Dear Future Homeowner,
The first thing on everyone’s mind when thinking about building a new home is obvious: how much will it cost?
The truth is, there’s so many factors that are taken into consideration before arriving at the final cost of the home that it is nearly impossible to give a prospective homeowner a concise and accurate answer early on in the process. This can lead to understandable confusion and frustration.
That’s why in this letter I want to explain as best as I can, from me to you, what truly goes into the price of a Barden home, and debunk some common home building pricing myths that I’ve seen floating around in home building conversation.
I want to get some hard truths out of the way to start. From my experience, here are some aspects of the industry I want to shine some light on:
1) The Industry Minimum
Commonly, the absolute bottom of the market for a small, good quality, no frills new home is around $170,000 excluding an approved and prepared building lot . And I really mean no frills. Any less than this, and the concern regarding corners being cut and subpar materials being used begins to arise.
2) Land and Site Prep
Land is hard to find, and expensive to prep for building. In reality, you should be budgeting for the lot itself as well as lot improvement costs before you even begin building. This includes site work needed to prep for the house itself (leveling and grading) and utility work needed (water and gas lines) to make the site livable.
Like finding an existing home on the market, this step requires patience and the understanding that it’s probably going to cost more than you hoped for to get the one you want. Like a realtor, our dealers are experienced at finding unlisted lots and helping to weed through the ones that aren’t the best fit for you. Unlike a realtor or another builder, our independent dealers have the expertise to evaluate a lot that you're interested in to help you make the best decision possible. Reach out and let us help.
3) Your Actual Budget
After fielding thousands of questions and having countless conversations with prospective buyers I've found that the vast majority don't have a realistic idea of their budget. Most have shopped the existing market and have an idea of what used homes cost. Others just have a number in their head that sounds affordable and appropriate to them. The reality is that until you speak with a new construction lending specialist, you really have no way of knowing what you have to spend in terms of a monthly payment and how that relates to the big number. Many times the prospective buyer finds out that they have more money to work with than they realize.
4) Cost Per Square Foot
There is no universal cost per square foot figure that any builder can quote unless they are building the same home, in nearly the same location, with the same lot conditions, with the same materials at the same price, with the same crews.
The number of variables when building on your lot are immense: shipping costs, ever changing material costs, major variance in building codes (even in neighboring municipalities), taxes, labor demand, lot conditions, home design and the specific expertise and equipment needed to build, distance the home is built from the road... the list is nearly endless. Providing a quote without understanding all of these variables would be dishonest and irresponsible. Barden specializes in controlling many of these variables, but there are still too many to account for to give an honest estimate up front.
Instead of providing a price range or cost per square foot, I’d like to ask you to approach the situation from a different angle -- one I think clarifies and improves the home building experience. Let me lay out a scenario for you:
Expected Approach for Pricing:
I’m using the “Redgrave” floor plan as an example.
“How much is this plan with the bonus room as another bedroom with a bathroom?”
This is the natural first question I get from homeowners, and it’s not surprising -- it’s how every other product in our world works, and I don’t fault anyone for thinking this way initially. The only honest way I can answer is to provide a price range. The price range I’m used to giving is $130-$180 per square foot. For this home, the range is $280,000 - $390,000.
That range is less-than-helpful for a prospective homeowner. Moreover, it fails to account for their family’s needs and what they are hoping to see in their dream home.
The truth is, a home cannot be and should not be shopped in the same way as say...a fence: How much is it per foot? There’s a better way to arrive at pricing that fits the homeowners wishes.
The Barden Approach to Pricing:
Rather than approaching it with the question of “How much is this floor plan?” -- We see much more success with homeowners who ask the following:
“I have a lot and a budget of $280,000. I’m married, have 2 kids under 6 and we are considering another baby. I cook 5 nights a week, and love the sound of a busy house. I host every holiday and love it, I can’t imagine not hosting. My parents visit once or twice a year and need a guest bedroom. I'm not currently working, but would like an office so I can work from home in the future. What kind of home can I build?”
This is how I would answer this inquiry, from the same hypothetical person, presented differently:
“$280,000 is a tight budget for all of the things you need, but I think we can draw something for you that will work. Let’s do a 4 bed, 2.5 bath plan in the 1800 sq ft range. We can put multiple vanities in the kids’ bathroom to manage morning traffic without adding another bath. The 4th bedroom is a guest room for now, but can be a nursery in the future. You might have a small inconvenience once a year when your parents come, but we may need to consider what the costs would be of an extra bedroom.
We can also focus on giving you a big open kitchen and living space for the busy house feel and to accommodate your regular cooking. We’ll skip a formal dining room to save on cost. The big open living area can be reconfigured for your holiday gatherings to fit extra tables and chairs.
In case you need extra room, we’ll be thoughtful when we place any support posts in the basement so you can finish it and add an office or a playroom if you need it down the line.
I think the money is tight, but we can work on a plan to make it all fit. Let’s get you in touch with one of our dealers and get to work!”
The Barden Difference:
The first time, our hypothetical inquirer chose a plan that looked appealing that had all the bells and whistles of a home they hoped they could afford. The response I gave was the best I could give, but most likely would result in the inquirer feeling frustrated and shopping builders until one presents a number that fits what they had hoped for.
The second time, with a more open approach, we would be able to design a new home that checks all the necessary boxes. No, it probably won't check every single box the inquirer dreams of having, but this is the nature of a true custom home. Balancing wants and needs with real time feedback on budget all influencing the design of the home is what we do.
With a reasonable goal and budget, this person would be able to build a beautiful home for their kids to grow up in that will last the happy family a lifetime.
This is the most honest and transparent way I can answer your pricing questions.
This industry is full of all sorts of people willing to sell you the house you want, and far too few that will convince you to build the home you need. I truly hope that this helps you on your home building journey and that you choose to let Barden help design and build a special home, and not just provide you with a place to live that you'll grow out of.
If this letter sparked any further pricing questions, please reach out. My favorite kind of customer is an educated customer. I’m always happy to answer any questions honestly, and as unbiased as I can.
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