New Home Cost: Cheaper than Expected?

by Michele Weaver | Oct 20, 2020 | Great Design

“When the price is higher, people tend to focus on the things that make it higher. When the price is lower people tend to focus on things explaining why it’s lower,” William Poundstone wrote in his book, Priceless. Which do you want? Prospective buyers touring your homes to figure out why your prices are cheaper, or having them appreciate what makes your homes more expensive?

In most markets, national/production builders can offer what appears to be the “best prices.” Rightfully so, as they may enjoy economies of scale that can provide certain cost advantages in terms of land, building products, and even labor. The model homes are attractively presented, consumers notice the Delta faucets and Whirlpool appliances, and the sales representatives show how easy it would be to own one of their homes. (Photo courtesy: Delta Faucet)

Some of these builders deliver an outstanding value, but oftentimes, in checking online reviews and apps such as Next Door, the builder’s reputation, quality, and customer service may be suspect. Buyers reason that is how the builder can price their homes cheaper. Aware of this, some buyers will accept those risks and buy on price; others rule out that builder, fearing the potential disappointment and regret.

If you’re not the lowest price builder in your market, your challenge is to help possible buyers identify what makes your homes more expensive. Those factors, if they matter to the buyer, will help them justify choosing you, so you may also need to help those folks appreciate why you build that way and/or include those amenities. Remember, buyers buy on emotion and subsequently justify those decisions rationally. Wanting to buy a home based on factors other than the lowest price is emotional.

Some of the factors might be obvious – the Craftsman touches add to their home’s curb appeal. They fall in love with the look, can’t wait for their friends to see it, and value aesthetics. Other factors might require demonstration – the glass block windows (photo courtesy: Hy-Lite®) in the suite’s bathroom that provide both light AND privacy, plus crank out for fresh air, too! Factors might even be hidden – like the high performance insulation that will make their home more comfortable to live in, and is estimated to save them $XX monthly in utilities, giving them “bragging rights” as well as appealing to their desire to be environmentally responsible.

So, how do you make sure new home shoppers become aware the many reasons your home is a better value, even when it is more expensive? Besides the obvious model home tour, focus on rapport and trust. Rapport is a two-way street. The buyers want to know more about you, your company, and the homes you build. On the flip side, they’ll appreciate talking with someone who listens, cares, and truly has their interests at heart. Trust takes a little longer, though most people initially believe people they meet are trustworthy until they have reason to doubt. Knowledge of home building and your models is an important component of establishing trust. So is discovering things you have in common with the hopeful buyers (e.g., affiliations, schooling, interests, hobbies, preferences, etc.) – such similarities can go a long way with both rapport and trust. People like to do business with others like themselves. Transparency also aids in building trust, especially when it comes to pricing. Think pre-priced options and upgrades. Intriguing signage in your model home that calls attention to a specific feature that might be overlooked or under-appreciated can aid your buyer’s learning about amenities they would really want, but may not have even been aware of, further establishing trust.

As a business thought-leader and author, Seth Godin points out, price is a story, “People form assumptions and associations based on your pricing.”

Hyundai’s pricing strategy is very different from that of Mercedes Benz, and they sold a million and a half more vehicles world-wide last year than Mercedes. Yes, people form assumptions about Hyundai and Mercedes vehicles based in part on their pricing. But Mercedes sales pros probably aren’t losing any sleep over Hyundai prices!

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Healthier Home = Healthier Household

by Michele Weaver | Oct 19, 2020 | HER Home

How your choices affect the cost of your new home.

With all four children plus mom suffering from asthma and allergies, Paul and Cindy opted to invest $3,000 in a high-performance air filter and air purification system when building their new home. They feel it was the best choice they made, particularly when it cut their family’s dependence on maintenance and rescue medications in half! We rarely appreciate feeling good and take our health for granted. Learning about some of the healthy choices to consider is the first step to making the best new home investment decision.

Indoor Air Quality is becoming an increasingly important aspect of new homes. Today’s tighter homes can potentially trap airborne pollutants, from annoying odors to molds, pollen, and bacteria. An estimated half of illnesses are directly related to or aggravated by the air we breathe. These same pollutants can trigger adverse reactions in the 40% of U.S. households having one or more members suffering from asthma, allergies, or another respiratory ailment. Some of today’s building materials and furnishings can release chemicals bothersome to sensitive individuals, or harbor indoor air pollutants. Wise product choices can greatly reduce indoor air quality problems.

