What’s the Cost of Building a Custom Home

Pre-built homes may not suit the needs of an individual perfectly. Renovating a pre-built home to one’s likening can oftentimes be just as expensive as building a custom home from scratch. The popularity of custom-built home is starting to increase as the housing market begins to improve. The demand for contractors and architects is significantly improving and people with expendable income are opting to build the house of their dreams as opposed to buying an old house. Several steps are involved in building a custom home. Deliberation and patience is needed as the process can be both expensive and rewarding at the same time.

Consult an architect or contractor
One needs to meet a builder with extensive experience in constructing homes similar in size and complexity to the house of your dreams. Contractors can usually estimate the overall cost of building a home before the first brick is laid. The initial stages of home construction includes drawing a comprehensive floor plan, estimating square footage, and choosing the building material.

Square Footage
The most important factor determining the overall cost of a custom-built home is the square footage. While the cost-per-square-foot may vary depending on the neighborhood, the proportions will always be the same. The more space a house requires, the more it will cost. After purchasing a lot, the remaining expenses can be easily calculated. For example, if a plot of land costs $50,000, and the construction of the home costs $200,000, the overall cost of building the house will be about $300,000 after factoring in taxes and unexpected expenses.

Special features and complexity

The square footage is not the sole determining factor of the price of a custom home. The most expensive rooms in a home are the kitchen and bathrooms. Plumbing costs usually add to the overall expense of these rooms. Additionally, amenities like an indoor jacuzzi and private sun room will cost more. The overall number of windows and quality of building materials will also add to the cost of the home. For example, vaulted ceilings and complete basements will significantly inflate the cost of one’s dream home.

Unexpected costs
A common mistake made by novice home builders is underestimating the cost of a custom-built home. It is important to note that the overall cost of building a home increases between %3 to %5 per year. The longer it takes to build a home, the more expensive it will be. Additionally, unexpected expenses like radon reduction, pest control, and personnel changes will dramatically affect the overall cost of a home. Experienced contractors usually add about %10 to the estimated cost of building a home to account for unforeseen circumstances.

There is no perfect way to calculate the cost of building a home from scratch. A good estimator would be comparing the cost of a similar home in the neighborhood that has built within the last six months. After the first estimate, add between 10 and 15 percent to account for unexpected changes and costs that arise during construction. After building a home, the resale value of the home often eclipses the overall cost.