How Much Does a Home Cost per Square Foot?
When a prospective customer wants to inquire about modular home prices, their first question is, “What is your price per square foot?” This is probably one of the most frequently asked questions we get from prospective home buyers. Any answer we give is probably useless and irrelevant when it comes to comparing home builders. However, it seems like an easy question to answer and would seem to allow simple comparisons which is why we are asked it so often. It is also a question that we cannot answer simply. It is like asking car dealer, “How much do your cars cost per pound?” to see which car lot has the best price or asking a restaurant, “How much does your average entrée cost?” to compare it with its competitors.
The above questions contain so many variables that it is impossible for anyone to answer them accurately without first asking several additional questions and gathering much more information. The answers you get are essentially useless. For instance, one restaurant offers fast food and another is a steak house. Obviously the fast food is cheaper but the steak tastes much better and the food is of much better quality. However based on asking for average entrée price you would never choose to eat at the steak house even if it offered a great value for the quality of the food it offered. Modular home prices can vary widely based on how it is structurally built, the type of flooring used, the quality of kitchen cabinets, etc.
Just how are square foot homebuilding costs determined? They are nothing more than the total cost of a home project divided by the total number of square feet in that home. So, an average 2,200 square foot home with total construction costs of $242,000 would cost $110 per square foot to build. Spend another $40,000 on an upgraded kitchen, a beautiful master bath, 10 foot ceilings, or any other combination of “high-end” features or finishes and the price jumps to $282,000 but the homes square footage stayed the same. Now that same 2,200 square foot home would cost $128 per square foot to build; an increase of 16 percent. Add in porches, decks, garages, bonus rooms, etc. and using price per square foot to compare modular home pricing is like comparing apples and oranges.
Get Real Modular Home Pricing Estimates
The first step towards comparing modular home pricing is to get an actual home estimate. A home estimate should include the building specifications used to create it, the modular home floor plan it was based on, and should also include an estimate for delivery and installation. Impresa Modular has created the Express Project EstimatorTM which provides pricing based on our modular home plans and provided specification. As a prospective customer, you have access to this tool to create modular home pricing for an unlimited number of modular home floor plans.
Not all modular home price estimates are created equal. When using them to compare between builders, be sure to understand exactly what the purpose is of an estimate and how it is created. For great builders, a home price estimate should regularly be within plus or minus 10% of the ultimate price actually paid for a home. For average builders, that difference can regularly be off by as much as 20% or more. Always be sure to look for the term “allowances” and understand exactly what it means and that it is a realistic number if included. For example, if you are digging a well on your property it is common to have an allowance because no one knows exactly how deep it will be. An allowance should be realistic for your area. However, if an average well in your area costs $8,000 and the builder has an allowance of $3,000, then that builder has an unrealistic price comparison advantage of $5,000. If you discover an excessive number of allowances in a pricing estimate, that should be a warning sign. Always validate that allowances are realistic or your estimate could be off by tens of thousands of dollars. What seemed like a “good deal” could be the most expensive home you can buy.
Comparing Modular Home Prices with Outdoor Construction
When comparing prices, it is important to make sure you know what is included. In many parts of the country there aren’t inspectors to insure a site built home is built to current building code. That builder that advertises that they have been in business for 30 years may still be using dated, and sometimes dangerous, building codes. With modular homes, you can be sure that your home is designed and built to meet state and local building codes at the home construction site. Modular sections are structurally sounds because they’re built to travel to the home site. They are constructed using standard materials and are very energy efficient.
One advantage of modular construction is that the process is much faster than with more conventional onsite home-building methods. Building the modules in the factory can take two weeks to three months; assembling them on the foundation can take several hours or several days. However, inspections and on-site work can add another 30-90 days to the construction process. Most custom homes are built using a construction loan. This means that you are paying interest costs on the outstanding balance of the loan throughout the entire construction process. The total cost of construction includes construction interest, which can sometimes accumulate for four or more months over an equivalent home using modular construction. This saving is not typically accounted for in modular home pricing.