Eliminate Sources of Air Pollution. The first step is to improving air quality is to eliminate sources of possible indoor air pollution, removing paints, cleaning chemicals, gasoline, pesticides, etc., from inside the home. If they will be kept in an attached garage, you will want to ensure the garage is air-sealed from the walls/ceiling of adjoining living spaces in the home.

Bed Covers. Bedding can be a significant source of allergens. Dust mite allergy is the most common allergy, and there are two million dust mites in the average double bed! Many doctors recommend a mite-proof box spring and mattress and pillow encasings.

Radon. According to the U.S. EPA, radon, a naturally occurring, invisible, odorless gas causes an estimated 21,000 lung cancer deaths each year. It is a radioactive gas that is produced from the breakdown of uranium in the ground and leaks into the home through the foundation. The EPA has developed a nationwide, county-by-county map indicating potential radon levels broken into levels 1 (most serious), 2, and 3. (See map at right.) Adding radon-resistant construction features typically add $350 to $1,000 to the cost of building a new home (Source: EPA).

(Click on image to enlarge.)

Air Filtration. Filtering the air you breathe is the second step for improving indoor air quality. Air filter effectiveness is expressed by its MERV (Minimum Efficiency Reporting Value) Rating, which describes the filtering effectiveness of increasingly smaller particles. MERV ratings range from 1 to 20, with higher numbers doing a better job of filtering more (and smaller) particulates in the air. Traditional furnace air filters are designed to protect the furnace—not people. Typical ‘disposable’ one-inch fiberglass filters have a MERV rating of between 1 and 4. One- to two-inch pleated filters with MERV ratings between 7 and 12 will remove most harmful contaminants (e.g., mold, dust). Yes, you won’t have to dust as often! Larger pleated filters with MERV ratings of 13 and higher can capture bacteria, smoke, and some viruses. But higher MERV ratings are not always good. Because they are so effective at filtration, they actually restrict airflow, causing furnaces and air conditioners to have to work harder and operate for longer periods of time to achieve comfortable temperatures. Filters with MERV 13+ ratings should be used only when the HVAC system has been designed for such high filtration.

Air Purification. Air purifiers, the third step in improving air quality, destroy bio-aerosols. Most models employ ultraviolet (UV) light(s) around which air passes prior to being circulated through the ductwork. Bio-aerosols, mold, viruses, and other live organisms in the air exposed to UV light for a long enough period of time are destroyed. Installations wherein the UV light is adjacent to the air filter may work best, where the UV light can kill living organisms trapped in the filter.

MicroPure®: MX4™ Ionic Oxidation utilizes propriety metallic technology and UV light energy to naturally produce ionic air scrubbers and destroy many indoor pollutants, such as bacteria, viruses, mold, VOC’s, mildew, allergens, and odors.

(Photo courtesy of Dust Free)

Wise Product Choices can help minimize potential problems.

Enamel-coated wire closet shelving is highly preferable to particleboard shelving. Particleboard can off-gas chemicals and block air currents moving in the closet. With wire shelving, there is no outgassing and air moves between clothes hanging in the closet, helping them stay fresher, longer.

Factory prefinished wood floors give off little or no VOCs—a problem that can continue for up to 6 months after finishing traditional wood floors on site.
Low-VOC or no-VOC paints and adhesives.
Use a mildew-resistant paint in the basement.
(Photos courtesy of Sherwin-Williams; click on the image to enlarge.)
Frameless shower doors are not only elegant, but easier to clean and keep clean because they eliminate the frame and its glass seal where contaminates can breed.

Energy-efficient sealed, outside air combustion natural gas fireplaces, furnaces, and water heaters utilize a special vent pipe to bring outside air into the combustion chamber to feed the fire, and all products of combustion are exhausted out of the house instead of potentially spilling (‘backdrafting’) into the home. An illustration may be helpful. Let’s assume you build a fairly tight home. With the clothes dryer, bathroom exhaust fans, or kitchen range hoods running, you are likely exhausting more air from the home than can naturally leak in, causing the home to depressurize. Traditionally vented gas appliances cannot vent the products of combustion outside if the home is depressurized.

