I have an opportunity on a property with a house that needs to be torn down. I am hoping to find out what the cost of a mid-grade new construction is roughly in the area to use as negotiation with the seller. I'm new to this whole process so if I'm asking too vague of a question, please let me know so I can learn from it.
Thank you all.
Depends on the area. To the customer (not builder cost) in the mid-cape area is $250-$300 psf. In Bridgewater it is around $175-$200 psf. This is for a typical 2,000 sq. ft. colonial type house with 2 car garage. Average finishes, low / mid range kitchen. The suburbs of Boston I'm sure are twice as much...
Your offer for the property should be land value minus demo costs. Be sure to check for underground tanks and check to see if you can use the existing Title V. That will be a big savings.
@Rob Steers My two high-end projects in Watertown totally gut rehab super high end $190 per square foot.
Realize this is an old thread but for FWIW, a lot of the ranges you hear will depend on how you calculate per square foot. If you look at most of the new construction that comes on, they will advertise finished basements or third floor bonus rooms in their square footage (and some even garage space). But most of the builders I know tend to talk about their psf costs in terms of two floors of living.
The other big variable when builders talk about cost per sqft is site work—are we talking cleared, level lot with sewer or a wooded lot on septic. If the latter, figure on a minimum of $25k to build a septic system, and 10k to clear your lot. Most people won’t include this when they give you a cost psf—it’ll just be the “bricks and sticks.” Regardless, you can safely figure on $200/sqft all in on a mid grade new build.
I agree with @Charlie MacPherson . Your best for negotiating may be looking at what other new construction lots have sold for (check out the new construction on Redfin, then track down the deed to determine what the builder paid for it) and using those as your comps for the tear down.