Building A Home-How Much Will It Cost?

Estimating Building Costs Is Key To Successful Project

At the early stages of the home building process you should decide on what type of home you would like to build, and then estimate the cost to see if your expectations are reasonable for your budget. Here are things to consider as you estimate the cost of building your home.

  • Square Footage-Calculate the square footage of the home you wish to build. Then find some new homes in the area and see what they are selling for. Compare the home prices to the cost of building a new home.
  • Contractors-Check with local builders to see what they charge for similar homes. How much do they usually charge per square foot? Ask them what is included in the price they charge. Do they have a list of materials they typically use for building?
  • Pricing Options-Understand which home features have big cost variations and how your choices will affect your building costs. For example, kitchens and bathroom costs vary widely. Window prices also vary widely depending on factors such as size and quality.
  • Ceilings and Roofs-Consider if you want a vaulted ceiling or a steep roof, as these features may add significantly to the building price.
  • Economy of Scale-Building a larger home because the costs of some major features (e.g., heaters, kitchens) are spread out over more square footage in a larger home.
  • Height-Building a two-story home of a given square footage is generally more economical than a one-story home because the two-story home requires a smaller foundation and roof, and also because the plumbing and ventilation systems will be more compact.
  • Shape-A basic rectangular shape is the most economical, so if you want to build a home with more corners, angles, or curves, then it will be more expensive in both materials and labor.
  • Clearing the Land-Extensive clearing or grading can add substantially to the cost of building a home, especially if you need to bring or remove large quantities of dirt or rocks. Ascertain in advance whether this will be required and figure it into your cost projections.
  • Once you have Blueprints, you may consider taking your plans to the local lumberyard to get a price for the materials. They will do all the calculating, and you will then have a clearer idea of what it will cost.
  • Inflation-If you are putting off construction for a year or more you will need to add in the cost of inflation, about 4% per year. Some materials (e.g., framing lumber) may go up substantially due to changes in global markets, though other components of construction may stay about the same or even decrease.