Posted by Melissa Lynn Galland on Jan 9, 2017 9:54:18 AM
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Not surprisingly, one of the most common questions people ask when considering building a custom home is, How much does it cost? The answer, of course: It depends. There are so many factors that go into calculating the cost of building a custom home that it can be difficult to predict the total price until the project is finished. However, by understanding all of the associated costs, and by working with an experienced builder, you are better able to predict the total price tag and ensure that you stay within your budget.

Design Features

The cost of a new home depends heavily on the design. Some of the design factors that go into calculating the cost of building a custom home are: 

  • Total square footage of the home
  • Number of levels
  • Number of rooms
  • Room types
  • Building materials and construction method
  • Finishes and fixtures


Fortunately, a good builder will be able to design to your budget. You can start with a custom floor plan that fits your budget range and decide how you want to spend your money within those parameters. For example, you might decide that upgrading cabinets is a worthwhile investment or that an additional bathroom sink is not a priority. By working closely with an experienced professional, you have the freedom to tweak your new home to match your personal preferences.

Location, Location, Location

It is important to remember that the exact same home will have different costs depending on the location. Some of the site-specific factors to consider are:

  • The cost of land in various neighborhoods
  • The local cost of materials and labor
  • Site conditions and the cost to prepare the land
  • Local permitting fees

A builder that has experience in your area will be able to provide realistic estimates because it knows what materials and labor typically cost locally. Although the cost of materials fluctuates regularly, many builders will provide a quote that is good for a specific period of time, giving you a certain degree of predictability. You can also do the research to estimate permitting fees based on the local requirements and the type of site development that will be necessary on your lot.

Financing Is Not Free

Unless you are paying cash, you should include the cost of financing in the total project budget. This might include:

  • Loan fees
  • Title fees
  • Funding an escrow account
  • Inspections
  • Appraisals
  • Interest
  • A down payment

If you choose to secure builder financing rather than going through a local bank, the costs are much more predictable, so you can determine them in advance and factor them into your total project budget. 

You’ll Be Charged for Changes

It’s common for new homeowners to want to make changes to the design once the building process has already started. Although many builders can accommodate such changes, they typically come with extra costs. A builder will provide a change order that outlines the additional costs so you know what to expect, but don’t be surprised if small changes add up. There are costs associated with updated drawings, extra materials, and the time required to incorporate your changes. 

Factor in Other Expenses

When you start the process of building a new home, don’t forget to think about all of the other expenses you’ll have to deal with along the way. During the building process, this might include rent and other living expenses during the time it takes for the project to be completed. If you had to sell another house to help finance the new build, you’ll have to live somewhere in the meantime, which can impact your overall budget. When the house is complete, you’ll have moving expenses, landscaping costs, and possibly new furnishings to buy for your new home. 

Ways to Save

No matter how big or small your budget is, you probably want to get the most value for your money. One of the ways to do this is to perform as much work as possible on your own. Of course, professional builders must do the majority of the construction, but you can reduce your costs by managing the site-development work, securing permits, painting, landscaping, and taking on as many other tasks as you can.


Adair Homes relies on decades of experience to help you accurately determine the total cost of building a custom home that matches both your vision and your budget. Our team of professionals will work with you to customize a floor plan and select finishes that fit your lifestyle while staying within the financial range you have specified. If you’re interested in building a new home but are not sure how to determine the total cost, schedule a free consultation with one of our Home Ownership Counselors to learn more. Contact us today to get started!

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