Let's build a house!

The goal of this article is to help you if you should consider building a new home or extending a current home. There will be another article coming soon explaining where to start when you want to extend or build from scratch.

So……….you just realized that you need more space. You are dreaming of having a large home, in which everything has it’s spot, and where your kids will never make a mess! The Dining Room will only be used for Shabbos, and shoes will never make it past the mudroom. All this, together with hosting Sheva Brachos, Bar/Bat mitzvahs and community events. This house will be “the spot”!

Well, I am not sure how the above will work out, however, let’s talk about what type of house you should actually build. 

You live in a starter home and need more space. There are 2 choices, extend your current home or build from scratch. Let’s weigh out the 2 options and I will leave it to you to decide what will work best.

We will start with building an extension.

Extensions seem to be the way to go since, let’s say I have a 1600 sqft house and want to add another 1500 sqft, why knock it down if I already have 1600 sqft built already?. Wouldn’t I save half the money?

Most people who build an extension, don’t just build an extension. They actually renovate the current house as well. Being that no 2 homes and reno’s are the same, it’s hard to put an exact number on the cost to build. Builders are going to quote you a price and add in their contracts that this price is based on things costing “x” amount of money. If those things change, then your price changes as well. So, when you add in a. the renovation of your current house and b. the extra unknown cost, the actual cost of an extension cost much more than you can imagine. If I need to put a price tag on a renovation of a 1600 sqft house and a 1500 sqft addition, I would estimate it to be around $550,000. And of course, if your house or extension is larger, then the numbers change.

Now let’s talk about building a house from scratch.

There are some people that want to be very involved in the construction of their new home. They have very specific criteria, not just on the finishes, but on the entire layout and features. They have a dream that they plan on bringing to fruition. Then there are people that just want a brand new home, but they have no motivation to be busy designing and picking things out all day. And there are those in between people. 

Another thing we need to discuss is the benefit of a brand new home.

  1. Of course there is the benefit for those that have a very specific dream in mind.
  2. Let’s compare 2 scenarios. You make an extension on your current house and end up with a total of lets say 4000 sqft. Or, you build from scratch a 4000 sqft house. (or any size). When you make an extension you need to remember that your house was not originally laid out to be 4000 sqft. It was built to be let’s say a 2000 sqft house. The layout used 60 years ago may no longer be ideal for the 21st century. When building from scratch you are in control of everything, room sizes, entry ways, kitchen size etc. When building an extension, you may be limited on some of these things. Another thing is ceiling height. Today it is common to build homes with 9ft plus ceilings. It’s difficult to change ceiling sizes when making an extension. The truth is, all this is not true. You can do all the above when making an extension. But it raises the cost significantly so people usually don’t do them.
  3. Then there is obviously the fact that if you build from scratch everything is mechanically and structurally brand new.

There are 3 ways to build a house from scratch.

  1. A custom home
  2. A Spec Home
  3. A Semi Custom Home
  1. A custom home means, everything from scratch and how you like it as long as it fits the lot, city ordinances and………budget.
  2. A spec home. There are builders that have a few homes that they have designed and they will build it on your lot. They don’t allow much in regards to making changes to the layout. Your input is minimal. Like picking paint colors and light fixtures, to granite colors. But layout and house size is more or less set. You either like it or not.
  3. A semi custom home would be the same as a spec home. However, it would be with a builder that would customize the spec home to fit your needs. They may allow you to make layout and structural changes as long as it stays within certain parameters.

One of the biggest factors of the above is pricing. You can build a spec home on your lot these days for as low as $160 per sqft. A custom built home will be close to $250 per sqft after you make the usual upgrades most people make. It can be upto $300 per sqft if you have a high end taste. Obviously, if you are building a very high end luxury home it can cost a lot more per sqft. (Cost per sqft changes with the cost of labor and material, so these prices are as of the writing of this article)

Why the difference in price?

There can be many reasons. One reason can simply be that there is no reason! Another reason can be quality which is definitely part of the reason. But another part of the reason is the following. It’s a lot more work to build a custom home. Everything has to be figured out from scratch and the builders need to constantly stop and make changes because of your constant input. It’s not worth it for a builder to put so much effort into building a custom house for lets say $200 per sqft. Furthermore, because your home has not been built by this builder in the past, it can be hard to determine exact pricing. There needs to be more room for error. However, builders of spec homes have built this house many times over. They have it down to a science. They know the exact cost for everything and where to buy which material and for how much. They have workers in place who have built the same house. It’s very systematic….and easier. Because of this, it costs them less, and gets built much quicker. It can take 1-2 years to build a custom home and as little as 6 months for a spec home.

So should I build a new home or extend? I think the answer is as follows. If you are just adding onto your house and not changing much in the existing house, it’s forsure cheaper to make an extension. However, if you are making a full makeover plus an extension, first look into the cost of building from scratch. You never know the price. Even if it’s a drop more expensive, you will get a better layout, high ceilings and new everything. But it won’t shock me if it’s the same price. And if you want your dream house, there is only one way to get it. Build from scratch!

I hope this article helps. Feel free to reach out with any questions as I work with both custom home builders and spec home builders. If you want to make an extension I can refer you to builders. There is usually a builder that becomes most popular for extensions and it changes every few years.

I will be adding a page with a list of different builders!