What Luxury Home Builders Consider Worth the Splurge

Kelly Marshall for the Wall Street Journal

When Drew Daniels, a luxury-home builder in the Chicago metro area, shows clients the roughly $1.5 million house he built last year for himself and his family, they ooh and aah over the French-country finishes, the European white oak floors and a “dog room” that includes a shower for George and Harry, the family pooches.

But to Mr. Daniels, director of development for custom-builder Sexton Development in Lake Bluff, Ill., the home’s best features are invisible—the $120,000 radiant-heating system, the $20,000 lighting system that creates “moods” in nearly every room, as well as numerous energy-efficient components.

Try as he might to interest guests in what he jokingly calls the “nerdy, geeky, OCD-psycho” elements, Mr. Daniels says clients get most excited about his screened-in porch. “People see it and say, ‘I want one,’ ” says Mr. Daniels, who is 38.

Luxury builders who build their own homes can splurge on the best materials, the latest technology and top-notch craftsmanship. The result is a showhouse-worthy property that is part innovations lab and part marketing kit to show potential clients what a construction company can accomplish.

While real-estate agents urge people who build their own homes not to include too many oddball amenities, builders are proud of the extreme features they include in their own abodes. In Lubbock, Texas, for example, custom builder Robert Wood completed a 5,200-square-foot house for himself and his wife in 2015 that includes seven ovens.

The house, which cost roughly $1.3 million to build, is constructed around a courtyard that has a pool and an outdoor dining area. An indoor/outdoor stainless-steel kitchen with four ovens is separated from the courtyard by a retractable glass wall. The ovens come in handy when Mr. Wood and his wife, Candace, entertain their friends and host charity events. (The home’s main kitchen has three additional ovens.)

“The courtyard feel is the No. 1 thing I wanted to try,” says Mr. Wood, who says he got the idea from homes in Palm Springs, Calif. An enclosed courtyard ensures privacy, he adds, and orients the view away from the arid West Texas landscape. Though the home has three outdoor spaces, the intimate courtyard “is by far the one we use the most,” says Mr. Wood, 54.

What builders consider worthy of including—or excluding—from their personal homes can be revealing.

The features deemed “essential” by buyers who earn over $150,000 a year are relatively common comforts, such as laundry rooms and ceiling fans, plus basic “green” features such as Energy Star appliances and energy-efficient windows, according to the results of a 2017 National Association of Home Builders survey of buyers’ home preferences.

But luxury builders tend to have much higher standards for what constitutes an environmentally friendly home. Some invest small fortunes in the latest energy-efficient heating systems, weather resistant materials and building techniques that minimize energy loss.

Luxury-home builder Arnold Karp spent $175,000 on a geothermal heating and cooling system in his new $2.7 million contemporary home in Greenwich, Conn. Mr. Karp, 57, knows that even if his system slashes his utility bills dramatically, it may not pay for itself. But nonetheless, it’s still a great marketing tool for potential clients.

“It helps sell the house to ‘green’ and ‘non-green’ buyers who care about operating costs and the environment,” says Mr. Karp.

Contractors are often able to rationalize high upfront spending because they use their own homes as both testing grounds for new technologies and as showcases they can take potential clients through to help close a deal. But it’s a two-way street: They are also able to use clients’ experiences to inform their choices. Mr. Karp knew to stay away from a complicated, multi-device, iPad-controlled “smart home” technology system because he has fielded so many complaints about them from customers.

“Everybody calls me two hours before the Super Bowl to tell me their fancy technology is not working,” says Mr. Karp, who is president of Karp Associates in New Canaan, Conn. Both Mr. Karp and Mr. Daniels, having heard such gripes, made sure their systems had buttons on walls that even young children could use without help.

And some builders’ clever features don’t win over all clients. Mr. Daniels’ “dog room” has stone floors and baseboards, and the doors are lined with Plexiglas so the dogs can’t damage them with scratches. It leads to the backyard and has a shower, so muddy paws can be quickly cleaned.

“If clients have a dog, they think it’s amazing,” says Mr. Daniels. “If they don’t, they think I’m an idiot,” he cracked.

These builders say they don’t take advantage of cheap labor in building their homes. “I’d rather pay than owe people favors,” says Mr. Karp. They say they pay their subcontractors—electricians, plumbers and other tradesmen—full freight, in the interest of maintaining good relationships with people who are key to their success in business.

“I would sell my house if someone offered me a big price. Then I would have to face them,” which would be uncomfortable if he had demanded cheap or free work, says Mr. Wood.

But builders do admit to some foibles familiar to anyone who has built their own home. Mr. Daniels’ perfectionism comes with a high price tag: The ceiling in the screened-in porch is made from reclaimed wood from a barn in Wisconsin, he says. Each board needed to be sized, squared, cut and installed, adding to labor costs.

Builders aren’t immune to a version of the classic upsell: Mr. Wood said that while appliance and other hardware suppliers will often provide discounts to people in the business, in some cases he paid full fare in exchange for upgrades to the next level of luxury.

More proof that when it comes to their own homes, builders are only human: Mr. Karp’s budget numbers got fuzzy as he got excited about glamorous upgrades, like a Jacuzzi with a fire feature, and backlit stairs that “make it look like you’re walking up a magic carpet,” he said.

“My original budget was $2.3 million, but we ended up at $2.7 million,” says Mr. Karp.

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