When you start thinking about building a home in NJ, you may hear an old wives’ tale about setting aside 10% of the price for upgrades and change orders. Although having a little extra on top of your estimate isn’t a bad idea, this myth hides a lot of problems with the design process. You don’t have to worry as much about the hidden costs of building a home when you hire a builder who will help you do the work in advance. Here are a few things to keep in mind.
How Do You Calculate Cost to Build a House?
When you ask a builder for an estimate of custom home cost, you might get a long list of items along with a total. The more specific your builder can be about the costs for each aspect of the home, the more likely you are to get a final number that fits what you expected at the beginning of constructions
Allowances are common, but setting aside 10% of the cost for them doesn’t always make sense. On a $750,000 home, that’s $75,000. And if a builder hasn’t done the legwork, there’s a possibility you might end up spending even more. Here are a few reasons we at GTG Builders prefer our unique custom home building process.
Understanding the 10% Myth
Although custom homes are built with your needs in mind, there might be a lot of features and finishes that you need to choose from throughout the process. The 10% recommendation is designed to provide coverage for choices that run more expensive than the builder’s standard, for things like flooring, plumbing, siding, electrical and more. But it doesn’t work out well in too many cases, which is why we don’t employ it for our custom home projects in New Jersey.
Simply put, the 10% myth is a failure of design. A builder might use it as a way to bypass some of the time-consuming aspects of the design, even to save you the hassle. But it’s better to get it right from the beginning.
Don’t Skimp on the Design Process
The design process needs to be detailed because building a house from the ground up is complicated. You’ve got architecture, engineering, permitting, land purchases, and more. There are a lot of interactions needed to get it done. If you hire a builder you can trust, they will do a lot of the heavy lifting.
Of course, then impatience to begin starts to take over. Everyone, from the builder to the client, is almost dying to break ground. If you can’t control that impulse, your design won’t be as complete, which means your custom home pricing won’t be as accurate.
What Are the Additional Costs When Building a House?
The focus here is the small things that get forgotten when building a house, like the flooring, fixtures, or countertops. These aspects might be the first things you think of when you start looking for land for sale in NJ. But if a builder doesn’t take advantage of your interest in providing choices early, you’re going to end up with a lot of blank lines that make new construction costs harder to estimate.
How to Estimate Costs
When we meet with a client to discuss an estimate, we provide a statement of work. Download our free custom home guide to learn more. A statement of work is a detailed document explaining what’s included in the contract. It has allowances for things like plumbing or the kitchen. There’s room to discuss the details for fireplace finishes, hardwood flooring, and more. Sometimes, clients are too excited to sign so they can get going. But if you want the most accurate information, you should talk about it now.
Why You Should Select Options Early
The best way to avoid vague custom home prices is to get those specifications in writing as soon as possible, depending on your time and patience. Love an 11-inch width for hardwood boards? Let your builder know. That’s a price we can estimate. Got detailed preferences on tile? Please, take the time. We’re happy to have our client selections manager come in to help you pick out the finishes, even if you think you might change your mind. There’s a lot less guesswork this way.
Looking to avoid custom home trends that are becoming outdated? We’ve got tips.
What Is the Most Expensive Part of Building a Custom Home?
If you think about it, the most expensive part of building a home is the prices that you don’t know about until the end. But with the right approach, you can avoid most of it. Build a relationship with a custom home builder who’s willing to put in the legwork before the project starts. It’s all right to feel impatient about the process, as long as you’re giving enough time for a good result.
How Much Does It Cost to Build a Custom Home?
The cost to build a custom home ranges from about $200 to $500 per square foot, which is why you should start by hiring an expert builder. At GTG Builders, we believe it’s most important to give you all the information you need to make an educated decision. Contact us to learn more about our custom home prices or to tell us about your project ideas.