How Much Does It Cost to Build a House

Just how much does it cost to build a house?  As someone who has worked in the house construction industry for years I can say this is one of the most common questions asked by anyone that is remotely thinking of building a new house.

I have had two types of people ask me this question.  One person is the person who is thinking of getting a house built and wants to know the costs that are associated with building and if they can afford to more forward at this point.  The other person is the one that has had a house built by a builder but felt that the price ended up a lot higher than they originally thought.

The cost to build a house will vary greatly depending on what part of the world you are in and the economy at the time of building.  The other variables that change the cost to build a house will be if you are going to hire a custom home builder, a home builder, a general contractor or if you are going to build the house yourself and subcontract out the trades.

How Much Does It Cost To Build a House When Building a Custom Home?

A custom home is much different than if you are building a new house in a subdivision or something along those lines.  When you are building a custom home you are often dealing with a smaller builder that will be on the construction site most of the time himself (herself).

When dealing with a custom builder you will have to use an architect to create a set of plans for you prior to building the house.  Not just one set but in most cases you will need 8 or 9 sets.  The custom builders I have worked with have had their own architects and the cost of the drawings goes straight to the builder.  Then the builder adds that price to the total price, after marking it up.

The other trades will also cost you more money as well.  Since the builder does not normally build a 100 houses per year then they do not get the price breaks that a larger builder gets.  These prices will also get passed on to you.  Don’t be concerned, in most cases the prices are not much more from most of the trades.  Where the price does get higher with the trades is custom homes are harder to build than regular homes.

The reason a custom home is tougher to build is because there is more things that in the walls and ceiling spaces that are tougher to work around.  The home theater and sound systems take up more space.  The security systems, electrical systems and the plumbing is tougher to work with.  Instead of having a regular shower custom homes always have showers with body sprays and multiple heads which means piping has to be larger and takes longer to install.

On the flip side when you are building a custom home the cost per foot might be higher, but the tradesman are generally better craftsman that are proud of their trade.  This in turn gives you much better quality in your home and more value int for what you pay.

Since you are dealing with a custom builder they are very willing to make changes all the way along the construction process.  Just be aware that all of these changes will significantly increase the price of the house and the time to build the house.

How Much Does it Cost to Build a House With a regular Builder

A regular builder normally has a show home that you can see the type of work they do.  These builders are usually higher volume builders that will build houses in multiple price ranges depending on the subdivision you are building in.

All plans are already included in the price and only a few changes are allowed when you first make the deal with the builder.  Even these few changes will cost you quite a bit as this really slows down the construction process when compared with a person that makes no changes.

Once you sign the deal that should be the cost as you really won’t do anything now until the house is built.  Whenever I have been working on houses late into the evening I have seen homeowners pop in and take a look at what is going on.  Other than that though you really have no say in what is happening.  Unless you happen to come in and something looks totally wrong.  Feel free to contact the builder and discuss the situation.

Since these builders build a lot of homes the trades that work for them will cater to them and lower their prices slightly.  Not that those prices get passed onto you in all cases.  One small builder I was installing the plumbing for said he could no longer use the company that built rafters for the roof.  The reason for this is the company was no longer going to do any work for small builders.  This means a much higher cost and these people all know this.

How Much Does It Cost To Build a House with a General Contractor

If you are going to build a new house and use a general contractor than you can expect to be part of the building process if you so desire.  A general contractor won’t cost you as much as a regular builder and helps you out quite a bit compared to building the house yourself.

In most cases you can find general contractors that will want to get paid in one of two ways.  A straight hourly rate for every hour they work.  Or a 10 to 20 percent charge on everything that goes into the house.  This includes all material and costs that go to the trades.  Not a lot different than a builder but generally much more hands on.

Also when you are working with a general contractor if you want to put in sweat equity yourself you can do that.  Make sure your general contractor knows this prior to hiring someone.

How Much Does It Cost To Build a House Yourself?

Building a house yourself is the best way to save up to 30% or sometimes more.  Just imagine you build a house that would normally have cost $500,000 but your cost was only $350,000.  That is $150,000 in equity as soon as your house is built.

Sounds great doesn’t i, but before going ahead with this challenge you better have strong time management and able to handle high stress situations.  Not high stress for people in the construction world but if you have never done anything like this you will get stressed out.

Create a plan, and stick to that plan.  Every single change you make will coat you a lot of money and a lot of time.  Make too many changes and your 1 year time frame quickly turns into two years.  The carrying costs alone will quickly wipe out that 30% equity you were hoping to have at the end of the process.

Read as many books as you can about how to build houses, how to tile, how to develop a basement, how to install kitchen cabinets and everything else.  Just think about this for a second you are about to build a house yourself, does a couple of hundred dollars in books hurt your pocket book?  I am not saying you should buy these books to do the work yourself.  What I am saying is you need to familiarize yourself with the whole process as much as your can before you get started.

Even better would be to have your basement developed in the house you are in if that is possible.  At least you would get a taste for the process.

Once construction starts you need to control all of the situations that are going on at once.  If a trade does not show up that day you need to get on their butt to make sure progress continues.  If they tell you they cannot be there because another trade is not complete then you should only focus on what needs to be done.

Nothing bugged me more than a homeowner calling me to be at their house to do 2 hours worth of work when I could come in a couple of days later and put in a full days work.  Most trades will bid they jobs based on working full days, not coming here today and then tomorrow for a couple of hours each day.

Keep your stress levels lower by communicating well with your trades and everyone else that is part of the building process.