How Much Will My New Home Cost?
Part One of a Two-Part Blog Series "Taking the Mystery Out of Construction Budgets"
If you’re thinking about building a home, you’ve probably noticed that it’s virtually impossible to answer the question “how much will it cost?” Answers will be all over the map, if you get any at all. There are four main reasons why construction cost is so unpredictable and hard to nail down:
1. You want a price for something that doesn‘t exist
The first thing to understand on your journey is that your new home doesn’t exist yet. Without a good, detailed set of plans there is literally nothing to estimate. The accuracy of your budget has a direct relationship to the level of detail in your plans. Concept plans will give you a very rough, concept estimate. Plans that include engineering are more accurate, but a true full set of plans also includes details, specifications and interior design. Whatever is not found in your plans will remain an unknown; anything that is not addressed, as well as anything it affects, is a change order waiting to happen.
2. It takes a village
Making a building takes dozens, if not hundreds, of individual people all doing what they say they’re going to do, when they say they'll do it, and for the price they say they’ll do it for. Managing a design and construction project requires an advanced degree in cat herding. Some of those people are under the design team‘s, client’s or contractor’s contractual control, while others aren’t under anyone’s control at all. And of course we all know that contractual “control” doesn‘t always translate into actual control - people still work at their own pace, with their own schedules and workloads.
An accurate construction estimate requires everyone involved to spend a lot of time they're not getting paid for to prepare quotes. If construction is not imminent (meaning permit in hand) most contractors won't spend the time - especially if the plans are only conceptual.
3. There is no crystal ball
As your design progresses and your plans get more detailed, the time that passes means that no matter how accurate those initial estimates are, they are only relevant in the present moment. There is no crystal ball that can inform us of future economic conditions. There is only one thing that’s certain: costs go up a lot more often than they come down. It is not until you have a permit in hand, a signed contract and are ready to begin construction that you will finally know how much your new home will cost. Working with a team that can provide accurate, real-time estimates during design, even if they’re rough, will help to mitigate at least some of the unknowns.
4. Site matters
A building isn’t floating in space; it is intimately connected to its environment and the ground it’s on. The complexity of your property is a critical - if not determining - factor in the feasibility of your project. From the slab up, your home will cost the same whether your property is flat or steeply sloped. However, from the slab down, as well as everywhere outside of the structure, costs will vary with each individual site. Even a seemingly simple, flat site may have hidden issues beneath the surface, like rocks or bad soil, that could make or break your project.
Local regulations play an enormous role as well. There may be costly design review processes, required public improvements or sensitive habitat mitigation to consider. It is highly recommended to hire a professional architect to help you vet potential properties before putting in offers. Do not base your decision on what the realtor tells you. They are not design professionals, and do not have the expertise to properly evaluate these issues - besides the fact that their interests are not always your interests.