Dennis and I began building energy efficient homes in the 1980’s. We understand construction math and profitability. It costs 5-10% more to build an energy efficient home than "standard" homes.
Many people pay deluxe home prices for fancy looking features but they get only paltry energy saving benefits.
When we first started building energy efficient homes in the 1980’s builders were pleased if they had $10,000 left to share with investors per home after completion, bills paid, and the home sold. Twenty years later builders aim for $100,000.
At this point, you should be wondering how much money was actually spent on the construction of your home?
The following is a list of major line items in the cost of construction of a home.
• Acquisition cost of the land, including fees
• Legal fees for township/municipality approvals
• Engineers fees
• Architects fees
• Building permit fees
• Site improvements, i.e. sewer or septic systems, and water
• Insurances, builder’s liability and worker’s compensation
• Home construction
• Financing fees
• Investor’s return on investment (ROI)
• Real Estate agency fees
• Builders’ soft costs
• Builders’ profit
The actual construction cost of a home is a small percentage of the entire development process. Home construction quality is often times sacrificed to pay one or more of the other line items.
The homebuyer pays the price three times. Once in the purchase price of the home, the second time for increased operating costs, and the third to repair the cost cutting measures.
This is an amazing post!
Homes are getting more expensive because "everything else" is more costly.
Self-renovation projects on existing homes become that much more interesting.
Posted by: Claude Gelinas | June 26, 2008 at 10:53 PM