One of the most common questions homeowners ask when planning a custom home is:
“How much do you build for per square foot?”
It feels like the right question — but in reality, it’s one of the most misleading.
Here’s why:
Cost per square foot is a blunt average, not a real price.
Two homes with the same square footage can differ dramatically in cost depending on:
- structural complexity
- ceiling heights
- foundation type
- mechanical systems
- window sizes and counts
- rooflines
- garages, decks, and basements
A simple, box-shaped home and a highly detailed custom home may both be 2,000 sq. ft., but their costs can be tens or even hundreds of thousands of dollars apart.
When a builder gives you a square-foot number early on, it’s often:
- based on past averages
- missing key details
- or intentionally simplified to get you comfortable before real costs appear later
Square-foot pricing rarely protects the client.
Why Asking About “Markup” on a Cost-Plus Build Can Also Be Misleading
The next question many homeowners ask is:
“What percentage do you mark up on a cost-plus build?”
Again, it sounds logical — but it can still miss the real risk.
Here’s the problem:
A percentage-based markup means the builder earns more money when costs go up.
That creates an inherent conflict:
- upgrades increase builder profit
- change orders increase builder profit
- budget overruns increase builder profit
Even well-intentioned builders are financially incentivized when costs rise.
The Better Question to Ask Any Builder
Instead of asking:
- “What’s your cost per square foot?”
- “What’s your markup percentage?”
A more meaningful question is:
“Do you fix your management fee — and if so, what is that fee based on?”
This question tells you far more about:
- alignment of interests
- cost transparency
- and how risk is shared
How Landen Does It Differently
At Landen Design Build, we fix our project management fee.
Here’s how that works:
- The fee is pre-set up front
- It’s based on a mutually agreed-upon building budget
- That budget is established through a detailed, trade-by-trade tender of real job costs
- Our fee does not increase if you upgrade finishes or adjust selections, or if cost go up
- Our fee is not applied to the contingency allowance
- Nor is it applied to the GST
In simple terms:
Landen earns the same project management builders fee whether you build a little more or a little less.
Why a Fixed PM Fee Matters to Homeowners
Because Landen’s PM fee is fixed:
- there is no incentive to upsell
- no incentive to inflate allowances
- no incentive for budget overruns
- and no pressure to rush decisions
You get good sound advice based on what’s best for your home, not what increases a builders profit line.
The Bottom Line
Cost per square foot tells you very little.
Markup percentages don’t always protect you.
But a fixed and, clearly defined project management fee, based on real costs and agreed budgets, creates transparency and alignment.
That’s why the best question you can ask a builder isn’t:
“How much per square foot?”
It’s:
“How do you as the builder get paid — and what happens if costs change?”
See also our free builder comparison calculator
Custom Home Builder Comparison
Traditional Builder vs. Landen Design Build
| Key Question | Traditional Builder | Landen Design Build |
| How do you price a home? | Often quoted as an estimated cost per square foot early on | Priced from a detailed, trade-by-trade tender of real job costs |
| Is cost per square foot a reliable number? | Used as a rough average that often changes later | Avoided — pricing is based on actual scope, specs, and site conditions |
| How does the builder get paid? | Percentage markup or variable margin | Fixed project management fee |
| Does the builder make more if costs go up? | Yes — higher costs = higher markup | No — Landen’s fee stays the same |
| Is there an incentive to upsell upgrades? | Often yes | None |
| Are allowances commonly used? | Frequently — and often underestimated | Minimized through early selections and real pricing |
| How is the budget established? | Early estimate, refined later | Mutually agreed budget based on full tender |
| Is the builder’s fee applied to contingency? | Often yes | No — Landen does not charge fees on contingency |
| What happens if I change finishes or specs? | Builder’s profit usually increases | Landen’s fee does not change |
| How transparent are trade and supplier costs? | Limited visibility | Full transparency — clients see real costs and pay bills directly |
| Upfront deposit required? | Typically yes | No upfront deposit required |
| When does final pricing become clear? | Often after construction begins | Before construction starts |
| Who carries cost overrun risk? | Mostly the homeowner | Managed without added fees |
| Best suited for… | Clients comfortable with variability | Clients who value transparency, control, and alignment |
Simple takeaway for clients:
Traditional builders profit when costs rise.
Landen is paid the same management fee either way.
Below is a “Which Builder Is Right for You?” quiz
Which Builder Is Right for You?
A Simple Quiz for Alberta Custom & Acreage Home Builds
Answer each question honestly. There are no wrong answers — just different priorities.
1. How do you want your home priced early on?
A) A quick cost-per-square-foot estimate to get a rough idea
B) A detailed budget based on real trade pricing and actual specs
2. How comfortable are you with pricing changing during the build?
A) I understand things change and I’m okay with variability
B) I want as much clarity and control as possible before construction starts
3. How should your builder be paid?
A) As a percentage of total construction cost
B) A fixed project management fee agreed to upfront
4. If costs increase, how do you feel about your builder earning more?
A) That’s just part of the process
B) I’d prefer my builder’s compensation not be tied to rising costs
5. How important is cost transparency to you?
A) I trust the builder to manage costs behind the scenes
B) I want to see real trade and supplier pricing
6. How do you feel about allowances and provisional budgets?
A) They’re normal — we’ll adjust later
B) I’d rather minimize allowances and make selections early
7. What’s your tolerance for upgrades and change orders?
A) I expect changes and understand they often add cost
B) I want flexibility without feeling financially penalized
8. Do you expect to pay a deposit before real planning begins?
A) Yes — that’s standard
B) No — I’d prefer a milestone-based process without an upfront deposit
9. How important is alignment between design and construction?
A) Design and build can be separate
B) I want design decisions informed by real construction experience
10. What matters more in your decision?
A) A familiar, traditional building model
B) Transparency, alignment, and a low-pressure process
Your Results
Mostly A’s
A traditional builder model may be a good fit for you.
This approach often includes:
- early cost-per-square-foot estimates
- percentage-based markups
- allowances refined during construction
- builder compensation tied to total cost
It can work well for clients comfortable with variability.
Mostly B’s
You’re likely a strong fit for Landen Design Build.
Landen is designed for clients who value:
- detailed, trade-by-trade budgeting
- a fixed project management fee
- no incentive to upsell or inflate costs
- full transparency
- no upfront deposit
- and clarity before construction begins
Still Not Sure?
That’s exactly why Landen offers a free design service test drive — a low-risk way to explore ideas, confirm feasibility, and understand costs before committing.