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  • Writer's pictureCedar Creek Custom Homes

Cost Per Square Foot - A Tricky Game

Updated: Jul 19, 2023

We get the question all the time.

What is the cost per square foot to build a new home?

The truth is that this is a potentially dangerous question to ask and an even more risky question to rely on when you are determining a budget to build your dream home. Why?

1. Because there are endless factors that play into the cost of a home that cannot be summed up in one general number.

2. Contractors may not use the same math to calculate the cost per square foot breakdown. So you most certainly will not be comparing apples to apples. (continued below)

Custom Home Builder in Priest River Idaho

Not all cost per square foot numbers are created equal

Let's look at a basic example that can happen quite easily.


  • 1,500 square foot bungalow with finished basement for a total of 3,000 square feet of developed space

  • attached 600 square foot gargage

  • needs a $20,000 septic system

  • requires $10,000 of demolition and site work for outbuildings already on the property

  • will require a $7,500 retaining wall to accommodate parking space

  • $500,000 actual cost to build the home and garage itself for a total of $537,000 total cost for the entire project



The first builder that you contact gives you great news. He says his cost per square foot starts at $185 per square foot. You take that information and do the math yourself. $185 x 1,500 square feet above ground floor space = $277,500. YIKES. You've gotten all excited just to be disappointed later on when you find out you should have clarified whether or not you should have included the total developed space or just the main floor living space.


The second builder tells you to use $150 per square foot of total developed living space when you're doing the math, but he doesn't realize that you actually want some fairly high end features included and he doesn't typically include septic systems or other site works in his calculations, so you're left assuming that the total cost will be $450,000, when its actually $537,000.


The third builder is really up front and tell you that you should probably budget $185 per square foot because they are used to building higher end homes and they include room for all the extras that might come up including taxes, dirt work, demolition, and septic. That gives you a grand total of $555,000. But, because its so much higher than the other two scenarios, you don't bother contacting them again.

You can see how convoluted this process and question can be. It is often misleading, and a question we don't like to answer because of how tricky it can be for clients to really understand all the factors that can affect it.


Find a builder or builders who will take the time to really understand your goals and project. Give them as many details about your new home plans as possible. Get them to give you a total number and a list of things it will include rather than asking for an off-the-cuff cost per square foot to build.

Give the builder time to put together a number. We run preliminary client specifications through a detailed computer based software program for our initial estimates. This takes a couple of days, but you'll get a number that's actually workable.

Once our clients are ready to proceed with an actionable estimate for contract purposes, we delve even deeper. This is where you'll make actual selections involving all the nuts and bolts as well as all the finishing touches, so that your budget is as tailored as possible for your new home. The more time you take in this part of the process, the more accurate your budget will be. Getting it right the first time takes time and effort on your part as well the builder. In the end, it will be well worth it.

Happy budgeting!


Survival Specialist

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