Estimating Construction Costs

Meet with experienced home builder

Meet with an experienced builder who constructs houses that are similar in size, quality, and features to the home you want. Seasoned builder will tell you the estimated cost per square foot for similar home construction, which will give you a ballpark idea of how much your dream home might cost. Remember that estimates usually assume average material cost. Architectural details and higher quality materials can significantly increase the total home construction cost.

Count the square footage

Visit a recently built home that is similar in size, style, quality and features to the home you want. Take the price of the home, subtract the price of the land, and divide that amount by the square footage of the home. For example, if the home is selling for $500,000 and the land costs $200,000, the construction cost is $400,000. If this home has 2,000 square feet the cost per square foot is $150. Multiply per square foot cost by the finished square footage of your house to get a ballpark estimate.

Custom features cost more

The most expensive areas in a home are the kitchen and the bathrooms. The number of windows, their design, size and quality will also significantly affect the total cost. Vaulted ceilings and high roof pitches will increase the cost of a home, as will solid wood doors and floors. When using other homes to calculate an estimate, be sure the style and features of these homes are similar to the one you plan to build. The cost per square foot is often higher for a small home as compared to a larger home. When you build a larger home the cost of expensive items (such as kitchen, bathrooms, HVAC, etc.) is spread over a larger square footage. Consequently, a larger home may have a lower square footage cost than a smaller home. Also, it usually costs less to build a two-story home when compared to a one-story home with the same square footage. This is because a two-story home will have half size roof and foundation, and plumbing and ventilation in two story homes are more compact. Small details in the design of your home can make a big difference in the price. To save on costs, begin estimating construction expenses before you select your final blueprints. Here are important factors to consider:

  • Size of your home: When building a home, it’s best to work with even numbers. Have your home size rounded up or down to increments of two feet. This reduces wasted materials. Also, it’s most economical to build a home which is no deeper than 32 feet. If the depth exceeds 32 feet, then your roof trusses may need to be specially designed and will be more expensive.
  • Shape of your home: Homes that have a rectangular or box shape cost less to build. Having more angles and corners in the shape of your home can increase the amount of labor and materials needed to build a home. Dome shaped homes also make efficient use of materials and tend to cost less than other shapes.
  • Site Preparation: Preparing a site for construction can have a big impact on the cost of a home. Building on a flat lot will usually cost less. If you have to haul in lots of dirt, do a lot of grading, clear trees, or blast through large rocks, then site preparations can become more expensive.
  • Cost Overruns: Usually the finished cost of a home is more then the original bid price. Cost overruns occur from overspending the allowances, making changes, and encountering unforeseen problems. Proper planning can greatly reduce cost overruns. In general, it is a good idea to allow an additional 10% to cover unexpected costs
  • Inflation and Market Conditions: Usually the cost of building a home increases around 3% to 6% per year. If it will be several years before you begin construction, remember to include inflation into the cost estimate for your home. When using other homes to compare prices, try to use homes that have been built within the last six months.

 

 

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