Building the house of your dreams (and within your budget).
Overview
You have decided to build a new custom home. Now, how do you create a realistic custom home budget that will help to you to get from where you are, to where you want to be? Keep in mind that no one should expect to know all the in’s and out’s of a building project without putting in some time and effort.
Additionally, costs can and do vary, and although you may end up with a good estimate, you will need to be somewhat flexible and add in buffers for the unexpected. You can begin though, with some rough estimates.
One great way to find out what things cost is to drive around and look at recently built homes. Picks ones that are close to the size and style of your custom home. See what the asking price for the newly constructed homes (and the price of the land itself). Then you can subtract the cost of the land and get a rough idea of what to expect.
Create a Custom Home Budget
You do not have to be completely alone in this process. A good builder, for instance, should be able to help you avoid common pitfalls. You can also talk to your mortgage lender, do some online research or invest in a book about the process. For example, Amazon.com offers “Building a Custom Home for Dummies.” It is available in both electronic and print formats for a nominal price.
Budget Calculator
There are other helpful tools out there, and many are free. For example, you can find a budget calculator at http://www.building-cost.net/ to help you crunch the numbers. You might also want to check with family or friends who have been through the process themselves.
Essentials of a Custom Home Budget
First, you will need to choose a location for your custom built home. This is also an instance where taking your time really pays off in the end. You will need to add in the cost of the land (as well as any additional work such as clearing it). You are going to have two main cost categories: “hard” and “soft” costs. Your hard costs would be made up of the cost of the land, the materials and the cost of labor. The soft costs would be all the other costs, including “hidden” costs such as additional fees and other, indirect costs.
Moving, Landscaping, Lighting and More
Remember to allocate a sufficient amount of money for things that many people forget to include such as the cost of moving, how much you want to spend on landscaping and any additional fees or costs such as building permits, inspection fees, development fees and costs associated with closing.
What is Important to You?
After you have read a few books (or done some online research) and gotten a good feel for things, you are going to need to decide which things are must haves and which things are optional. For instance, can you live with one less bathroom if it allows you to put in a patio? Your answers will be determined by your family size, lifestyle, tastes and needs.
You Can Have the Home of Your Dreams
Building a custom home can be a wonderful experience if you are prepared to put in a little legwork and think about what you really need and want. Again, that is where a good contractor can truly shine. If they have been around the block a time or two, they can advise you about what to expect.
It is always better to be prepared than to go broke because you did not think things through. A good home builder or general contractor can make the process so much easier and enjoyable by assisting with many of your concerns to insure that no areas are over looked.
Image credit for How to Create a Realistic Custom Home Budget: Tax Credits
