get answered in this article.

Is it more expensive to build a home instead of buying an existing one?

The answer is a solid 'No.' This may seem counterintuitive, but with a semi-custom or fully custom home, you can get the ameneties you want at a price point you an afford. Rather than waiting and searching to find the perfect home, why not build it and get everything you want?

The big question is: how much does it cost to build a home?

The Ultimate Guide to New Communities in Boise IdahoIf you want to know how much it costs to build your home—knowing now that is costs less than the purchase price of an existing home—one of the easy ways to get an idea is to look at the home in a neighborhood you are intererested in. Find out the square footage in the existing homes in the subdivision and do the math. Some neighborhood HOAs have minimum square footage requirements, so you at least have a baseline to start from. From there, the maximum cost is the top end of your budget

Some people want to build it themselves to try to cut costs, and builders always laugh because they know that it will cost more. Want to know why?

It is rare that owner-builders exist, let alone have the knowledge, experience, and industry connections to ensure that building your own home is worth it, both financially and structurally. Luckily, there are plenty of semi-custom and fully custom home builders in the Boise area to choose from.

Why do costs differ so much from one builder to the next?

There are basically three categories of home builders: production, semi-custom home builders, and custom home builders. Each has its own benefits and disadvantages. Obviously, production builders have the best pricing and largest inventory to choose from. They buy everything in bulk: the lots, products and materials, trades, and so on. Semi-custom home builders are smaller in scale but still have efficiencies where they can reduce costs. Part of it is based on building the same floorplans, with minor modifications when it comes to amenities, design styles, and layouts to suit your wants/needs. A custom home builder starts from scratch on everything. The process is the same but it has to be calculated for each item and step. There are no efficiencies because each home is slightly different. You and the builder start with the floor plan and hand pick everything up to faucet materials and colors.

How much does it cost your builder?Boise Home Builders

Many have questioned these numbers but we have tested them numerous times and they are accurate.

  • Production Builder: $40 to $50 per square foot. The more square footage in the house, the lower the price
  • Semi Custom: $55 to $70 per square foot. Volume is a factor for the builder's costs.
  • Custom Home Builder: $70+ per square foot.

So your first thought maybe that that is quite the discrepancy. Keep in mind these are not the same house. The difference between a production home and a fully cusom home is vast. The biggest differences are price, location, materials, and amenities.

Should I have a real estate agent before I start building a house?

Absolutely.

Having a real estate agent is top of the list when it comes to anything real estate. Even if you are planning to build a home and not look at any existing homes for sale, it is in your best interest to have an agent represent you before you talk to a builder. Here are 4 reasons why:

  1. They will watch your back. Select an agent from an independent real estate company, not an agent that represents the builder. An agent working for the builder has the builder's interests in mind. An independent agent will work entirely on your behalf and represent your best interests because they know what you want before you talk to a builder.
  2. A local agent will have insight about the builder. An experienced agent will know the reputation of the builder when it comes to build quality, customer service, client satisfaction, and previous build locations. Using that knowlege, your agent can provide recommendations for who to talk to during the build and (most importantly) who is the best choice to build your home.
  3. Your personal liason. On a related note to number 2, your agent can act as your liason between you and the builder. They have experience dealing with the builders and their representatives when it comes to negotiating, construction updates, and contracts. Always talk to your realtor before talking to the builder to make sure everyone stays in the loop.
  4. Everything in writing. Building a home is a pricy venture, and you want to make sure your investment is protected. Having an agent represent you will ensure that everything you want is in writing before any action is taken, and that those promises are acted on.

Note: These may make it sound like the builder is the "bad guy". They are not the bad guy. Everybody is looking out for their own best interests—it's the foundation of business. Having an agent on your side helps make the enitre process easier for you and the builder.

So why should you build a home?

Bottom line: When you buy a home, you pay market value, maybe more. No matter what the cost when building a home, the builder is going to ask for a market price. When you build, the price is based on building and material costs. It's a win-win: you don't overpay and you get everything you want.

Trey Langford
Founder

 
Posted by tlangford at 3/25/2010 3:25:00 PM
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