Budget-Custom Home Building Cost Guide
Welcome to episode one of our custom home building cost guide series. In today’s episode I want to cover the budget. When budgeting a custom home, a couple different scenarios arise depending on the owner’s needs. The first scenario includes land ownership. When an owner already owns the land in their name, they often have an idea of what they’re looking to build, which includes a certain house size, family needs, and level of finishes.
Analyzing Different Costs
The first costs to consider are the site costs. Site costs include what’s needed to improve the land. Many times, a lot requires a septic system and drilling a wet water well. A well requires a storage tank, which may be a 10,000-gallon tank. Site costs also include soils compaction, grading, landscaping, water meter installation, a sewer tie in, or even sewer extension. Creating a buildable lot requires many different improvements. Even utilities can create a major roadblock. After we determine the site costs to improve the land, we will determine a budget for plans and design, including permit fees, and the left-over amount will dictate how much an owner can spend to build the house.
Finishes
The finishes of a house include many different factors and questions to consider. What is the floor going to look like? What kind of bathroom finishes are desired? How big will the garage be? Will the countertops be made from stone or tile? We consider many different aspects that are discretionary beyond the actual structure.
Calculating Square Footage
Based on an average square foot price from current jobs that we’ve completed, we analyze available spending limits on home finishes. For example, if we have $600,000 to work with, we divide that amount by the living space of the desired home as well as the size of the garage and porches. This number gives us a close comparison on budget prior to drawing up the plans. Since we build every day, our current data assists us in knowing that comparison price.
When Land Is Needed
When a customer does not own the land, it adds one additional step. In this instance, while analyzing the necessary site costs during the buying process, we can determine how much a customer will need to spend on buying property. This aids us in making appropriate land offers for purchase. If a client wants to build a 2,500 square foot home with a budget of $500,000, that price point is based on the desired finishes, and we will work a little backwards to determine the site costs for the property and then the remaining amount will give us an idea of how much can be spent on the lot. We specialize in analyzing numerous factors that establish value so our clients can get the right land bought at the right price in accordance with the proper budget to build their home.
The Design/Build Contractor Advantage
Working with a design build contractor to establish a real budget provides significant help. We have experienced many people who’ve contacted us with completed plans yet end up $200,000 to $300,000 over budget. A draftsman or architect has already drawn the plans prior to talking to us, which is a large cost, however, cutting out nice floors, or beams, or cutting garage square footage will not impact the budget enough to meet the needed price point. Keep in mind that the design/plans/engineering process can cost upwards of $20,000 or even more. Customers with pre-drawn plans have walked through our consulting agreement or a letter of intent bid process and had to scrap the original plans. Scrapping plans and starting over basically means throwing the originals away. Redoing all that effort can bring up a lot of frustration and emotion, so it is very important to establish the budget for every aspect of the project before stepping forward to start.
Stay tuned for more budgeting in episode two.
We Build CUSTOM HOMES, ADUS, & Do HOME REMODELING
Top Notch Quality Homes, on time, on budget, and without hassles.
Freeman’s Construction, Inc. has been building new custom homes and completing whole house remodeling projects in San Diego County for over 37 years. To schedule a project consultation, please call us today at 760-788-6846 or fill out a request form.
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Ramona, CA | Poway, CA | Escondido, CA | Julian, CA | San Marcos, CA, | San Diego, CA | Rancho Santa Fe, CA | Lakeside, CA | Rancho Bernardo, CA | Scripps Ranch | Carmel Mountain Ranch | 4 S Ranch
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