6 Simple Ways to Reduce the Cost of Building Your Custom Home

Building a new custom home is not cheap. The number one reason homes get insanely expensive and go over budget is poor planning from the get-go. If you want to build your new custom home better and save some money too, try to follow these 6 simple ways to reduce the cost of building your new custom home.

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1) Before you start, work with a Builder and a “Knowledgeable” Real Estate Agent to purchase your land.

This might not be so obvious. Along with design, your homesite will be the leading factor that drives the cost of your new home. Things to consider are the purchase price, zoning, topography, soils (clay vs sand vs rock), availability of utilities, tap fees, length of driveway, neighborhood comps and much more. Either work with a knowledgeable real estate agent that understands building costs, building departments, local utilities and/or partner with a Builder to help determine upfront costs.

2) Smaller Is Smarter

Really? Making a home smaller makes it less expensive? Yes, this might be obvious, but rarely do people follow this concept. We want all the bells and whistles in our new homes and typically design our homes to include them. Don’t be like the rest of us. From the start, you need to approach your home’s design based on your needs, not your wants. To reduce the cost of the home you need to remove and/or combine wasted and redundant spaces – why do you need a dining room and a dining nook AND six counter stools?

You need to carefully trim out the wasted, redundant, unused spaces and put the extra savings back into your pockets OR buy those nice countertops you deserve.

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3) Design Around Building Materials

Genius idea. Back in time, a really smart person figured out that if building materials were designed on a common module, 4’x 8’ and 2’ increments, there would not be as much waste. Sheets of drywall work great on an 8’ x 32’ wall and plywood works great on a 16’ x 32’ floor, but they don’t work so well when the measurement is 9.5’ x 23’. Wasted material!!

Start the design of your house on the established building material modules. Reduce your cash that is going into the dumpster and put it back in your pocket OR put it into the hardwood floors you want.

4) Build a Square

What do you mean? Build a Square? I don’t mean to really build a square, but look at your home as a box. Attractive homes are very often based on simple box forms, properly proportioned and detailed.

Try to remember way back to one of your first classes in geometry. A perfect square has the greatest area (floor space) with the shortest perimeter (wall length). How does this affect building your home? Let’s take for example two homes that are 400 Square Feet each. This first home has two perimeter walls of 20 lineal feet. The square footage of this home is 400 square feet (20x20). The perimeter wall on home one is 80 lineal feet (20+20+20+20). Now lets take a second 400 SF home that has one wall at 40 LF and one wall at 10 LF. The square footage of the homes are the same, 400 SF (40x10), however the exterior perimeter on home two is 100 LF (40+40+10+10), not 80 LF. We just increased the exterior wall cost by 25%, but kept the same square footage. Uh Oh. This is one reason it is difficult to price a home on based on square footage costs.

Keep the foundation simple and you’ll save a lot of money on the building materials. Look to the early 20th century suburbs, farmhouses and modern contemporary homes for inspiration and lessons on the elegant simplicity of the box. You’ll have a good looking home that you can be proud of.

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5) Design for the future

Spend more now and save more later? Design for low maintenance now and you will save money in the future. There are industries built around replacing windows, siding, roofing, painting, and flooring. Installing cheap products during construction will cost you a lot more in the future. Install the best quality components you can afford now. Do it right the first time.

Speaking of attractive, low maintenance, smaller homes - they typically sell quicker and for more money! You win two times!

6) Work with a Builder AND an Architect from the get-go.

Unfortunately, on-line house plans and plan books might be a good starting point, however, they will not get you to far in the game. You will need an architect or draftsperson to develop and finalize the plans for construction, engineering, and building permits. Also, most on-line house plans are not suited to your living needs AND they are more expensive to build. The number one way to save money is to work with a Builder AND an Architect from the get-go.

Although your Architect is great at design, your Builder understands the costs and complexity of the build. Allow these two to work on your behalf as a team. A bad or uneducated design can cost you tens of thousands of dollars during construction. You can hire the architect first or your builder first. Either way, make sure they work together to reduce construction costs without sacrificing your overall vision.


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