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Thinking about an addition? This is how much it will cost you, plus other important advice

Should you move, or is expanding your current home the better option? Here’s what to consider.

If you need more space in your home, you might feel stuck these days. With fairly low inventory in the real estate market and high interest rates, it’s a tricky time to buy. And if you got a great rate when you bought your current home, you might not want to sell. “With interest rates preventing some people from moving, I’m seeing more inquires about additions,” says Chris Black of Dallas-based Blackline Renovations. Is adding to your current home the right solution for you? Here’s what to think about before getting started.

Know the limitations of your lot and your neighborhood.

First to know, of course, is if your lot has room for an addition. “From a city standpoint, lot coverage is a big deal,” says Dylan Campbell, senior estimator at Texas Built Construction. “A standard percentage of lot coverage that we see is 60%. So if you’re maxed out on your lot, we just can’t do anything.” Some HOAs may also have guidelines on lot coverage.

Texas Built Construction helmed the addition of a media room and flex space to this house.(Courtesy Texas Built Construction)
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Another limiting factor is the price per square foot in your neighborhood. No matter how much you want to add to your home, in the end your home’s overall value has to stay consistent with your neighborhood.

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“One client wanted to build a 2,000-square-foot addition” on an existing 2,000-square-foot home, Campbell recalls. “Their current home value is around $400,000, but to build that 2,000-square-foot addition was about $400,000. You just can’t overbuild the neighborhood.”

Bottom line: If you’re putting more into the home than it will appraise for, you won’t be able to get financing for the project.

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The cost is very dependent on the specifics of your project.

Perhaps you want a new master suite, additional bedrooms for kids or a mother-in-law suite; the additional square footage could also go toward a playroom, media room or an office. Some people choose high-end finishes. Others cut costs where they can. Each project is unique — and it’s for that reason that Black says it’s difficult to give a generic estimate for different types of additions.

In this photo, a garage addition by Texas Built Construction is underway.(Courtesy Texas Built Construction)

“There is no way to price remodeling or additions by the square foot,” says Black. “Each project has to be priced for what it is and the quality of materials that go in it. Building a home can be priced by the square foot because every home has all the same components in it. Remodeling is unique. People think that because it’s all construction, you can price by the square foot, and that’s simply not the case. If I could price my remodeling projects by the square foot, I wouldn’t need a dedicated estimator.”

Still, some experts are willing to provide ballpark figures. When it comes to the cost of an addition — media room, primary suite, whatever — Campbell suggests that homeowners be prepared to spend around $200 a square foot. “That’s the most common price point we reference” before knowing the specifics of a project, he shares.

This image shows the finished product, which is attached to the original portion of the home.(Courtesy Texas Built Construction)

If you’re adding a garage, that project will generally cost less — between $120 and $160 per square foot, suggests Campbell. “They’re a big empty box, usually with a driveway to be poured. Home additions on the second floor of an existing house usually are the ones that are above the $200 per square foot threshold, because you have to demo and reorganize the mechanical wiring and ductwork you are building on top of, as well as reframe to support the added structure.” Mother-in-law suites that feature a full kitchen can also come in on the upper end of additions.

Choose a contractor you trust, not the one with the lowest bid.

The biggest mistake homeowners make when looking for a contractor for a major home addition or remodel is relying on project quotes to help them choose, Black says. “That needs to be bold. That needs to be the title of the article,” he laughs. “Stop getting bids.’”

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Chris Black of Blackline Renovations oversaw the second floor addition you see on the right side of this M Streets home. It was critical to maintain the distinctive look of the home in the new spaces.(Courtesy Blackline Renovations)

Why are bids not effective in helping people choose a contractor? When you just talk to a contractor about a project and get a price, they really don’t have enough information to give you a solid estimate, says Black. Most of the time, they are throwing out a low number hoping to get their foot in the door. “You don’t have any specifications. You haven’t designed anything. All you’ve got is a concept,” explains Black. “But once you start designing it — if they design it, maybe they just wing it — you are going to be stuck with change order after change order. No one’s going to stick with that low number based on an idea. They’re going to stand behind the fact that, ‘Hey, we didn’t have plans and specs.’”

Since each project is so specific to the structure, the unique challenges of the property and the desired end result, you can’t drill down to an exact cost when you first speak to a contractor. A price range from a contractor is really valid only after you have full architectural plans and specifications as well as an engineering report.

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Instead of quoting out a project, like you would a plumbing repair, treat it more like a job interview. “You have to pick someone you trust. Interview these people, call their references, look at their work, look at their awards, look at the customer reviews,” advises Black. Not sure where to start? Black adds that NARI North Texas is a good source for quality contractors.

Be realistic about the timeline and hidden costs.

Black underscores the time it takes to get from initial inquiry to enjoying your new space. “Additions can take five to eight months to design, two to three months to permit and finance, and six to 12 months to build,” he says. “All of these durations are longer than pre-pandemic schedules. Design is taking longer due to everyone’s busy schedules, the permitting takes longer because of understaffed city employees and increased regulations, and construction takes longer due to labor shortages and supply chain problems.”

This Preston Hollow home looked completely different before the homeowners called in Blackline Renovations. The company added a second story as part of the project, bringing the home from 1,900 square feet to 3,700 square feet.(Vaughan Creative)
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Design, permitting and construction costs aren’t the only items to factor into your budget. Did you catch that building an addition can take several months to a year? Depending on the scope of the project, you may need to find somewhere to stay for an extended period. If that’s the case, you have to plan for the costs of moving, deposits and rent as well.

It’s clearly a process, so make sure an addition will truly meet your needs before moving forward. Even if you love the new space, for example, if you don’t love your neighborhood, you may still feel like you want to move. “The first thing I ask [potential clients] is how long they think they’re going to be in the house,” notes Black. “If they’re only going to be there a few years, is it worth going through all this trouble and all this expense?”

If an addition does feel right to you, though, you can come away with the perfect home for your family. “Dallas market prices are really strong, and people shouldn’t be scared of doing an addition,” says Black. “They need to understand how much work goes into it, the timeline, and the difficulties of designing it. But if they love it, and they don’t see themselves moving in five to 10 years, they’re a good candidate.”

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