Number One Question That I Can’t Answer (right away, at least)

Posted on December 29, 2010 Updated on July 15, 2011

How much would is cost for a 4 bedroom, 2.5 bathroom house?

Generally, per square foot, new home costs can range anywhere from around $80 to $200.

This is the MOST frequent question I get when it comes to building a new home, and unfortunately, it is the one question I simply cannot answer specifically – right away, that is.

There are so many variables, it is impossible for anyone to answer this question accurately without first asking several additional questions and gathering much more information.

There is one way I can provide a price right away. If the customer is considering a modular home and has already chosen a floor plan from the catalog, I can provide a very general budgetary number rather quickly.  That being said, there are a number of items NOT included in this very general budgetary number.

What’s NOT included?

– The lot/land

– Installation of Well or Septic, Water or Sewer, and associated Municipal and Tap Fees

– Percolation Tests

– Building and sediment control permits and fees

– Impact Fees

– Electrical and Hook up application fees (the cost of running the electricity from road to home)

– Shrubbery, drainpipes, sediment control systems

As you can probably imagine, the above items can add up to a very substantial amount of money depending on the site location and lot size.  It IS impossible to put even a budgetary number on the above items without having all site information.

So you really want to build your new home.  What are the first steps you need to take before even looking for a builder?

When you begin the process of building your new home, the VERY first thing you must do is determine your budget.  That magic number.   Furthermore, there is also an amount that you will have in mind that you actually WANT to spend.  For example, you maybe able to comfortably work with a budget of $250,000 but you would really rather only spend $225,000.

Second, you need to obtain a letter of pre-approval from your lender.   Generally, your budget will be determined by the bank.

Third, you must determine your “needs” for your new home.  How many bedrooms?  How many bathrooms?  Do need home where everything is on the first floor?  Closet space?

Forth, determine your “wants” for your new home.  How would you like the layout of the home?  Positioning of bedrooms and bathrooms?  What kind of countertops in the kitchen?  What types of flooring would you like?

Truthfully, the most realistic approach to determining how much your new home will cost is to simply work backwards. Start by determining how much you can afford to spend, then be realistic about the size of the house you need, and finally, decide what and where you can afford to build.