Cost To Build A Home UnveiledIf you are entertaining the topic of construction of a new home or personal residence, then you will need to consider all of the different aspects associated with the cost to build a home. Once you have come up with a formula to assess these costs, you will have the basic information that you’ll need to proceed with the design process.
This is assuming of course that the cost to build a home once broken down to a cost per square foot will fit into your design size requirements. Coming up with your personal cost to build a home and design formula can be a little complex. Within the next few paragraphs we will make an effort to cover and hopefully clarify the primary aspects which will help you bring together the construction information you’ll need to determine the cost to build a home.
Elements Which Often Determine the Expense to Build a Home
There are a number of aspects that need to be taken into consideration when determining the actual list of construction topics you need to include in your details to estimate a cost per square foot to build in your area. That is going to be our ultimate target, determining an average construction cost per square foot to build in your market. One of the first major considerations will be the land that you will acquire to build on.
How Location Affects the Expense to Build a Home
The reason this can be such a big factor is because when determining the cost to build a home the location will affect such things as site development cost as well as the actual part of the total budget that this purchase utilizes. To clarify this point, if you purchase property in an established development you may not have extra site development cost but you may be required to build to certain covenants which will affect the cost to build a home. On the other hand you might buy undeveloped land at a more reasonable price with no covenant limitations but have to factor in development costs like a septic system or other utility work.
How Local Labor Affects the Expense to Build a Home
The cost to build a home can also be greatly affected by the local construction labor costs as well as cost of the construction materials available in your market. It has been my experience and this information is corroborated by several market research surveys that the average cost to build a home in the United States today will average between 90 and 200 US dollars per square foot. This number is a broad averaging and can cover single level homes with a foundation or unfinished basement. So let’s say you where planning the construction of a 2000 square foot home and you wanted to estimate your cost to build a home. You
could quickly plan on an average of between 180,000 to 400,000 US dollars to build.
How Multiple Levels Affects Expenses to Build a Home
It has been my experience that while this average is accurate for a single level home, if you build with a basement and choose to finish some of that space you will not use the same cost per square foot for that finished space. The same is true of a two story design. The reason for this is because you already have the construction expense of the basement walls and the roof factored into the main floor cost. So the basement finish will only involve the added materials and labor to finish that existing space. The second floor area will cost somewhere between the cost of main floor finish and basement finish as it will add an additional floor system and associated framing.
Local Market Cost to Build a Home
My recommendation when trying to determine the cost to build a home in your market is to contact a couple of local real estate professionals and investigate the size and selling price of recently built new homes that are similar in construction to your home plans. Once you ascertain and deduct the raw land cost those homes you will be able to divide the net price of the home by the square footage and establish a good average square foot cost to build a home in your market area.
You can establish a similar construction square footage cost to build a home by meeting and talking with a couple of reputable local builders and asking the same questions about a couple of their recent projects. In my opinion the advantage of talking to the builder is that once you share some input on your tastes and preferences they may be able to give you even more accurate pricing estimates.
The Cost to Build a Home Yourself
Once armed with this information you will have an idea of the cost if you have someone else build for you, but what if you plan to build your own home? In my particular trade area we provide what is referred to as a building package. This typically includes all the wood products, windows, siding products, roofing products, insulation, drywall, interior mill-work, and cabinetry. The average costs will run between 30 and 70 US dollars per square foot. The key here is that this package will consistently average out at about 1/3 of the total cost to build a home.
The second 1/3 of the total cost is usually attributed to mechanical trades, concrete work, and finish products like flooring. The key here is that the remaining 1/3 of the total cost will typically fall into the area of construction labor. Now this includes all the labor involved and of course you will probably not be able whether by virtue of code requirements, experience, or equipment availability to perform 100% of the labor on your new home.
So the goal here is to research which parts of the labor you will be able to perform legally and solicit local estimates for the labor you are not qualified to perform.
Your Square footage Determines the Cost to Building a Home
Armed with all of this information you should be able to establish a good average cost to build based on a price per square foot. Once you have this number or range then you will be able to take your construction building budget, deduct 10% because I guarantee you will have overruns, and divide the net number by your cost per square foot. This will give you an approximate square foot number to target your plan design size to. Remember that during the design process for every square foot you go over this size limit you will need to add the appropriate amount back into your budget.
Use this calculator to estimate the Cost to Build a Home in your local area