Do you plan to build your custom dream home? Want to know how to calculate the cost of a custom home and how to budget for one? In this guide, we’ll give you an in-depth look into custom home costs.
Last year, a lot of people began appreciating the advantages of owning a home. When the pandemic hit, the homeownership rate increased. In the fourth quarter of 2020, the homeownership rate rose to 65.8% in the US.
Buying a home is great, but building a custom home is even better. You get to decide its layout, rooms, and the flow in the house. However, a custom home built is costly and needs better budget preparation.
What does it cost to build a custom home? Below, we’ll talk more about the things you need to consider before you decide that you want to build a custom home.
1. What to Include in the Computation of Custom Home Costs
How much does it cost to build a custom home from scratch?
When you build a house from scratch, you need to consider everything that goes into the work of building it. You have to prepare and plan for the first steps in building a custom home, like how big the lot and house will be. You also have to include the overall budget with the costs for the interior and exterior.
The elements that you need to consider when you build a home include:
- Site work
- Exterior finishes
- Major systems rough-ins
- Interior finishes
- Contractor fees
- General conditions
In the US, the median house price rose to $295,300 in June 2020. This applies to the existing house price to all home types. Judging by the price of the total project cost, you can save more or less, depending on your house design.
2. Site Work
Before any construction or work can begin, the builders need to prepare the land first. They will check and make sure that the land is ready and stable enough to hold a building. Otherwise, you risk erosion and other long-term issues that may occur.
The costs you can expect from this stage will include:
- Water tap fee
- Electrical temp pole
- Sewer fee
- Engineering consultants
- Erosion control
The inspections for water and sewers are likely to be the most costly. This stage also includes getting the necessary permits for your home. Building permits may follow in the steepest fees, costing around $16,000 for site work alone.
As a tip, make sure your builder and architect develop the plan together. This way, the practical worker and artistic thinker can create a balanced, efficient, and aesthetic home.
Once your plot of land is ready for construction, it’s time for the foundation work to begin. This is when excavation will occur, and your land will get evened out. Afterward, the builders will lay down the foundation of your house.
The cost of the foundation can go up to $25,000, depending on your land. The specialty equipment, material, and labor add to the final foundation costs. You may even pay more if they find large rocks beneath your plot of land or if your site is on a hill.
When your foundation is ready, it’s time to build the frame of the house. The cost of building the skeleton of your custom home can cost you around $41,000. At this stage, you’ll start seeing where your budget is going.
The house framing can be quite costly if you want a frame that is stable and durable. You’ll need to invest in high-quality materials such as lumber and steel. Make sure you ask about any additional and hidden costs, like the roof support and trusses.
5. Exterior Finishes
The estimated cost for this stage can go up to $33,000. The most you’ll spend on is the exterior wall, which will use up a lot of material. Additional costs also include the quality and durability of the structure and roof.
A benefit of building your own home is that you decide where you want your openings, like doors and windows. Consider choosing the best spots with the most natural light to place the openings.
If you want to learn about the other advantages of a custom home, check out our guide here.
6. Major Systems Rough-in
In the total cost of custom home building, the major systems and exterior finishes will not change much in the costs. A house’s major systems include plumbing, HVAC, and electricity.
If you’re low on budget, you can cut down your finances for major systems. Keep in mind that these costs don’t include the sink, toilets, and lights yet. These elements are part of the interior finishes.
7. Interior Finishes
One of the largest custom home costs is the interior finish. Depending on the look you’re going for and the type of appliances and furniture you want, it can cost you more than $68,000. The installation of cabinets and countertops alone can cost you up to $12,000.
Your appliances, such as your microwave, refrigerator, and dishwashers, can cost $4,000. Let’s not forget about the plumbing, lighting fixtures, doors, trims, and mirrors. If you have an extra $2,000, you can opt for a fireplace.
It helps if you know how to budget for a custom home. You can settle for a simple interior finish if you don’t have a big budget. However, you’ll be spending most of your time inside, so it’s best to build a comfortable interior finish.
8. Contractor Fees and General Conditions
The general conditions cost can take up 7% of your budget. The costs in general conditions include:
- General labor
- Trash pickup
- Duct cleaning
- Site cleanup
- Utilities for construction
- Miscellaneous fees and assessments
Contractor fees take 10% of the total cost of your home build. The contractor will manage everything related to building the house. They have the role of overseeing the site work, foundation work, up to the interior finishes.
Calculate the Price of Your Custom Home
Now, you know what costs to consider when building a custom home. Are you ready to pay for these custom home costs? Take your time adjusting your budgets and home appearance.
If you have any queries about custom homes and related topics, feel free to visit our contact page.