There are several ways to compile a custom home building budget, but the purpose is the same, to develop a unified way of estimating how much your dream home should cost to build. One formula is for estimating cost is cost per square foot. However cost per square foot varies according to the quality, and materials. Of course hardwood floors cost more than tile over subfloor, and stone walls cost more than vinyl siding. Therefore one must find homes for sale that compare to what you want, consider their purchase price and square footage to calculate their cost per square foot. In order to calculate cost per square foot, you must subtract the cost of the land the house is on, and adjust the price according to the location. Also consider that a custom home will cost a little more than a production home.
In order to find homes to compare with yours, check the local MLS listings. Any real estate agent will be willing to help you here. You will be able to find the information there for local homes. Another method of estimating home building costs are construction estimating guides, like R.S. Means, F.W. Dodge, and Home Tech. Construction estimating guides offer cost per square foot for several different types of construction and quality levels. Also included is the cost information of commonly used building materials, and labor cost estimates. After calculating the cost of the home , they offer “geographic multipliers” which will adjust the price to your area. Just a word of caution, this method might be over the top for some beginners.
You can get as detailed as you like calculating the price of lumber in board feet, and shopping for floor tile and calculating the square footage price, but in the end it is up to the contractor or home builder. In my experience as a contractor though, clients who have done this kind of research are much more prepared for the meeting. Plans come together much faster when clients are prepared, know how much thing should cost, and already have a realistic idea of what they can afford. Custom home building budget tip: You might consider talking to at the minimum three home builders or contractors and get their view point on this. They might be willing to help you put a detailed specification together.
The main purpose of calculating is to help you know what to ask for according to how much money you have to spend, a.k.a your custom home building budget. In the end there will be compromises between what you want and what you can afford. Do not be tempted to scrimp on quality though. Always make sure that the home builder or contractor is using an adequate grade and thickness of plywood for example, and clarify that in your meetings so that he does not quote the price for a lower grade when you wish to go heavier.
Custom home building budget tip: When gathering quotes from different contractors make sure all the bids are for the same grade of construction and the same or similar materials. It is unfair to compare someone who is going to use ¾ inch ply wood to someone who thinks 5/8ths or even ½ inch plywood is sufficient or worse yet plans to use cheap particle board. Make sure that you clarify the grade of materials which will be used for floors, roof and exterior walls, and that all the contractors are clear on the level of quality and durability for each material used which quotes should be based on. No one wants to go out to the job site half way through construction and see substandard materials being used. It is hard to correct the situation once it has gone that far, so clarifying up front protects everyone involved. It is vital when discussing a custom home building budget, that everyone involved understands what exactly is being requested for the price.
1. You can estimate cost by using a cost per square foot formula. However cost per square foot varies according to the quality, and materials.
2. Check the local MLS listings to compare homes of similar size. Or use estimating guides, like R.S. Means, F.W. Dodge, and Home Tech.
3. When gathering quotes from different home builder and contractors make sure all the bids are for the same grade of construction and the same or similar materials.
4. Learn more about the overall homebuilding process by downloading the free new home Steps Guide above and become savvy on home building from start to finish.
I hope this helps you. Good luck in your overall home building endeavors.