What is the most cost-effective way to build a house?

Prefabricated or Modular Homes This method reduces construction time and labor costs, making it cost-effective. Prefab homes cost between $50 and $160 per square foot, significantly less than traditional stick-built homes.

What is the cheapest style house to build?

A ranch-style house is generally more affordable to build because it has an easy, open floor plan and is traditionally available in a rectangular or U-shaped layout.

What is the most expensive thing when building a house?

A home's framing is its skeleton. Because so much material and skilled labor is required, this is an incredibly expensive part of building a home.

What is a realistic budget for building a house?

The average cost to build a house in California is $360,000 to $1,500,000 , not including the cost of land or site prep. New home construction costs in California range from $200 to $600 per square foot, depending on the location, house size and design, and the materials, finishes, and fixtures you choose.

What is the cheapest option to build a house?

The cheapest way to build a home is to design a simple floor plan . Sticking to a square or rectangular floor plan makes the building and design more straightforward. Plus, building up is generally cheaper than building a sprawling one-story home.

What is the cheapest type of house to buy?

Prefabricated homes, container homes, and monolithic dome homes are just some of the most affordable new homes. Keep in mind that you'll need to add additional costs for land purchase, a foundation, taxes, transportation, and permits. Of course, you could always save and buy an existing fixer-upper home as well.

What is the most efficient house floor plan?

Simple, straight lines are not only pleasing to look at, but they are also incredibly cost-effective. Keep roof lines simple and side and rear walls straight for an elegantly modern exterior with great curb appeal. Opting for a cozy floor plan with a modern footprint is a great way to keep your home cost-efficient.

What style home is most expensive to build?

Beach Houses and Mediterranean-style homes are the most expensive in the U.S. and are often found on prime land close to the ocean. Large windows and balconies accentuate the use of natural light, which adds a feeling of luxury and simplicity to a home.

What if you run out of money while building a house?

The most obvious solution is to look for additional funding options . For a reliable property owner with good credit, it may be as simple as applying for additional financing. In some cases, like a lost grant, it may be much more difficult. The right option depends heavily on the type of project and its scope.

What to do when your builder goes over budget?

Ask the contractor to explain why the price rose so dramatically from the initial estimate . He will likely say something about unexpectedly high expensive labor and materials. Request an itemized bill or invoice, explaining that you do not feel comfortable remitting any payment until you can further examine this issue.

8 Ways to Stay on Budget when Building a House (2024)

Podcast

8 Ways to Stay on Budget when Building a House

Published on:

10/25/23

written by:

Carrie Barker

Going significantly over budget is one of the top concerns (actually, THE top concern) I hear from my clients and readers who are preparing to build a house. I completely understand this because it was also my biggest fear when I was building. However, what if I told you there ARE ways to stay on budget when building a house?

It’s true.

My husband and I built our custom home without going over budget.

And I know that what we did can work for you, too.

In this episode, I’ll share eight ways we managed to keep our home-build budget in check.

Be sure to keep these tips in mind (and implement them) as you build your dream home so that when you move into your brand new home (yay!), you feel great about the final cost of your house :).

Listen onAPPLEorSPOTIFY

Welcome back to the Before You Build Podcast! I’m your host, Carrie Barker (a.k.a. Caroline on Design), and today, in episode 50, I’m sharing eight ways to stay on budget when building your house.

My husband and I followed everything on this list when we built our custom home.

8 WAYS TO STAY ON BUDGET WHEN BUILDING

Again, these are eight things that I followed when I built a custom home, and I stayed within my budget.

Be sure to implement these yourself so that you, too, stay on (or close to) budget when building your house.

1. IF YOUR BUDGET IS TIGHT, LET YOUR TOP PRIORITY BE YOUR GUIDE

If your budget is tight, splurge on aspects of your future home that are most important to YOU.

In other words, your must-haves should guide where you splurge with your budget.

When we built our house, I wanted a finished basem*nt (like RIGHT AWAY), but I had to wait a couple of years to finish it because custom trim work throughout our house was a higher priority for me.

I couldn’t afford all of the trim work plus the basem*nt at the time of building, so I invested in my top priority, custom details.

