Your home builder or contractor has all the right software for calculating home building costs. Because he has entered the prices of all the building materials he uses, and because the software automatically calculates the quantity of each material, and multiplies that quantity by the price, he can tell you virtually to the penny how much your home will cost. If you want to be able to estimate the cost of building a home, your estimates will be much rougher than his, because you do not know the locally available price for each material.

## Calculating Home Building Costs: Why Estimate?

So if it is so easy for a home builder to figure out how much your home will cost, why not just ask? Well for one thing, while he can tell you how much it will cost, he might not tell you how to reduce that cost in a way that is acceptable to you. While home builders have their upgrade packages, and you can always pick the cheapest one, there are definitely other ways to save if you are well informed.

### Calculating Home Building Costs: Estimating by Square Foot

Most shells cost about \$25 to \$35 per square foot, while the average cost per square foot for a finished home is between \$80 and \$130 per square foot depending on which state the home is built in. Homes cost less in the Southeast and Midwest, and more in the North East and on the West Coast. Construction in Hawaii is even more costly. For more information on construction costs per square foot, download our 98 page free book on home planning, and read our many articles on the topic.

### Calculating Home Building Costs: Estimating by Materials and Labor

One way to estimate is to figure out what the materials cost and then multiply by three, to allow for labor and the home builder’s profits and overhead. With most materials, labor is equal to the cost of materials. Significant exceptions are paint and carpet. Paint is significantly more expensive to have applied, than it is to purchase, while carpet often comes with free installation. These two are examples of extremes that compensate for each other. The overall cost of your home is one third materials, one third labor and one third to your homebuilder’s income and expense.

### Calculating Home Building Costs: Saving Money on Construction Costs

There are several ways to reduce the price of a new home. The most obvious, for those of you calculating the cost per square foot, is to build the home smaller. This works, but beware of oversimplifying the idea. The kitchen and bath are the two most expensive rooms of the house, because of cabinetry, plumbing fixtures, appliances, and the cost of hiring a plumber and electrician. While you will have electrical outlets all over your home, you will have more of them in the kitchen than any other room. These costs do not reduce, simply by reducing square footage.

Still a smaller home is obviously less expensive to build and even less expensive to heat cool and maintain. It’s not just the initial cost. Replacing the carpets will be cheaper, painting will cost less, replacing the roofing will cost less from now on, in addition to reducing utility costs significantly.

The way to reduce the cost of baths and kitchens involve cheaper fixtures, and lower priced countertops and cabinets. Reducing the number of cabinets could be another way to save, but you may regret the decision later. In general when reducing square footage, don’t scrimp on storage. Be sure to include cabinets, and closets. One way to save on buying expensive cabinetry though is to incorporate a small pantry closet with open shelves. This can be a much more efficient way to store your dry goods and snacks, while keeping your cabinets open for dishes and cookware. Inversely the pantry could also store seldom used specialty appliances. Having adequate storage space can save money over time, because you can stock up on sale items without crowding your kitchen.

Keeping your bathrooms and kitchen close together saves on plumbing, however it is important that your bathroom door does not open into the kitchen or dining room. The laundry area or room makes a nice buffer between the bath and kitchen, because it too needs to be near the rest of the plumbing. The hot water heater should be located near the bath and kitchen as well. Upstairs baths should be placed over the kitchen or downstairs bath for added savings. Keeping plumbing together, saves on pipes and pipefitting. It also makes plumbing repairs simpler.

An open floor plan with a great room can save money and space. It is much more efficient and economical to heat and cool as well. By combining the kitchen dining area and living area in the same room, you save significantly on square footage, and create a more versatile and comfortable home.

There are many ways to save on a new home, from doing some of the work yourself, to building a smaller home. By researching the amount each element costs, and considering which laborers charge more for their work, you can pinpoint many ways to save. Roughly calculating home building costs before visiting your builder can help you find ways to save.