If you live in the northeast, you’re bound to see all kinds of houses- from brand new to homes older than our country itself. There’s also a myriad of construction options including conventional ‘stick framed’ homes to panelized, modular, solid log, timber frame, post & beam, ICF (insulated concrete forms) and countless others. Then there is the daunting comparison of new home construction and how it relates (or doesn’t relate) to existing homes on the real estate market. The options and features are seemingly endless, so what is considered “Standard”?…
Unfortunately, the answer isn’t that easy. If one watches HGTV and popular reality TV shows, one would surmise that it’s okay to expect features like granite counter-tops, hardwood floors, tiled showers/tubs, cathedral ceilings, complex roof lines and bump-outs are the norm. The reality is that many of these features are considered part of the ‘luxury’ home market and are unfortunately not synonymous with the typical new home construction budget. Bear in mind that on the resale market, a buyer is often comparing homes that were actually built 10, 20, 30, 50, 100 or even 150+ years ago. Homeowners will often try their best to update an older home with a new deluxe kitchen, saying goodbye to the mustard yellow appliances and speckled Formica counter-top in favor of new stainless steel appliances and granite counters. Yes, this is an update, but what about the insulation, windows, that stone foundation and other structural features??? Hardwood floors were typical in homes until the mid sixties when wall-to-wall carpet became the rage, since they were one of the only options out there. Back then single pane windows were also standard and drafty homes were too.
It is very difficult to compare ‘standard’ features of homes on the resale market to new construction, because when building a new home- everything has to be completed to current building code requirements. In our home state of New York, construction features that were unavailable when older homes were first built (or are now sought after upgrades to homes on the resale market) are actually required standards for all new construction. In reality, every new home built in NY today meets the qualifications for Energy Star certification- its just a matter of deciding if a homeowner wants to spend the money on the required inspections to get the certificate. Current building code requirements provide new home purchasers with extremely energy efficient homes, especially when compared to a house build 20 years ago or more. A 1970’s home was lucky to have an R-9 insulation while a 2018 home has at least R-21 in the walls and typically upwards of R-49 in the roof as well as high R insulated, hurricane rated windows, insulated basements and much more. All of these code updates are great, but they also drastically influence the cost of building a new home when compared to purchasing an existing home.
With strict building requirements for new construction, a customer’s budget then becomes limited when determining interior finishes of the custom home. I consistently hear prospective clients tell me they “don’t want anything too complex or fancy” and “ their tastes are very basic and simple”, but then in the very next breath, state “well we do want hardwood floors throughout the home and well, yes we do want granite counter-tops, a wrap around porch and of course we want a wood burning fireplace and a 2 car garage is a must..” It often bodes the question, “If you think those features are standard, what do you think is luxury?” The fact is all of these features are either upgrades or luxury accoutrements. It isn’t unreasonable to expect to fit one or maybe two luxury features into the custom home budget, but if you’re looking for several of these luxury features, you’re building a luxury home and the price will reflect it.
With respect to flooring alone, in 2018 one should anticipate the installed price of premium carpet or Linoleum (quality products not entry level/builder grade) to be around $3 per square foot, quality engineered flooring like laminate or premium vinyl to be $5-7 per square foot and engineered ‘hardwood’ floors (meaning veneer wood mounted to interlocking substrate) start around $8 per square foot installed. If a home buyer is looking at traditional hardwood or tiled floors, they should expect starting prices to be $8-10 per square foot and up as they become more exotic or complex. That translates to hardwood floors costing 2-3 times that of carpet or engineered flooring- in other words you can in most cases carpet the entire house for the cost of hardwood in one room! A high quality Formica counter top may cost $1000-1500 for the average kitchen, while a solid surface counter (granite, quartz, soapstone, Corian) can cost $5000-8000 for the same kitchen. Want a fireplace? A stand alone wood-stove or basic gas fireplace may be installed for as little as $2500, while a wood burning insert will cost at least $5,000 and that floor to ceiling masonry fireplace with stone facing you like from your favorite home magazine can cost anywhere from $25,000 to $100,000! A front entry porch that spans the majority of your home front will run you $15,000-$25,000 and an attached 2 car garage is likely going to set you back an extra $25,000. If you’re buying a vacant piece of land that needs well and septic, its normal to anticipate that the well will cost around $10k and if an engineered septic is required, they’ll start at around $18k. Ever wonder why homes in developments and suburbia have very short driveways? Without knowing soil conditions, a new home builder will estimate the potential driveway cost at $5k per 100’- and that’s a solid, crusted stone driveway, not paved and seal-coated. Are you now starting to see what we’re trying to help you understand the difference between custom and luxury???
