If given the choice, many people would rather build their dream home than buy one. Most don’t, however, because they think it will be far too expensive. But how much does it really cost to build a house? According to nationally acclaimed homebuilder and author Carl Heldmann, contractors assume a cost of $89 to $160 per square foot – and that doesn’t include the cost of the land or the construction loan.
Heldmann says that the total cost you’ll pay to build a home is 25 percent material, 25 percent labor, 25 percent land cost, 12.5 percent builder profit, and 12.5 percent builder overhead. That means when building a home, 75 percent of what you’ll pay goes to the contractors. According to the Department of Housing and Urban Development, the average cost to build a house is $360,900, which averages out to about $136 per square foot total once the land price is also figured in.
What Options Are There?
There are several ways to get a home built. Many builders have standard floor plans, so you can go through their designs and choose which one most appeals to you. Within the basic floor plans, you generally have additional options available; do you want a walk-in shower in your guest bathroom, or just a half-bath? In your kitchen, you might decide you want a center island – with electrical outlets. Heated floors, vaulted ceilings, bay windows, and other little additions can increase the overall cost significantly as well.
If you have your heart set on a truly custom home, stylized specifically for you and your family, you can expect to pay up to 30 percent more than if you went with a customized production home. In addition, you’ll need to hire a licensed architect to design it – which can get expensive quickly.
Building the Foundation
The cost of your home’s foundation will vary greatly, and is dependent on several factors you’ll need to decide before breaking ground. The biggest decision will be whether you’ll be building a basement, crawl space, or simply using a concrete slab as your foundation.
Each type of foundation has its own benefits and disadvantages, and there’s no hard-and-fast rule for everyone. What you’ll need depends on everything from the terrain you’re building on, to the seasonal weather. Local pests such as termites or ants will also play a role in what type of foundation you need.
According to SFGate.com, a slab foundation is the cheapest, and consists of exactly what it sounds like – a cast-concrete slab. The slab sits on a gravel base so that during wet weather any excess moisture can drain out instead of pooling around the home or eroding the soil near it.
For a standard slab on a 1600-1,800 sq. ft. home, you can expect to pay anywhere between $7,000 and $16,000 in the San Francisco Bay area, depending on options and individual contractors. Fixr.com says the national average for a 1,000 sq. ft. foundation can cost between $5,000 and $8,000 for a slab with no footings, which breaks down to about $5-$8 per square foot.
If you want more than a slab – maybe a crawl space or even a full basement – expect those costs to add up. You could also incur additional costs if the space needs to be cleared or leveled before building.
Building the House Itself
According to Andy Stauffer, owner and president of Stauffer and Sons Construction, about two-thirds of your total cost goes to the shell of the house – walls, windows, doors, and roof – and the interior finishes, such as floors, cabinets, and countertops. Kitchens and bathrooms are the most expensive rooms, since they require the most integral furnishings. In fact, the average cost for cabinets and countertops alone is over $16,000, so keep that in mind when planning your number of bathrooms or the layout of your kitchen.
The quality of materials plays a big role in your total cost as well. Some granite countertops, for instance, can run up to $500 per foot on the high end, while other materials can be merely a few dollars per foot. Chances are that if you don’t have a truly unlimited budget, you’ll need to do some prioritizing. If the high-end kitchen countertops are non-negotiable, then you’ll probably need to forego something else in the house, such as a third bathroom. That balancing act is something you’ll work out with the contractor.
Estimating the Costs
The contractor’s main job is to provide an accurate plan for how much your chosen home design will cost. While many estimator sites offer a ballpark figure, that’s all the number will be – a general estimate that doesn’t take into account the many hidden costs that can pop up.
Your contractor will use exact market costs for the materials you want, figure the labor rates in for his builders, and be able to offer you a much more accurate picture of exactly how much your build will cost. There’s only one problem with that – the aforementioned hidden costs.
These are the things that pop up during the build you might not have planned for or even expected to have to pay. They’re the Murphy’s Law of home building, and they can appear anywhere.
During excavation and leveling of the site, for instance, the contractor may find large boulders that need to be moved, or bad soil that won’t support a foundation. You might go to purchase your dream countertop material only to find it’s sold out and you need to choose something else. You’ll also need to pay for utility hookups and a driveway.
Contractors can sometimes include costs in the contract that you never thought of, such as portable toilets for the construction crew, trash removal, or even renting a fence during construction to keep out potential thieves, looters, and vandals. You’ll want to read every word of the contract – including the fine print – before signing it, and ensure you understand exactly what you’re paying for. Don’t be afraid to negotiate some of those hidden costs before signing the deal.
Building a house doesn’t have to be a nightmare. Researching and shopping for the best value in contractors and materials, and having a solid plan that takes hidden costs into account will help you make the best choices and be prepared for anything that crops up. Your dream home can be within reach – as long as you plan for success and understand the average cost to build a house.