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Home Construction Cost Per Square Foot

The home construction cost per square foot is the amount of money per square foot of house space it costs a contractor to build a home, with a percentage added on for profit. It is one of the basic methods used to break down the overall cost of a home. The process in determining the home construction cost per square foot is simple: if a house is 2000 square feet and costs $200,000, the cost per square foot is $100.

Determining the home construction cost per square foot is normally handled by an estimator or accountant assigned by a general contractor to a specific project. No two estimates are the same, as requirements differ from one project to another. Home construction estimator software can help guide the estimator or accountant down the right track.

During the traditional bid process, the home construction cost per square foot covers the amount it would cost a general contractor to build a project, pay its employees and make a small percentage of profit. The estimate covers the cost of items like concrete for the foundation, cables for electrical wiring, flooring, plumbing, carpentry and HVAC (heating, ventilation and air conditioning). In this case, the home construction cost per square foot does not cover the complete cost of the design, as it is normally a generic one.

In the design-build process, determining the home construction cost per square foot is more involved. In this process, an architect and general contractor combine as a team and present a building or project design and construction contractor services in one proposal. The design-build process is used by those who believe an architect-contactor team with a past history of working together would be more efficient and, as a result, cheaper than an architect and contractor working together for the first time--but the cost will also include fees for the architect's design.

The home construction cost per square foot used as part of a construction manager at-risk (CM at-risk) project falls in between the two. The architect is hired separately from the general contractor, but the contractor is involved in the project from the pre-construction process all the way through completion. The estimate comes in the form of a guaranteed maximum price, which covers all services rendered from pre-construction through the building process.

Home construction estimator software has largely replaced human estimation, as they are able to complete the process more quickly and efficiently than a human accountant operating alone. There are a number of programs that can break down cost estimates into subsections, as well as delivering the overall total price.

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