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How to budget for a new home build

Not sure how much it's all going to cost or where to get started? Read on for my tips!



Early on in the home building due diligence phase, I became frustrated when I would ask a builder how much designing and constructing a home would cost. They would always respond to me with "it all depends." It turns out, they were kinda right. By putting in a little work, it is possible to budget and figure out how much that pinterest worthy house is going to cost you.


Follow the three steps below to get you to your magic number:


Step 1:

  • Talk with an experienced builder and ask for a breakdown of costs of a prior house that they have build and you have seen. Note: The home should be close in scale and scope to the home you are looking to build.

  • Ask the builder for general allowances for the following:

    • cabinetry

    • tile material

    • hardwood floors

    • appliances

    • hardware

    • finish plumbing

    • countertops

This will be your finish allowance. The rest of the costs are relatively fixed (pending any lumber surges). You have the most control over these costs. Builders like to talk in cost per square foot in terms of the cost to build. Typically this can range from around $200/sq ft to $500 and up for high-end luxury finishes. Figuring out where you want to be in terms of level of finishes will help you determine your overall finish budget.


Step 2:

Add 5-10% to those allowances; Not for price increases, but trust me on this, everything ends up becoming an upgrade. Once you find yourself in this process, suddenly the pricier white mortar to go with more expensive white brick you pick becomes a must have. It all adds up!


Step 3:

Price out as much as you can.


Find "your person" or expert in each field that can help; i.e. my person at the tile shop calculated the amount of tile I needed and I was able to make selections and gather costs from there.


Bonus tip: get 2-3 quotes for things like appliances, floors, etc. Costs can vary widely. Trust the experts in your field for recommendations. For example, my cabinet contact was able to refer me to a great appliance salesperson which in turn, got me the best pricing on appliances.


Conclusion:

Finishes are what you have the most control over in the building process. I'm happy to report I stayed incredibly close, if not under on our finish budget (there may or may not have been inflation involved on my part 😊 (refer back to step 2).


Do you need help generating or tracking your finish budget? I can help! Reach out via my contact form.




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