10 Ways to Keep the Cost of a Custom Home Build Within Your Budget
- Choose a home builder who really listens.
- Think practically about the land you build on.
- Have patience when developing custom floor plans.
- Keep shapes simple.
- Think lifestyle, not square footage.
- Decide what you can do yourself (and what you shouldn’t).
- Divide shopping duties with your home builder.
- Consider using recycled materials.
- Sell the old place without a real estate agent … or with a really good one.
- Work energy efficiency tax credits into your calculations.
Remember how Tom Hanks looked in The Money Pit every time he heard or said those words? Like he was going to explode. Or cry. Or both.
A bottomless pit of time and money is everyone’s greatest fear when thinking about the cost of a custom build for their new home.
Sure, that was a renovation. But it doesn’t matter much. It’s the idea of being at the mercy of a home builder that has no respect for your budget – and who makes empty promises – that’s terrifying.
You and your home builder should be partners on your custom build project, working together to get the job done on time and on budget. Here are X ways to accomplish just that.
1. Choose a home builder who really listens.
A contractor who tells you what you want instead of hearing what you want is going to be trouble. You might be tempted to think you should do what they tell you because they’re the expert.
But that’s not expertise talking. Sometimes it’s greed, sometimes it’s incompetence.
Tell your home builder about the limits of your budget and how important it is to you to stay within it. A good contractor will let you know what’s realistic but won’t try to push you on doing more than you can.
2. Think practically about the land you build on.
It’s a great idea to talk to a home builder before you buy land. You’ll want to have a good idea what it’s going to take to put a home there.
Consider South Carolina’s Lowcountry, our neck of the woods. Do you want to build in the woods of Okatie? There’s likely significant tree-clearing work ahead. Or the marshes of Hilton Head Island? We may need to budget in soil amendment to fortify the earth.
The most practical – and economical – land to build on is going to require the least work to break into or prepare, and will have ready access to utilities.
3. Have patience when developing custom floor plans.
Architectural design is almost never one-and-done. It’s a process. Plan to go through several revisions before you get it just right.
The alternative is to rush into building and make adjustments as you go. That approach is far more costly. Better to erase and redraw a line than to knock down and rebuild a wall.
4. Keep shapes simple.
A custom home build should ultimately produce the home of your dreams. That dream may involve some creative shaping, such as curved walls or triangular rooms.
But if you’re intent on containing your custom home build cost, you need to put reasonable limit on these creative touches. Complex shapes are more time-consuming to execute properly. Our budget-conscious clients stick with mostly square and rectangular designs.
That doesn’t mean you can’t be creative in other ways, of course. Interior décor has every bit as much impact on the home experience.
5. Think lifestyle, not square footage.
A 1,000-sq.-ft. house built around its owners’ lifestyle will always be superior to a 10,000-sq.-ft. house built just for more floor space.
Work with your home builder to determine how much living space supports your desired lifestyle. How many occupants in the future? How often will you entertain guests? Do you enjoy taking long baths or would you prefer to shower quickly and get it over with?
Then determine how much storage, mechanical, appliance and insulation space you need. You might be surprised when you add it up. Your optimal square footage might be far less than you thought it would be … or more. The point is that you’re buying just the space you need.
6. Decide what you can do yourself (and what you shouldn’t).
Be careful with this one. There are often hidden costs associated with DIY.
You may decide to install your own plumbing fixtures, for example. That might be all right if you have some experience with plumbing. A common mistake is overtightening nuts with tools that ought to be tightened only by hand. The resulting leak could do serious damage to your new cabinets.
Then again, maybe you’ve put in a bunch of faucets and showerheads before, and doing that yourself is a no-brainer. The trick is to think: What’s the worst that can happen? If it does, do I want someone licensed, bonded and insured to be responsible?
7. Divide shopping duties with your home builder.
A major factor in figuring out the cost of your custom home build is allowances. These are like mini-budgets your home builder helps you put together for specific items, like door knobs or cabinets.
Custom home builders shop for stuff like this all the time. We take the headache out of the process for our clients and often get builder discounts.
But it sometimes our clients want to do their own shopping for items, and sometimes it is more cost-effective. Especially when you’re not so much “shopping” as “sourcing” items, say from Grandpa’s shed.
8. Consider using recycled materials.
Recycled steel, concrete, and asphalt shingles are just a few examples of commonly recycled materials that could reduce building cost. It’s one way your contractor can help keep the build under budget.
You might also save money by using salvaged building parts. This is even more appealing when it matches your aesthetic tastes. Some people like retro fixtures, old bricks, outdated moldings, etc.
Of course, you have to consider the cost in either time or money of restoring antique material.
9. Sell the old place without a real estate agent … or with a really good one.
For Sale By Owner isn’t for everyone, but there are some instances in which it might make sense. You might have a family member who wants to buy your house and is able to wait until your custom home build is done. Or maybe you’re an attorney with some experience with real estate contracts.
Whatever the scenario, the point is that paying a real estate agent commission on the sale of your former home is a related cost. Or put another way, look at however you can increase your profits on the sale of your former home as a related cost reduction.
For most sellers, finding a really good agent that will fetch you a great price is the best way to generate more cash to fund your custom home build.
10. Work energy efficiency tax credits into your calculations.
Another related cost reduction will come around next April when you file your taxes. There are federal tax credits for energy sources (and state credits in South Carolina). Work with your home builder to install these or to prep the home for install of systems such as solar panels and geothermal heat pumps.
All of this is subject to change from year-to-year, of course. Make sure to discuss tax credits with your certified tax professional before you figure them into your custom home build cost.
HOW ELSE CAN I REDUCE MY CUSTOM HOME BUILD COST?
The above list is only a start. Here at ALS Construction, we daily engage in the challenge of producing quality work within a reasonable timeframe and within your budget.
And we never promise it’ll only be “two weeks.” (Unless we really think so!)
Every build is unique. So is every client. We’re always coming up with new ways to keep the budget under control for people just like you who are ready to make their dream home a reality.
Ready to start dreaming up your new custom home? Contact us today to get started!