Touchless faucets and toilets help minimize the spread of germs. (Photos courtesy of American Standard and Delta Faucet; click on image to enlarge.)
A seamless integral sink formed of the same material as the countertop eliminates the seam or rim, which is an area that’s often hard to clean and where mold and bacteria can grow.

Fresh Air Exchangers. A fresh air exchanger expels potentially stale, polluted indoor air and brings in fresh outdoor air at a controlled rate. Some models incorporate a high-performance air filter, filtering out any contaminants and allergens in the outside air before it is circulated through your home.

Lighting. Most of us underestimate the importance of natural light. Windows not only connect us to the world around us, they are very important for health. The number of windows, their sizes and placement, open design concepts, transom windows between living spaces with walls, and even lighter interior colors all increase light levels in the home, known to reduce eyestrain, headaches, and fatigue. According to lighting pioneer Dr. John Ott, the UV rays in natural light actually help our bodies absorb calcium and reduce cholesterol.

Water Purification. “Although the U.S. has one of the safest drinking water systems in the world, there are an estimated 4-32 million cases of acute gastrointestinal illness (AGI) per year from public drinking water systems,” according to the Centers for Disease Control (CDC). When looking to purchase water filters, look for those that have been certified by the National Science Foundation, an independent federal agency.

Most people rely on the water filtration that comes with their refrigerators. Such filters are typically rated for about 300 gallons, or six months of use, and will set you back $80 to $100 per year for replacement filters. Water filtration systems that attach to the end of your kitchen faucet run around $30 but are typically rated for only 100 gallons before the (approximately $10) filters need to be replaced. For larger households and/or filtered water for cooking, consider under sink water filtration systems that can provide 50 to 100 gallons of filtered water per day for $200 to $300 and expect to spend another $50 or so per year in replacement filters. Whole house systems provide filtered water for all of your needs – drinking, cooking, bathing, and laundry. Often rated 5 to 10 years and from 500,000 to 1,000,000 gallons, such systems are priced between $800 and $1,500, plus you’ll want it installed by a plumber.

Quiet. Due to their superior insulation and air sealing, much of the unwanted clatter that goes on outside cannot be heard inside energy-efficient homes. Few things in life are as important to our health as a good night’s sleep. Having a home free from outside noise not only betters our chances for rest, but the quiet promotes concentration, reduces irritability, and has been shown to have a positive impact on our mental health. Inside our homes, quiet appliances, bath fans, and furnaces reduce ambient noise. Solid core doors, and various soundproofing measures can be taken during construction to minimize noise transfer from one area to another.

Healthy home product choices typically aren’t as exciting as kitchen and bathroom selections, yet nothing is more important than the health of everyone in our households. As a nation, we spend the majority of our time indoors, so building a healthy home just makes sense. Next time we look at choices for building stronger/safer homes – yet another definition of a high-performance home.

For more resources on thoughtful design and products:

View other articles on our blog
Browse our Her Home™ Magazine
Thoughtful Design Concepts

(Product spotlights are for informational purposes only.)

Cover image courtesy of VELUX.

Green and Energy-Efficient Homes

by Michele Weaver | Oct 12, 2020 | HER Home

How your choices affect the cost of your new home.

“People don’t buy a new home because of the energy efficiency, though they’ll brag about that later,” according to home builder Hugh Fisher in Warwick, Rhode Island, referring to his net zero-energy ready homes at Wynfield Place. Bragging rights extend beyond tiny utility bills of the homes at Wynfield Place to the related benefits of improved comfort (no drafts, quieter); and a healthier home with improved indoor air quality, due in part to the tighter construction and also because there are no byproducts from fossil fuels (natural gas or heating oil) being burned.

Achieving a super energy-efficient home essentially boils down to three elements: energy-efficient construction; energy-saving products; and to get all the way to net zero-energy, a system such as solar, which can generate as much power as the home needs. Previously, we addressed energy-efficient construction, such as SIP and ICF building systems, high-performance air sealing and insultation, windows, etc. Now let’s look at products you choose for your home.

