How Much it Costs to Build a New Home

March 20, 2020 | Starr Tingle

Starr tells how much it costs to build a new home
 

If you have questions about how much it costs to build a new home, you are in the right place! My name is Starr Tingle, and I have been a home builder and remodeler for over 20 years. Earlier this week, I was knee-deep in numbers while working on several estimates and bids. So, I asked on my Sanctuary Homes Facebook Page if anyone was interested in a bathroom or kitchen remodel cost. I received a private message and was asked for more information on a new home build. The message reads: 

“Hello! I’d love information to help me understand what we can afford. We want to go ahead and buy our land, then build on it in a year or two after the land is paid off. I’ve started looking at floor plans and layouts, but ultimately struggle to understand what is within the budget we have set. 

Q: Is there a general price to keep in mind for square footage, or does it always vary? 

A: My bidding indicates that $175 – $195 per heated square foot is reasonable at this point in time and in this area (Shelbyville, Kentucky) 

Q: How much of an added cost is in a basement? 

A: A basement, based on the average home for this area will cost at least $30,000 above the cost of the crawl space home. Adding a basement affects the foundation wall cost. It also increases the cost of the lumber package, framing labor, HVAC, electric, or plumbing (if you want a future bath or bar). If it is a walkout, you’ll have the cost to add windows, a door, patio, a patio, etc. 

Q: Is it more cost-efficient to build a ranch with more square footage, or to build a two-story home? 

A: It is unquestionably more cost-efficient to build a two-story home. Let me use a 2,400 square foot home as an example. Putting 1,200 on the first floor and 1,200 on the second floor. In this scenario, your foundation and roof are only 1/2 the size of a 2,400 square foot ranch. 

Q: What are the first few steps in determining build options with a budget in mind? 

A: If you know that you don’t want the price of your home to exceed a specific dollar amount, here is the advice I have on how to calculate: 

Free Resource

The second step would be to list everything you want in the home. These are commonly called the specifications. You should organize them by grouping like with like. For example, for fireplace, you may list wood burning, blower, gas started, and two-sided. This can be a bit overwhelming, so to help you out, I made a list of the items in a home for you to refer to. 

 

 

Formula

Take your budget and divide it by $185 ($185 is in the middle of the range of $175 – $195). The result is the approximate size (in heated square footage) of ranch home on an unfinished basement in your budget. 

Preapproval

The third step should be to get pre-approved for your permanent mortgage. I’ve written two blog posts about it, part one and part two. Take a look, because the information there is so, so useful!

Research

The fourth step, once you know your budget and the amount of money you can borrow line up, is to start researching your specifications. Using the fireplace example, use the internet to do some research and go to location fireplace stores to see what’s available and get pricing. I feel like this is the only way you can truly be in control of what goes into your home.

Find Your Builder

Your next step will be to decide on a general contractor. I’ve got a couple of resources for you on my blog: 21 Questions to Ask Your Home Builder and Should You Tell Your Builder Your Real Budget.

I’m committed to educating homeowners on the process of building a new home – and understanding how much it costs to build a new home is a huge part of the process! – because it can be a deeply rewarding, fun experience – if it is handled correctly. If not, well, you’ve heard the nightmares!!

If you found value in the information I’ve given here, please consider signing up for my email, so you don’t miss future information. Be sure to like us on Facebook @Sanctuary Homes. Chow for now!