How Much Does It Cost to Build a House

Cost to Build a House

When building a house, the cost is, for most of us, a primary concern. We have all heard horror stories of skyrocketing costs, out of control builders, and homes that have to be sold before move-in date because of the unexpected costs. Fortunately, many times these horror stories arise through lack of preparation and are avoidable.

The first step to take when building a house is to determine what you can afford. Be sure to take into account the property that you will be building on, whether you will need to bring in utilities if you will need to dig a well, and how long your driveway will be.

It seems like an insignificant point, but it is usually cheaper to build in a subdivision than in a more rural area. If you build in a rural area, you may need to pay to run utilities, dig a well, and put in a half a mile of the driveway before you even dig the footers, so you can see how costs can get out of control fast.

Once you have decided how much you can afford to spend and where you would like to build, the internet is a great resource. There are a variety of building cost estimators, with varying degrees of accuracy available online. By using several and averaging the results, you can get an idea for the size of house that you can afford. Once you have a basic size in mind, start looking at plans.

Depending on how comfortable you are with your budget there are several things to keep in mind when looking at house plans.

*When adding square feet, it is generally cheaper to go up (one and a half story or full two-story) as opposed to going out (larger footprint ranch).
*The more corners a house has, the more expensive it will be foot for foot (a rectangle is cheaper to build than an L or T shaped house).
*Along those same lines, a complicated roof line, with offsets and multiple dormers is more expensive to build than a straight, moderately pitched roof.

This is not to say that you have to build a boring house, but by knowing where the costs come from, you can more easily decide what is important to you.

Once you have decided on a floor plan, it is time to send it out for bids. This is the time that you stand the most chance of accurately predicting the cost of your house. Tell the contractor that you want a very detailed bid. Kitchen: $30,000 is not enough. You need to know what is allocated for counters, cabinets, wiring, paint, everything.

If you have the bid broken down into small enough categories, you will be better able to see where your money is going, and as such, be better able to see if the contractor’s estimate is in line with your expected expense. If not, do not dismiss him out of hand, find out where he got his numbers, it may be a simple lack of communication between you and the contractor or he may be taking into account something you did not realize would add to the cost, such as extensive drainage, backfilling, or difficult access.

Always find out where the numbers came from. Likewise if the numbers come in much lower than expected, ask for an accounting. It is, unfortunately, all to common that some contractors will give a low bid with no hopes of being able to complete your house for that price. You then find yourself in the difficult situation of heading back to the bank for more money, which they many times do not take to kindly to.

The best way to alleviate this concern is to speak with past customers of your potential contractor. How close to budget where they? Although a lot of the budgeting is laid on the shoulders of the home owner, hiring a contractor who has consistently finished a project within 2 to 3% of their budget gives you an excellent head start on your building plans.

As you can see, building a home is no small undertaking, but by taking the time, through every step of the way, to crunch the numbers and do the detail work that is oftentimes easy to ignore, you stand an excellent chance of finishing up your project within your projected budget.

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