Heating and cooling your home can account for over 46% of your utility bills as reported on the directenergy.com website. Natural gas is the most common fuel, followed by electric heat, which is considerably more expensive to operate. Compared with a standard 80% efficient gas furnace, a 90% efficient furnace may save you around $100 per year for a 2,000 sq. ft. home, and a 95% efficient furnace might save $150 per year. But your home’s energy-efficient construction, your climate, size of home, and personal preferences play a large role in the amount of energy you will use. If a 95% efficient furnace is $1,000 higher than the 80% efficient furnace, that $150 annual savings becomes about a 7-year payback based on utility savings. Still, the more energy-efficient furnaces are typically higher quality and expected to last longer, so delaying replacement expenses helps offset the higher purchase price. And with the very efficient furnace, your home might be favored when it comes time to resell.

Water heating is often the second largest consumption of energy in the home.

Annual operating costs for a 50-gallon standard natural gas water heater averages $309 per year, with comparable electric water heater averaging $626 per year to run, according to the U.S. Department of Energy. While standard “tank-type” water heaters keep their tanks full of hot water 24/7, tankless water heaters heat the water on demand. Super-efficient tankless water heaters can be several hundred to about one thousand dollars higher than their tank-type counterparts but save $108/year in energy costs on average.

As with furnaces, the more efficient tankless water heaters are expected to last longer (20 years) as compared to 10 years for a tank-type heater, so factoring in replacement costs, tankless water heaters often make financial sense. Plus, heating water on demand, you never run out of hot water. Solar water heating is gaining traction, but Solar’s average installed cost of $3,422 (Angie’s List) can be double the installed costs of other water heaters. That’s a 7-10 year payback for solar water heating compared to standard natural gas water heaters, or a 3-5 year payback when compared to electric water heating.

Appliances use almost as much energy in the average U.S. household as water heating. Fortunately, comparing energy consumption across models is fairly easy with the Energy Guide labels.

Lighting, the other main category for household energy consumption, is estimated to account for 10% of your utility usage. LED lighting has dropped so much in cost and the LED bulbs last so long that choosing LED lighting is a no-brainer, though the color temperature of the LED bulb should be taken into consideration when buying.

Photo courtesy: iLumigreen (Click on image to enlarge.)

The nine residences at Wynfield Place were built net zero-energy ready, getting all the way to net zero-energy meant adding a $25,000 – $30,000 solar shingle system to the homes. But due to these homes’ already low energy consumption, the incremental energy savings from the solar shingles could not cash flow vs. the added hit to the monthly mortgage, so the solar shingles were optional.

Fortunately, making energy efficient choices goes hand-in-hand with earth-friendly choices. According to the energystar.gov website, “More than 60% of U.S. electricity is generated by burning coal and natural gas, which releases greenhouse gases and other pollutants into the atmosphere.” Simply, the most environmentally friendly thing you can do in a new home is to make some of the energy-efficient choices above. That’s true for conserving clean water, too. On-demand water heaters often deliver hot water to your faucets and showerheads quicker than tank-type systems, meaning less water down the drain waiting for hot water. Similarly, many of more energy efficient dishwashers and clothes washers use less water in addition to less electricity.

Longer-lasting product choices are generally better for the environment. Roofing choices that last 40- or 50-years don’t end up in landfills nearly as quickly as cheaper shingles. Selecting paint that’s scrubbable means the occasional cleaning rather than repainting. And, some product choices have recycled-content options. Several manufacturers offer carpeting made from recycled plastic bottles that is priced competitively with nylon carpet. Recycled glass tile options and even countertops can be beautiful alternatives.

Photo courtesy of Atlas Roofing – Class 4 Impact Rated StormMaster® Shake Style Shingles (Click on image to enlarge.)

So, there are numerous reasons to feel good about making wise, energy-smart, and environmentally-friendly product choices, starting with the fact that some of them may actually reduce your total monthly cost of home ownership due to energy or insurance savings. Some may increase your home’s resale value, recouping that additional initial investment when you sell your home. And all the while, you’ll know you made a difference in creating a healthier planet for our kids and grandkids.

