How Much Will Your New House Cost?

A building plans pro tells how to estimate your home building costs

House under construction
A new construction in Delray Beach, Florida. © Jackie Craven

You want to build a new house, but can you afford it? To plan your budget, start with a free online building cost estimator. Then look for hidden costs that will add to your final bill. Here are tips from a building plans professional.

"Guesstimate" the Cost of Your New Home

1. Contact Local Builders
Meet with builders who construct houses that are similar in size, quality, and features to the home you want.

Builders will tell you how much per square foot they usually charge for home construction. They can also give you a ballpark idea of what your dream home might cost. However, it is important to know exactly what is included in the price. If you ask, some builders will provide you a list showing the materials they will use.

2. Count the Square Footage
Look at newly constructed homes that are similar in size, style, quality, and features to the home you want. Take the price of the home, deduct the price of the land, and divide that amount by the square footage of the home.

For example, if the home is selling for $230,000 and the land costs $30,000, then the construction cost is around $200,000. If the home is 2,000 square feet, then the cost per square foot is $100.

Use several new homes in your area to get an approximate square footage price. After you have calculated an average square footage cost, you can multiply that cost by the finished square footage of your house plan to get a ballpark estimate.

3. Expect Some Features to Cost More
The most expensive areas in a home are usually the bathrooms and the kitchen. The number of windows and the size and quality of windows can also affect the cost. Vaulted ceilings and high roof pitches can increase the cost of a home. When using other homes to calculate an estimate, be sure the home has a similar style and features of the home you plan to build.

The cost per square foot is often higher for a small home than that of a larger home. When building a larger home, the cost of expensive items (such as a furnace or kitchen) is spread over more square footage. Consequently, a larger home may have a lower square footage cost than a smaller home. Also, it usually costs less to build a two-story home when compared to a one-story home that has the same square footage. This is because a two-story home will have a smaller roof and foundation. Plumbing and ventilation are more compact in two-story homes.

Small details in the design of your home can make a big difference in the price. To save on costs, begin estimating construction expenses before you select your final blueprints. Here are important factors to consider:

  • Size of Home: When building a home, it's best to work with even numbers. Have your home size rounded up or down to increments of two feet. This reduces wasted materials. Also, it's most economical to build a home that is no deeper than 32 feet. If the depth exceeds 32 feet, then your roof trusses may need to be specially designed and will be more expensive.
  • Architecture of Home: Homes that have a rectangular or box shape cost less to build. Having more angles and corners in the architectural design of your home can increase the amount of labor and materials needed to build. Dome shaped homes often make efficient use of materials and tend to cost less than other shapes.
  • Site Preparation: Preparing a site for construction can have a big impact on the cost of a home. Building on a flat lot will usually cost less. If you have to haul in lots of dirt, do a lot of grading, clear trees, or blast through large rocks, then site preparations can become more expensive.
  • Cost Overruns: Usually the finished cost of a home is more then the original bid price. Cost overruns occur from overspending the allowances, making changes, and encountering unforeseen problems. Proper planning can greatly reduce cost overruns. In general, it is a good idea to allow an additional 10% to cover unexpected costs.
  • Inflation and Market Conditions: Usually the cost of building a home increases around 3% to 6% per year. If it will be several years before you begin construction, remember to include inflation into the cost estimate for your home. When using other homes to compare prices, try to use homes that have been built within the last six months.

    So how much will your new home cost?

    It's all in the timing. The famous architect Frank Gehry once presented his design vision to a client (probably more than once), and the client's first remark was, "How much is this going to cost?" Gehry responded that he didn't know. Say, what? With all of the variables listed here, market fluctuation may be the most important. The time of year, the region's climate, local building code regulations, the local and national economy—all affect labor costs. This is why home cost estimates are binding for only a certain number of days—labor costs can change quickly. If they do stay the same year after year, check the materials list, where the costs probably are being absorbed by lowering quality. Although sometimes costs do go down, playing the market is risky.

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