The Hard Conversation—cost per square foot

penny1As in any relationship, there comes a time when you have to have a difficult conversation. The elephant is in the room. In the building process this is generally called, “The cost-per-square-foot conversation,” and it’s best to have it right from the start. To begin with, determine your budget, which should include the cost of land, the architects, permits, engineering, builders, landscaping and interiors, including furniture. While it’s easy to want to design first and estimate costs later, it’s not in anyone’s best interest.

Builders and architects need to have the most current square foot costs—real-time knowledge—to make educated decisions. Market conditions make a huge difference. For example, during the downturn apprentice plumbers and electricians didn’t have the work to give them the appropriate amount of experience. Therefore, there are fewer people in the skilled labor pool which affects both labor costs and timeframes. Once the design team knows the budget, they can figure out size of house based on preliminary discussions and historical estimating. The cost per square foot is determined after subtracting the cost of the architectural fees and landscape from the total budget.

You may be building a smaller house but it could still be a higher cost per square foot. It’s easy to get off base when you start looking at finishes and the details that go into them. Things such as plaster on the ceiling, decorative wall paneling and high finish floors can easily jump up the square foot cost. It’s important to have a clear vision of what you want. If not, allowances will be used for budgeting purposes, but the exact costs could vary widely.

The moral of the story? Acknowledge the elephant in the room. Be clear about what you want and what you can afford before you get too far down the road and start spending money toward something that may not work.

A good builder will aid in diverting a tragedy, we all know the last thing you want is to get into a position where your dream house doesn’t get built.

Here’s a great post on this topic.  10 Things you need to know before comparing cost per square foot