Still, sometimes these energy wise and green building choices require trade-offs. To meet your budget, you may have to choose between investing in added energy efficiency or, say, that chef-inspired kitchen you’ve been dreaming of. Then there’s your home’s appraisal value. Perhaps all of the energy efficient upgrades add $15,000 to your home’s price, but aren’t reflected in your appraisal, which comes in $7,000 less than where it needs to be for your mortgage. Behind the drywall, that high-performance insulation is a “hidden asset” the appraiser doesn’t see. It is imperative the appraiser becomes aware of these added measures.

Energy and the environment are two lenses used to look at high performance homes. Next time we turn our attention to choices to create healthier homes.

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Cover image: The Bassett (plan #42240) as built by Big Sky Homes using Insulated Concrete Forms (ICF) construction technology.

How Your Choices Affect the Cost of Your New Home

by Michele Weaver | Oct 9, 2020 | HER Home

My daughter asked me to go car shopping with her. With two young boys (one that’s just 8 months old) she was ready for an SUV with three rows of seating. Her preferences had a major impact on the vehicle’s price. First, the middle seats had to be captain’s chairs. Second, the vehicle had to be all wheel drive. Overall price and safety features were the next priorities. Beyond that, vehicle amenities fell into the “wants” and “nice to have” categories as opposed to “needs.”

Like new vehicle buyers, new home buyers’ choices have a major impact on the price of their new home. You need three bedrooms and a flex room that can double as where you occasionally work from home. You’re ruling out homes that don’t have your bedroom on the main floor plus an oversized shower, two sinks, and a private toilet area in your bathroom; or homes that don’t have a single dining area capable of hosting holiday family meals; and builders without a model home you can actually walk-through.

(Click on image to enlarge.)

While those non-negotiables have a direct bearing on price, so also do the design and product amenities you want. You love being outdoors; the covered deck adds $7,000. The beautiful Craftsman-themed exterior is also $7,000 more. Inside, the spa bath upgrade runs $10,000, while the gourmet kitchen package comes in at $8,500. Building green, energy-efficient, and healthy are important to you; the price tag for the high-performance insulation option is $5,000; while the indoor air quality package for $4,000 could make a big difference with your kids’ asthma. And you keep coming back to the option of building that big pantry as a safe room…

Though price is just a number, it conjures up so many emotions! That indoor air quality package can remove 99.9% of all airborne particles and over 90% of viruses. That’s interesting information. But it feels so good making nurturing choices such as caring for my family’s health, or even selfishly, wasting lees time dusting. As a new home buyer, anything you’re willing to spend extra money on is worth more to you than its price. Modifications to the plan, optional design amenities, upgraded products – these choices are very personal, and represent decisions wherein you’re not willing to settle for less.

Though you’ll have to stretch your budget, you’ve fallen in love with the Bonham (#42239V) plan with VELUX® skylights incorporated into the design! You can already see yourself lounging on that covered rear porch, but that’s also going to significantly cut down on daylight in your great room. The skylights will make a dramatic difference. That gorgeous fireplace is emotional, too! Which would you choose? Or, do you give in, opt for both, and commit to be bit higher monthly payment?

(Click on image to enlarge.)

My daughter is now driving a Subaru Ascent. Like most shoppers, she chose to spend more to get what she really wanted, but to stay within the budget she had established there were some trade-offs. When shopping for a new home your experience will likely be similar – with one important difference. Some of the things you want in your new home can be future projects. Create a 3- to 5-year plan for your landscaping rather than funding that cost up front. You might finish off the space over the garage a couple years from now to keep your purchase price down. Doing so may free up money now for other amenities you are longing to enjoy in your new home!

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Cover image: Bonham (#42239V) Plan

Revealing the Real You – Selections for Your Home

by Michele Weaver | Oct 5, 2020 | HER Home

How your choices affect the cost of your new home.

While a 2,000 square foot home selling for $350,000 works out to $175 per square foot, all square feet do not cost the same. For example, square feet in the kitchen are much pricier than square feet in bedrooms. Some of that difference is due to the presence of added products such as cabinetry, countertops, and appliances in the kitchen. And some of that difference can be attributed to your choices.

