When assessing the overall cost to build a new home, it all comes down to the price you pay per square foot. Construction costs can be variable, and materials play a big part in these costs, but there is a good way to measure and estimate the cost of building a home per square foot to keep you on track and under budget.
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Review the plans for your home. Typical cost per square foot accounts only for liveable space; it does not account for such items as basements or garages, even though their costs will be factored in to the overall building cost of the home as well as your home loan.
Measure from one exterior wall to another. The construction cost accounts for all materials used from one exterior side of a room to another. Use this measurement when figuring construction costs for the most accurate estimate.
Overprotect your materials budget. When selecting such items as kitchen counter tops, cabinets and other items that add on to your construction costs, it's best to estimate the cost as being one or two product levels more expensive. Costs of materials are changing constantly, and overestimating can save you money on the overall cost and keep you within your target budget.
Create a spreadsheet that dictates the highest cost for each item. Do this for everything from drywall to brick and add up the projected cost for the home.
Create a separate spreadsheet that outlines the actual cost once each phase of construction is complete. If you've come in under budget so far, you might be able to splurge on some other items.
Get a price before starting each phase of construction. For example, prior to frame stage, get a price for all the lumber and compare that to the price that you projected and you will see an accurate estimate of the price per square foot to build the home.
Tips and warnings
- Prices fluctuate based on market conditions and product availability.
- Don't skimp on materials related to energy-saving features for your home.
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