Dirty Secrets about Custom House Construction

Dirty Secrets about Custom House Construction is about, well, things that no one in the business wants to talk about: not Contractors, Architects or anyone else.

But this particular company tells the truth: HOME ARCHITECTS. Good, bad or ugly. Even if what they design is downright beautiful. They win design awards: 4 last year, 1 the year before and are working on another 5 award-winning projects for next year.

So what’s the big deal? What are the secrets that no one wants to talk about? Do such secrets even exist? They do. Instead of building up to the #1 largest secret in the business, here it is straight away:

The number one, biggest secret of the custom house construction business is:

That the dream house of anyone and everyone will ALWAYS end up costing more than the homeowners ever imagined.

In many or most cases, A LOT more.

So why does this happen? This leads to another secret within a secret: no one in the business wants to have to explain this next factor, which is WHY peoples’ dream houses end up costing so much more: as in WHO is to blame for this happening:

The Builder? Not usually.
The Architect? Probably not.
Well, what’s left? How about: THE OWNER.

Oh no! No one want’s to tell the Owner that! And due to basic human psychology and the tendency to blame others for our unfortunate situations, the Owner would never dream that they are at fault. Hey: this is their project! They TOLD the Architect and the Builder what they wanted to spend:

Usually the amazing sum of $100/SF (Square Foot). And that’s the start of the problem. How’s that? Can’t the Owner dictate the budget amount, demand everything they want, then have the cost be that? Unfortunately NO!

That’s not the way it works. Why? Because misinformation and a loud voice does not remake reality. And because nice houses with wood floors, upgraded roofs, complex shapes (like multiple gable roofs), multiple garages, nice appliances, large bathrooms, multiple porches, upgraded paving materials, outdoor stairs, multiple fireplaces, higher-end finishes and the like will NEVER be coming in anywhere near $100/sf. Even tract housing hasn’t been built in that price range since about 1980.

There’s some really bad misinformation out there on the Internet about construction costs (as in lowball). And when people find it, they apply that bad information to their dream castle, as if they are selecting another color of paint on a wall. You simply can’t build a $300/sf house for a third of that these days. Sorry. That’s the truth. That’s the main dirty secret that no one wants to tell you. So is the Contractor or Architect responsible for planting the $100/sf idea in the Owner’s mind? Highly doubtful. More like wishful thinking on the part of the Owner. THAT is why most Owners become outraged and surprised when they finally receive a price quote from a Contractor. The disconnect between the Owner’s misinformed wishful thinking and the realities of construction costs required to be spent to obtain all of the features and sizes and materials the Owner wants in their dream house is the reason.

The reality? Read on (below):

To obtain a reasonably nice middle of the road sort of house, you’re probably going to need over $200/hsf (Heated Square Foot). And you better be careful if you think that allows you to go big with other peripherals, like 3 car garages, giant timber frame porches front and rear, firepits and other goodies. The HSF price will only go so far and you can break that budget quite easily when you overdo the exterior square feet. And end up being more than $300/HSF. Owners need to be careful and ask their Architect for guidance regarding size, features and materials, but NOT blame the Architect. Why: because the Architect is not the one who said they needed a 6 bedroom, 7 bathroom house with a 4 car garage and Olympic swimming pool. That requirement came from the Owner. So be careful what you ask for. To get it, you’re going to have to pay the Builder what it costs, plus a profit for his/her efforts.

Another dirty secret: BASEMENTS ARE NOT FREE. For some curious reason, unknown to this firm, people have the delusion that basements are free, or nearly so. They are NOT. As a matter of fact, some Contractors have a term for this: they call this their “Basement Profit Center.” And what they mean by that will horrify you. Do you want to know?

Okay: you asked for it: They mean that they KNOW that the homeowners have asked for an unfinished basement because the homeowner BELIEVES that for just a few extra bucks (as in: next to nothing), they will be able to bully or otherwise coerce their Contractor to add the insulation, drywall, electrical, plumbing, windows, doors, HVAC, paint, trim, stairs and other items to convert that basement into completely finished space by the end of the main house construction. Here’s part of this dirty secret: CONTRACTORS ARE JUST WAITING FOR THIS! (to find out more, read on, below):

They KNOW what you intend. How? Because they have likely built dozens or even hundreds of houses since they’ve been in business. Maybe even they were hoodwinked into this the first time. The first time. They have vowed never to allow that to happen ever again. Why? Because they have a family and employees to feed and pay, and they aren’t in business to give you free things. So now, they are going to make a profit on that. A very good profit. So if you’re thinking that you’re going to get your Builder to give you a finished basement for next to nothing, think again. And even the unfinished basement is going to have a pricetag. Does that mean that contractors are bad, evil and mean? Of course not. It means that they are business people who have to earn a buck, just like everyone else, including you. They are not Santa Claus. And if you also think that excavating deep into the ground with big, heavy equipment and building a steel reinforced cast in place concrete wall 12′ under the ground along with larger footings, drainage fabrics and piping, and wall waterproofing costs less than a normal stud wall above the ground, you’re going to discover otherwise.

And that’s probably enough of popping balloons for now. Perhaps more in the future.

But what now? How to avoid these dire circumstances detailed above? That’s surprisingly easy: Ask your Architect. He/she will NOT and should not attempt to estimate your construction cost, as that road is fraught with liability, because actual costs are always sure to be more expensive. However, your Architect can tell you when they believe that your expectations are not aligned with construction cost reality. And some Architects (such as the sponsor of this website) knows how to arrange its bid forms and construction documents in such a way so as to give their Clients a fighting chance to help control their costs through such techniques as their own unique: “Owner Optional Bid Items” list. Contact the firm to learn more about this and how they can help you on your next house.