The Minter (#29305) plan has a kitchen measuring 11′ x 19′. A basic appliance package (microwave over the range, refrigerator, dishwasher) in stainless steel finish prices out at about $3,000 (retail). But stepping up to a top of the line refrigerator, ultra-quiet dishwasher, microwave with convention cooking, and a serious 6-burner gas range puts the appliance package at $18,000!

Kitchen cabinetry. The size and number of cabinets, style, materials used/wood species, finish, construction features such as dovetail joints, and hardware such as full extension drawers and soft-close hinges all impact cost. Cabinetry in this kitchen would start at about $5,000, with custom cabinets more likely coming in around $12,000 or more.

(Click on image to enlarge.)

Countertops. Laminate countertops for this kitchen would start at about $1,200, while solid-surface, granite, or quartz countertops might come in around $2,500 – $3,500 or more. Adding the appliances, cabinetry, and countertops, a budget approach to the Minter’s kitchen totals $9,200; the high-end choices are closer to $33,000. That approximately $24,000 difference works out to more than $12 per square foot in the overall price of the home.

(Click on image to enlarge.)

Bathrooms. As originally designed, the Cedar Pointe (#42389) plan has a 3′ x 5′ shower, private toilet area, and 3′ linen closet in the rear suite. If you want a bathtub, that same bathroom space can be reconfigured to also have a 5′ tub. Is that going to be a $500 or $3,500 tub? By the time you’ve paid for the additional plumbing, faucet, and the 4′ x 4′ window, you may have added $5,000 to the cost of the home.

Then there’s the same cabinetry and countertop cost drivers illustrated in the kitchen example. Even your bathroom mirror(s) can vary in price by $1,000 or more.

Flooring choices are another area that can affect your new home’s cost significantly, and there’s wide variability in costs even within the same product. Carpeting costs vary by the fiber, style, density, and padding. Hardwood varies due to thickness, wood species, size of the planks, and finish. Tile cost differences show up in ceramic vs. porcelain, tile size, and finish. LVT (Luxury Vinyl Tile) and LVP (Luxury Vinyl Plank) have come on strong in recent years due to the combination of durability, looks, and easy care. Several builders offer buyers the choice of LVT/LVP or wood flooring at the same price.

Some choices are more obvious than others. Few amenities can match the ambiance of a fireplace, but to keep price down, dashed lines in the family room of the Womack Springs (#29389) plan show the suggested location of an optional fireplace. Heatilator offers a variety of great looking fireplaces, with electric units starting around $850 and natural gas models running about $1,800 – $6,000+; that’s without installation costs.

Or consider lighting. We’ve had clients come to us to design their one-of-a-kind home and they’ve already picked out one-of-a-kind light fixtures. Stunning – both in their looks and price tag. On the flip side, hidden in plain sight, Design Basics’ popular Hepburn (#42065) plan has sixteen 32″-wide interior passage doors, a size that is truly appreciated when moving furniture! Arched, 2-panel, hollow-core molded interior doors cost around $100 each, while their hefty, sound-deadening, solid wood door counterparts are likely going to run you $200+ each. A difference of $1,600 for the Hepburn – with similar looks.

Photo courtesy of Organized Living
(Click on image to enlarge.)

Storage and organization. You may not have been thinking about spending extra money in your closets, but storage and organization are a high priority with many home buyers. The standard closet shelving offered by your builder may be perfectly adequate. But a well-designed closet system with just the right amount of double hanging, long hanging, cubbies, shelves, and drawers that are easily reconfigured as needs change can be a beautiful thing that eliminates stress. Yes, there’s a price tag. It usually comes down to priorities. If you had to choose between a dream closet and, say, a heated tile floor in your bathroom, which would you choose?

Big and small, your choices of products in the home can add up to significant added costs or significant savings. Another example of why it can be misleading to compare new home prices on the basis of cost per square foot.

Next time we look at the cost of some popular energy efficient and green building choices.

For more resources on thoughtful design and products:

View other articles on our blog
Browse our Her Home™ Magazine
Thoughtful Design Concepts

Cover image courtesy of iLumigreen.

(Product spotlights are for informational purposes only.)

New Home Cost: Cheaper than Expected?

Healthier Home = Healthier Household

Green and Energy-Efficient Homes

How Your Choices Affect the Cost of Your New Home

Revealing the Real You – Selections for Your Home

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