That is why most semi-custom home builders and developers typically include engineered hardwood floors for maybe one or two rooms of the house, premium linoleum or vinyl in the kitchens and baths and carpet in other rooms. They’ll focus on the ‘WOW’ factors- a nice entry door and a nice kitchen, maybe even with that granite counter-top, but then they will go to much more entry level ‘builder grade’ for other areas of the home to keep the house within a desirable price point. Fiberglass tubs and showers, basic trim, baseline vanities, etc. It maybe lower quality, but at least its brand new and priced to sell. It’s also important to note that homes in developments have a significantly lower price point, because their infrastructure divides the cost of utility installation amongst all of the lots compared to individual well and septic for single building lots without public utilities. Developers and semi-custom home builders shy away from offering many options, because they know that prices will skyrocket very quickly and they may lose out on a sale.
So what about a custom builder? When working with a new customer, we explain that custom doesn’t inherently translate to more expensive. A custom builder is one that is willing to dedicate the additional time to work with a client on creating the unique building that has the floor plan and as many of their requested features as possible within their budget’s limitations. A good custom builder will guide their client through the process and reign them in whenever a requested feature is likely to negatively influence the preferred budget (and sometimes that’s inevitable). The process of properly quoting a custom home is typically longer, because each single home built on a single property is unique; a one-off creation with so many variables from individual site requirements and design complexity to material, finish and trim options each of which can vary from one property and one home design to the next. If you were to request 3 separate quotes- one from a developer, one from a semi-custom builder and one from a true custom builder and each is supplying a proposal for the same building lot, with the same house and the exact same finish, guess what will happen? The price will typically be VERY similar. The issue arises when you take the same floor plan and then ask those three builders to price it without an exact call out sheet for every line item in the home. The custom builder’s proposal will likely be higher because they listen to your requests and price exactly what you want. The semi-custom builder will have a lower bid, because they will price based on what is THEIR norm and typically include lower level finishes and then charge you a premium to add any of your requested upgrades down the road. The developer will probably refuse the project, because they would rather stick to developments where they know their fixed infrastructure costs and have already worked out the costs for completion for each of the 3-5 home designs they’re willing to build in that subdivision. Properly quoting a home is a time consuming task- it typically takes 50-100 hours including multiple site visits with subcontractors and material suppliers over a month or more once blueprints are in hand. I specifically say ‘blueprints’, because its frankly impossible to quote a home from a floor plan sheet- that’s a marketing and sales tool. Blueprints are building tools, so if a prospective builder gives you a price based on a floor plan sheet, understand you get what you pay for and its likely as accurate as the time and money you invested.
As a custom home designer and supplier, we like to say that “the beauty is in the details”. We focus on the relationships we build and to the unique needs, tastes and lifestyle of each customer. We feel that it is important to educate each prospective new home client as to how their site and finish preferences will influence their budget. Without a design and blueprints in hand, we will try out best to ballpark realistic turnkey construction cost estimates based on all builders average costs within their region, rather than simply providing the ‘lowest possible starting at price’ which is likely never attainable; a practice by too many home builders in an effort to make the sale and assuming the customer will fork over more money to get what they want once under contract and the change orders start rolling in. Our hope is that by taking the time to educate each customer and developing baby steps of commitment along the way, we will develop and earn the trust of each client through our actions. Building a house is typically the most expensive investment we make in our lives, so its very important to not be solely price conscious and choose the least expensive bid, it is important to work with a reputable builder that understands your needs, lifestyle and budget and can supply a quality home that will last. Maybe your budget can’t justify the initial cost of that granite counter-top, but wouldn’t it be better to upgrade later with the knowledge that your new home’s structure will be energy efficient and built to last with quality structural components? Swapping out a kitchen counter-top is one day job, correcting and constantly repairing an poorly built or aging old home is a much more daunting task.
Would you like to learn more about new home construction, properly budgeting for your project and more??? Call or email Dorini Custom Homes today to learn the many ways we can assist with making your dream of owning a new home a reality…
-Justin Metz, partner- Dorini Log & Custom Homes www.dorinihomes.com