So, you have finally decided to build a house. Even now, you probably envision a stunning home that fits your style and personality well and can meet your needs and demands for the space. Now that you have started designing and building your own home, the million-dollar question is, where do you start?
Building a custom home from scratch all comes down to your budget. What your custom home will look like after it is done, from the layout, number of floors, and finishes, depends on how much you are willing to spend. Your budget can affect your decision on where you will build and what kind of land you can use. It will also determine how big your dream home can be and what materials you can use to make it. The budget will also tell you if you can add more features to the design or if you need to compromise and eliminate some.
Since money plays a significant role in your project, you need to set a budget as soon as possible so you can make intelligent choices during the design and building phases. Even though your budget can change depending on your style, neighborhood, and home’s features, planning for it makes talking about money much more accessible.
How To Come Up with a Budget for Building A Custom Home
As discussed earlier, setting a budget before starting your project can give you a clear idea of where to spend more or less money and help you avoid sticker shock when finding out how much your dream home will cost.
Review Your Current Financial Status
When starting your custom home-building project, you need to take the time to sit down and figure out what you want and how much you want to spend on it. Since everyone has a different idea of the perfect home, your budget will depend significantly on your tastes, where you live, and the property size. You have to make sure you can afford your project to reduce the risk of debt or bankruptcy.
Create a List of Your Needs and Wants For Your Custom Home
The next step in making a reasonable budget for your new home is to decide what kind of home you want.
Find out the “non-negotiables” and “nice-to-haves” for building your new home, such as:
- How many rooms and bathrooms do you want?
- How big do you want the house to be?
- Where do you want to put up a place?
- What is the design, layout, or finishes?
- What functions and features are most important to you and your family?
You can figure out why you need to build by thinking about how you live in your current home and what areas you want to update or improve. What do you like best about where you live now? What makes you go crazy? Is your current kitchen too small? Or do you need more storage to keep your things organized?
Making a list of wants and needs in order of importance is a good place to start. From there, custom home builders can give you a rough estimate of how much it will cost to build.
Consider All Possible Expenses
There are three main parts to the cost of a custom home: the land, the work on the site, and the house itself. However, when planning your budget, you should consider the worst-case scenario possible. This means that you should use the most expensive estimates you get for each line item when making your budget. It is better to account for any possible price increases or need for contingencies while helping you keep within your budget. You want your final cost to be less than what you planned so that you will have more money for maintenance expenses or home improvements.
Let us look at how much it costs to build a custom home.
Land Costs
First, you will need somewhere to build your home. A piece of land is the first thing you need to purchase. Land costs can change based on the neighborhood and other factors, like whether the lot faces a corner or a road. Have you thought about how your dream home would look and how big it would be? Or can you imagine living in a rural or busy town? What amenities are you looking for in your neighborhood?
Once you know where to build your dream home, research the market value and check if you can afford to pay for it. Choosing the right place to make your home is an integral part of the design and construction and will ensure that you will be satisfied once you move into your home.
Design and Plans Cost
Another significant factor is the cost of designing or creating plans for your custom home. Whether you work with a design-build firm, an architect, or a custom home builder, preparing the house and building construction drawings will cost you, and this cost will depend on who you work with and what you want.
The cost of design and plans will depend on your ideas and vision for your home. If you want a seamless design that fits your lot, your wants and needs, and your unique design tastes, it might be worth it to pay a little more for a firm that can provide a top-notch customized plan and ready-to-build construction drawings.
Construction Costs
Finally, we can talk about how much it takes to build your dream home. This makes up the most significant part of your budget, and it should cover everything needed to deliver the house, from laying the foundation to installing windows and the roof. As a result, you must ensure you have enough money in your budget for this project.
You can consult with your custom home building if you want sustainability and green features. While this may seem expensive initially, it can help you save money and make your home healthier and more comfortable in the long run.
Interior Design Costs
The cost of finishes, selections and appliances inside and outside your home is another thing you need to consider in your budget for building a house. Finishes and choices include everything from the cabinets you want in the kitchen to the bathtub in the main bathroom to the color of the siding on the outside of your house. These things make your new house feel like a finished home.
Setting a budget and making your choices as soon as possible is essential. Many finishes and options can take weeks or even months to ship, so builders prefer that you choose the pieces before they start building. The sooner you choose, the less you will spend and the faster you can finish creating your home.
Landscape Design Costs
Most contracts between builders and contractors include only a small amount of landscaping. Most of the time, grass seed or sod can be added. Still, you will need to work with a landscaping company to develop a plan for your lot if you want to plant near the foundation or do other specialized landscaping. This is an extra cost to think about when planning your budget for a custom home. However, it will significantly add value to your home in the long run.
Get a Loan Pre-Approval
Once you know what you want to build and have a rough idea of how much it will cost to design and develop, starting the construction loan process is a good idea. You will want to get pre-approved at this point, and this will help ensure you have enough money to build your desired house.
Consult with Your Custom Home Builder
After going through all the above costs, you should know how much you need to save for your new home and where your money is going. Consult with your custom home builder to determine your budget’s price range and evaluate your budget. They will help you add and take away line items as needed for your project so that your home dreams and your budget are in balance. If your initial budget shows that you need to cut costs, your custom builder will help you find a cheaper piece of land or change your design plans to make a more affordable custom home. No matter what your final budget looks like, your custom builder will stick to it, so you know that your new home will not cost more than you planned. As a result, you will surely get the best value for your hard-earned investment.
Key Takeaway
When you plan for your financial future, talking about money is much less scary. The critical step in creating a budget for your custom home is to divide your expenses into different categories. The quality of your design plans will dictate how your dream home will look like. Along with the conditions of the land where your home will be built, your designs, and your finishes, your custom home builder can help you create a budget that will deliver good value and quality. They can also show you where you should spend more or less money.
