How much does it cost to build a home with a custom home builder in Northern Virginia?

“How much does it cost to build a home with a custom home builder in Northern Virginia?” is by far one of the most common questions I hear from prospective land buyers.

As I’ve noted elsewhere, land and rural property sales in Northern Virginia have accelerated since the outbreak of COVID-19. Based on conversations I’ve had with buyers, the demand seems to be driven by (1) a low supply of existing homes that meet buyer needs and (2) a desire to escape the perceived health risks of living in densely populated areas.

Whatever the reason, buying land is just the first step for many of my clients. Ultimately, their goal is to build a custom home on the property, which inevitably leads to the question, “how much should I pay to build a home with a custom home builder in Northern Virginia?”

A lot of builders balk at answering the question, at least at outset. This is understandable. As explained below, the cost to build a home with a Northern Virginia custom home builder can vary enormously based on numerous factors.   

However, as frustrated as builders get when they’re pressed to answer the question, prospective buyers get equally frustrated when builders can’t or won’t provide a quick back of the envelope estimate. I get it—builders build homes all day long, so you’d think they could look at past projects and figure out an average cost per square foot.

I empathize with both parties on this issue. On the one hand, I can see why builders would be hesitant to throw out an estimate when they aren’t familiar with the home site or the buyer’s specific goals and vision for the project. And, if you force the issue, the builder is likely to either tell you what you want to hear or err on the side of caution (i.e. give you a more expensive quote) to allow for a margin of error.

It’s a lose-lose proposition for the builder. If he tells you what you want to hear, then you’re going to be upset when he goes over budget. If he inflates the quote out of an abundance of caution, then he risks losing your business if you think he’s trying to gouge you.  

On the other hand, buyers need to have some notion of what it will cost to build their home, and it would be useful to have this information before they start shopping for land.

How much should I expect to pay for a custom home builder in Northern Virginia?

In an effort to bridge this gap, I thought I would share some of what I have learned from helping clients through the due diligence process and talking to builders of all stripes – from budget-friendly modular home builders to top-of-the line design-build firms.

As mentioned above, the cost to work with a custom home builder in Northern Virginia can be highly variable.

At the low end, you might pay $110/SF for a very basic home with minimum customization and entry level finishes, not including the cost of land and site development. Frankly, it would be a stretch to call this a custom home, because you would likely be limited to the builder’s pre-existing plans and you would have little to no budget left over for upgrades or architectural design changes.

With a budget of $110/SF, your final product might feature laminate countertops, maple cabinets, carpet and vinyl flooring, and fiberglass shower stalls. If you wanted to add basic upgrades that most of today’s homebuyers have come to expect in a new home – granite counter tops, vinyl plank flooring, tile showers, etc. – you might end up closer to $130-140/SF.

At the other end of the spectrum, you could pay more than $350/SF for a truly luxury design/build experience. With this kind of budget, you could start from scratch with an architect and build a jaw-dropping home with extravagant European or ultra-modern architectural styling and designer finishes. If twin staircases, turrets, a slate roof, mosaic floor tiles, a spice kitchen, commercial grade appliances, a wine cellar, and a long winding driveway with a grand entrance are on your must-have list, then you may end up in the $350/SF price range.

For those looking for a happy medium, it is possible to build a home with a custom home builder in Northern Virginia for $225-$275/SF. At this price point, you could build a high quality custom home with more modest architectural styling – think Cape Cod, Craftsman, or Colonial architectural styles, to name a few – and sophisticated finishes that don’t break the bank.

To be clear, these are just rough estimates. Ultimately, the cost of your project will vary depending on numerous factors that may or may not be within the builder’s control. This is why a custom home builder in Northern Virginia may not be willing or able to provide an accurate per square foot construction cost estimate until much later in the design/build process.

Lumber prices

For instance, average lumber prices increased 80 percent during the four month period from April to August this year. This month, the National Association of Home Builders reported that the spike in lumber prices “has caused the price of an average new single-family home to increase by $16,148 since April 17.” Therefore, if you got an estimate from a builder back in April but didn’t start your project until today, there’s a good chance the builder’s estimate will no longer be accurate.

To share a personal example, in April 2019 I requested a price quote for a 2200 SF home from a modular home manufacturer. I received an updated quote for the same home in October 2020, and the price had increased 35 percent. Much of this was driven by the increase in lumber prices.

Sewer vs. septic

The physical characteristics of your building site can also have a major impact on construction costs. Unless you have a specific site in mind, it is extremely difficult for a builder to provide accurate estimates for the site work that will be required for your project.

One factor to consider is whether you can connect to public sewer. Often, connecting to public sewer is more affordable than installing a septic system, but there are still fees to take into consideration. Fairfax County, for example, charges an “availability” fee at the rate of $8,340 for a single family home, a “connection” fee at the rate of $152.50 per linear foot of road frontage (capped at 100 feet), and a $600 “spur” fee.

In a worst case scenario, therefore, the cost of connecting to sewer in Fairfax County (not including physical labor and construction costs) can top $24,000. Sometimes, however, you may find that some of the fees have already been paid by the previous property owner. In such circumstances, it may be possible to connect to the sewer for under $10,000.

If a public sewer connection is not available, then you will have to determine the feasibility of installing a septic system. The seller may have already performed a soil evaluation and obtained a septic certification letter, in which case you can proceed with confidence that the county will approve the construction of a septic system on the property.

If the seller has not already obtained a septic certification letter, then you will have to hire an Authorized On-site Soil Evaluator (AOSE) to evaluate the soils and submit a septic certification or permit package to the county. Part of this process may involve additional expenditures for survey work. Depending on the size of the property to be surveyed, the heavy equipment requirements of the job, and the complexity of the septic system design, the cost could exceed $10,000. Often, however, the work can be completed for around $5,000.

Of course, once you have obtained approval for your septic system, you still have to pay for the system to be installed. A straightforward conventional system might cost $10,000 to $15,000, while a complicated alternative design system could exceed $35,000.  

Excavation and foundation

Another variable that affects the cost of building a home with a custom home builder in Northern Virginia is excavation and foundation work. If you envision a home with a basement, then the excavation and foundation costs will be considerably higher. If you’re content with just having a crawl space or a concrete slab, then you may save some money. Note, however, if you eliminate the basement, you also eliminate the possibility of putting your mechanical equipment in the basement. You will have to account for this in your floorplan.

To give you an idea of how excavation costs can affect your bottom line, consider the following example. Recently I was considering a site for a home with a 1,400 square foot footprint and an attached garage. The quote for the excavation and foundation work ranged from roughly $20,000 for a home with a crawl space to $40,000 for a home with a basement.

Keep in mind, this quote was for a relatively flat, cleared site. If you start with a heavily wooded site with challenging topography, then the cost of site work could increase substantially.

Building up vs. building out

Whether you decide to build up or out can also have a considerable impact on construction costs. As one builder recently explained to me, as the building footprint increases, so do excavation, concrete, and roofing costs (a larger floorplan requires a larger roof). Therefore, it can be more affordable to build up instead of out.

In conclusion…

Hopefully this post has shed some light on why it is so difficult for a custom home builder in Northern Virginia to provide a quick and accurate estimate of what it will cost to build your home.

Perhaps the best advice I can offer is to concentrate on finding a builder you trust, who is transparent with his fee structure, and who can help you make sensible and informed cost-benefit decisions at each stage in the process.

If you have additional questions about buying land and building a custom home in Northern Virginia, please contact me anytime at kennedy@kennedysellsva.com or 202-750-4050. Trusted builder referrals are available upon request.