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Many people searching for their dream home are coming to the conclusion that to have exactly what they need and want, they may have to build it themselves. Others may have purchased or inherited property without preexisting structures and want to make that their new homestead. Among the first questions prospective homeowners ask themselves is, how much will it cost to build a house? The answer is often more complicated than they initially believe, in part because of all that goes into home-building and the different choices they can make along the way. However, homeowners report the average cost to build a new house comes in at $305, 372, which would put a 2, 000 square foot home costing about $150 per square foot. This will obviously vary greatly with all the costly variables involved, so the cost could range between $178, 010 and $466, 493.

Custom Home Building

Custom home construction is often the first building option that comes to mind. With its advantages, including unlimited control and customization, the appeal is obvious. Unfortunately, custom builds are often more expensive and may take longer in terms of overall planning, design and construction time. The services of a residential architect can be quite costly, ranging between 5 percent and 15 percent of construction costs for a new home. Not all custom homes are designed by an architect. Custom home design companies may create custom home plans as well. Their costs typically range from $1.50 per square foot to more than $2.50 per square foot for the total project and home size. For smaller homes, this may be a budget-friendly option. However, for larger homes, this can be a substantial budget item.

Modular Homes

Another option is the construction of a modular home. These have come a long way in recent years, offering homeowners much potential for customization and an enormous variety of floor plans and optional features. Modular homes are also available in any size from cottages to palatial luxury homes, ranging in pricing from about $50, 000 to more than $300, 000. Many people choose modular homes because they generally cost 10 percent to 20 percent less in terms of overall cost than custom builds. Much of this comes from reduced labor requirements and negotiated prices the manufacture receives from their suppliers and business partners. This is also why additional customization can be expensive.

Working with Home Builders or Developers

Houses built by development companies generally involve choosing and modifying plans that the builder/developer already possesses. The amount of customization is considerable, depending on the potential homeowner's budget. The savings over a custom home are in the neighborhood of 15 percent. In some cases, this can be on par with modular homes, but seldom very much less than that option. Another option in this category is to work with a company that has a development in progress, purchasing one of their properties during or prior to construction. This can increase savings, although the amount of changes made must be minimal to take full advantage of the price.

Major Steps in Process

  • Budget: From the beginning, homeowners should know how much they can spend. This will serve as a limiting factor for size, build type, interior features and customization. At the start of the project, it will not be possible to itemize, but that should come later.
  • Purchase Property: May people begin the process with property on which to build a home. Otherwise, purchasing land will be an integral early step. Choosing the best possible location is crucial because it is one of the few things about the home that cannot readily be changed later.
  • Choose Construction Method: When deciding between custom, modular or developer and builder construction projects, budget will play a role in this decision. Multiple estimates are recommended, especially for those who are uncertain what type they would prefer. For modular homes, this can often be done online.
  • Plans/Design: Many people neglect to take this into account in budgeting. Plans for building a home and designs are not cheap. For those building a larger or high-end home, the planning stage can be especially expensive. However, this is the part of the process where dreams begin to become reality, allowing people to view their future home in drawings and sketches for the first time.
  • Permits and Inspection: This portion may be better handled by permit services or general contractors and builders, as they are aware of what it takes to build a home. Permits are a complicated and time-consuming part of building a home. Inspections can be nerve-rattling for those unaccustomed to them. The home will generally receive several inspections throughout the building process, helping to prevent costly errors later in the life of the home.
  • Construction Insurance: Prior to groundbreaking, purchasing construction insurance is a good idea to protect the investment.
  • Begin Construction: Construction includes a vast number of steps that range from site preparation to rough plumbing, electrical and roofing tasks. The construction stage will likely involve scores of professionals, each adding their own expertise from building houses previously.
  • Final Inspection: This step is a last examination of the home to determine that it matches the submitted plans and that construction is up to local building codes. The inspection is necessary to receive permission to occupy the home.
  • Landscaping: After the home is complete, the yard will be landscaped to add to the beauty and appeal of the home. This can include putting down sod, planting trees and shrubs and even adding decorative walkways and other elements. Some of this process may depend on seasonal factors.

Factors that Affect Cost

Numerous factors influence the final cost of the home. Many of them involve customization while others are expenditures more closely related to the basic construction costs.

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