Are you wondering about the cost to build a spec home?
Building a spec or speculative home can be an thrilling journey.
Yet it is often littered with questions confusion and speculation about the expenses involved.
For most people the budget and understanding the financial nuances involved is a significant challenge.
So what exactly does it take financially to create a spec home?
As daunting as it sounds is this one hurdle too big to overcome?
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Average Cost To Build Spec Home
The average cost to build a spec home can range widely depending on multiple factors like location size and design. According to data from HomeAdvisor the cost can vary between $100 to $200 per square foot.
The U.S. Census Bureau provides a more specific average noting the median sales price for new single-family homes to be around $175000.
For a prospective spec home builder considering a 1700 square foot Cape-style house with medium-cost interior and exterior finishes the cost could fall within this average range. Comparatively remodeling an existing home could yield varying cost estimates but the appeal of a fresh personalized design from a spec home brings a noteworthy appeal.
Cost Breakdown For Spec Home Construction
Breaking down construction costs into specific categories can provide a more detailed understanding of where expenses lie. An efficient division of the construction budget incorporates materials labor and administrative costs.
- Materials: The combination of materials selected for the new house is about 42-51% of the total build cost.
- Labor: Hiring a team of construction workers the labor cost constitutes approximately 39% of the total cost.
- Administrative Items: Building permits professional fees and the general contractor’s fee which ranges from 10% to 20% are other crucial areas of expense.
Additional cost factors that can further affect the cost per square foot to build a house include the intricacy of the house plans pre-construction constituents and the amount of luxuries or high-end finishes required.
Estimating Spec Home Building Costs
Estimating the cost to build a spec home can be daunting. The $175000 asking price for the home may not reflect all costs.
According to HomeAdvisor the construction cost for building a new house varies from $117971 to $450345 with an average of $284158. One significant cost variable depends on the home’s size.
The cost per square foot typically ranges from $100 to $155 making the cost for a 1700 sq. ft. house fall between $170000 and $263500.
Other factors that affect the cost include the number of bedrooms the number of levels and the home’s location. A 2 3 or 4 bedroom house may cost between $93000 and $465000.
If designing a custom home costs could skyrocket to $200 to $550 per square foot. Cooperating with a developer might save you as much as 15% compared to a custom home builder.
The house’s exterior finishes might be around $35000. If the desire is to create a specific type of home such as a pole barn house or a shipping container home costs can go as high as $120000 and between $60000 to $90000 respectively.
Considerations For Building A Spec Home
When starting the construction process pre-construction considerations can make up about 10 percent to 25 percent of the total project cost. A crucial step in this process is obtaining house plans which typically fall between $2000 and $8000.
Afterward securing the building permits is necessary with prices averaging from $1200 to $2000. Another consideration is hiring a general contractor who usually charges between 10 percent to 20 percent of the total construction cost.
Lastly the cost of the land also factors into the overall budget. Land prices can range from $5000 to $2000000+.
Therefore selecting the right plot can make a huge difference on the bottom line. Bear in mind that designing your house down to the last detail and studying the home building process can help in reducing these costs.
Moreover planning ahead and accurately calculating these factors will ensure a smooth building process and a successful sale.
Spec Home Construction Faqs
Building spec houses involves distinct elements such as choosing the size number of bedrooms and additional features that will appeal to prospective buyers. The cost to build a new home varies with an average range between $117971 to $450345.
House plans typically cost between $2000 and $8000 and building permits average $1200 to $2000.
The cost per square foot to build a house ranges from $100 to $155 and a whole 1700 sq. ft. Cape style house like what you’re considering could cost around $170000-$267350 excluding the cost for a garage and medium-cost interior/exterior finishes.
Additionally the cost to build a 2 3 or 4 bedroom house can range from $93000 to $465000. The cost to build a custom home can start from $200 to $550 per square foot.
You may find that working with a developer can be more affordable as these costs can be about 15% less than working with a custom home builder.
Labor Expenses are another factor to take into account with home building cost. On average labor cost to build a home makes up 39% of the total build cost.
Besides preparing the lot and landscaping can cost between $3000 to $16000.
The cost to build a small house or tiny house can range from $25000 to $70000 which could potentially be a cheap home building option per square foot. For instance a pole barn house could cost between $30 to $45 per square foot to build.
When building spec houses remember that customization options and the cost of the land can significantly impact the total cost. The land cost can range anywhere from $5000 to over $2000000.
Therefore creating a budget for the total project cost is essential. Also it’s generally recommended to consult your builder for a cost-to-build estimate to get a more accurate idea of potential expenses.