Wednesday, April 28, 2010

Estimating The Building Cost Of A New Home

If you plan on building your own home, the first thing you should worry about is estimating the building cost.

No contractor can ever give an exact costing on a new home construction. In general, new homes tend to cost more than their budget after all is said and done.

But the trend of going over budget makes estimating building costs all the more important. So, how do you build an estimate on the costs of your dream home?

There are many things that factor into the cost of building your own home. Keep them in mind when you are faced with a new home construction:

1. Less Is More

In general, it costs more to build a small house than it is to build a bigger abode. This is because when you build a larger home, the cost is spread over the land area or the total square feet.

It also usually costs less to build a two-story home with the same area as a one-story house, precisely because a two-story house has a smaller foundation and roof. Plumbing and ventilation are also more compact in two-story houses.

2. Shape Affects Cost

Rectangular-shaped houses cost less to build, while more angles and corners in your home increases labor input and the materials needed for construction. Homes with dome-shaped roofs also tend to use materials efficiently and thus cost less.

3. The Bathroom, Among Others, Will Cost More

The most expensive areas to build in any home are the kitchen and the bathrooms. There are a host of other features that can affect your building costs.

If you are using other homes as benchmark for your estimated costs, be sure that the homes you are looking at have the same exact features as what you had in mind.

4. Land Affects Preparation Cost

Get to know the terrain of the land you are building on. Is it flat? Or will you need to fill it with dirt, move rocks or clear some trees? These factors can affect the cost of your site preparation and, in effect, the cost of building your home.

5. Inflation and Market Conditions Affects Cost

Inflation, aside from affecting your purchasing power, also increases your constructions costs by 3% to 6% annually. If you want to get a rough estimate of the cost of your dream home, try comparing prices with similar homes that are, at most, six months old.

If you want to draw up a specific estimated amount of the cost, meet with contractors that build similar houses. They can tell you how much they charge, but do not forget to ask what the exact inclusions in the price are. Some contractors will give you a list of the materials they use.

You can also take a look at new homes that look very similar to the house you want to build. Build rapport with the homeowner and ask for the price of the land and the cost of the home. Deduct the land price from the home price. Then divide the result by the square footage of the house. The result is the cost per square foot.

When you have calculated the per square foot cost, you may multiply it by the total square footage of your dream home to get an estimate of the total cost.

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