Custom Versus Inventory Homes


Clients often ask “can you save money when you build a custom home?” After all, a 2X4 costs the same whether you are a custom home builder or a track home builder. In reality though, what effects the price of the home is the design. For instance, when luxury home builder Greg Sommerhof is doing research to build an inventory home, he is going to work on a design that targets a certain price. He understands design, what things cost and he knows how certain aspects vary from home to home.

The difference between Greg designing an inventory home versus building a custom home is that he still has to sell the inventory home. The custom home buyer is going to design something and move into it- end of story. And so there is a lot of decisions the custom home buyer makes that are based on emotion and this can have a really big impact on the cost of the home.

Greg has built hundreds of houses. His houses have ranged from under $500,000 and as high as $20,000,000, so needless to say he learned a lot along the way. Therefore, Greg can tap into this knowledge and is able to stretch the buyer’s dollars as far as possible and still build an excellent home.

A good example of this “experiential engineering” is the roof of a home. A custom home buyer may work with an architect and they design the roof to have a 12 X 12 pitch. Neither the architect or customer know how big of an impact that this simple decision will have on the cost of the roof. What they may not know is that in addition to having the cost of the roof trusses, you also have to have something called a “piggyback” added. So instead of one piece you need two pieces. This means more material and labor have to be added to the cost of the roof. However, with GSommerhof Luxury Home’s “experiential engineering” they know they can build a 11X12 pitch roof that won’t require the piggyback, and it will save the customer $4500. And no one will even be able to tell the difference. Situations like this go on and on and on throughout the design process and then suddenly the customer is $40,000 over budget and they don’t know why.

When a custom home client wants to design their “dream home” the process is all about their emotions. Also their architect may not be designing with cost savings in mind, rather they may be trying to impress the customer with their cool concepts and in reality they are just doing their job as they are not really required to keep track of the cost.

Contrast this with Greg’s process. He has built hundreds of homes that he can draw experience from and can avoid those cost “gotchas” and still build an awesome home. Also, he has to be able to build a home that he can sell, whereas the custom home buyer is going to build their dream home and move in. Another benefit of an inventory home is that Greg has most likely built that same style inventory home 4 or 5 times and has worked out the kinks. His experience allows the inventory home to have the most value and allows the customer to put their money towards what means the most to them.

GSommerhof Luxury Homes also designs a lot of custom homes from scratch for customers, but they always cost more per square foot than their inventory homes. The custom homes aren’t necessarily better either. But they do cost more per square foot. In some instances, a customer will come to him with plans from an architect and Greg is able to re-work certain aspects of the plan and save the customer money. In some cases he is even able to add back features that the customer didn’t think they could afford.

The bottom line is this, if you are planning on building a custom home you may want to give GSommerhof Luxury Homes a call first. You can checkout some of their outstanding inventory homes that feature “experiential engineering” and this will bring maximum value to your home building experience.