Here’s another example …

If you have a large family and need more square footage, focus your budget on the size of your home rather than the level of finishes (i.e. opt for stock cabinets, laminate counters, inexpensive carpet, low-end appliances, etc.).

You can always upgrade finishes in the future … but it’s much harder and more costly to add square footage after your build.

On the flip side, if you’re more interested in custom details in your home (e.g. window seats, crown molding, high-end appliances, custom cabinets, etc.), focus your budget on your finishes and custom details over your square footage.

2. IF YOU GO OVER BUDGET IN ONE AREA, GO UNDER IN ANOTHER AREA

This might be obvious, but just in case you didn’t think of it yet, I wanted to share this tip :).

Unfortunately, it can be difficult to stay on budget because allowances (e.g. appliances or light fixtures) tend to be very low (ridiculously low).

Our appliance allowance was so low that it didn’t cover all our appliances.

Soooo …. needless to say, we went over budget on appliances.

However, we offset going over our appliance budget by choosing more basic (yet still custom) cabinets and drawers in our kids’ bathrooms.

I would have loved fancy five-panel drawers and cabinets for my daughters, but we needed to save money, so we opted for basic flat drawers in our secondary bathrooms.

If you’re creeping over budget in one area, find another area (that isn’t as important to you) to cut costs.

3. BE REALISTIC ABOUT (ALL) COSTS YOU WILL INCUR

It’s important to be realistic about ALL the costs involved during the building (and moving-in) process.

You’ll have construction costs, land costs, and builder/architect fees … but you also need to factor in many other expenses.

These expenses include legal fees, permit fees, financing costs, moving fees, and the fun stuff … window coverings, furniture, home decor, and landscaping.

It’s important to keep ALL of these costs in mind when you’re creating your REALISTIC budget.

8 Ways to Stay on Budget when Building a House (1)

4. BE HONEST (with yourself AND your builder) ABOUT THE FINISHES YOU WANT

Almost everyone says, ‘You’ll go over budget when building a house.’

They state this as if it is a fact.

It’s not a fact.

And it’s not inevitable you’ll go over budget when building a house.

My home build experience is proof of this.

I stayed VERY close to budget because I was honest and clear with my builder about the caliber of finishes I wanted BEFORE he priced our custom home.

If you are 100% honest and upfront with your builder about EXACTLY what you want BEFORE they give you a quote for your house, then they can give you an accurate quote.

You need to be VERY clear about the level of finishes you want (e.g. custom trim work throughout your home).

If you want high-end Subzero appliances, for example, ensure your builder adds a realistic (and high!) appliance allowance to your bid.

The people who tell you they went significantly over budget on their house likely had many change orders and ‘upgraded’ their home WHILE they were building.

You have a much better chance of sticking to budget if you’re honest with yourself and your builder about how nice of a home you want BEFORE you break ground.

builder about how nice of a home you want BEFORE you break ground.

Wanna know how I built my dream home within budget and without sacrificing my must-haves? It’s all in my FREE on-demand training, ‘3 Simple Steps to Build a House You Absolutely Love (without blowing your budget)’.

5. CHOOSE AS MANY FINISHES AS POSSIBLE BEFORE CONSTRUCTION STARTS

I recommend choosing as many design fixtures/finishes as possible BEFORE construction starts.

I recommend this because when you do this, you are purchasing the building materials at the price quoted at the BEGINNING of construction.

During my home build, we paid the price we were quoted for materials regardless of any price increases during the build.

We were required to pay higher than the quoted price only if we made a change order and chose a different (more expensive) product.

Some builders will have you (the consumer) absorb material price increases during construction.

Example … if you are quoted $3 per square foot for a particular wood flooring product, and the product cost jumps to $5 per square foot, some builders will have you pay the increase. This is more common post-pandemic.

Boom … you just went over budget.

So choose (and order) as many finishes and fixtures as possible before the price has a chance to increase.

6. AVOID THE ‘IT’S ONLY $200, SO WE MIGHT AS WELL UPGRADE’ TRAP

We all do this!

It’s only $200 more to upgrade this or that … so we might as well upgrade.

Believe me … these small upgrade costs ADD UP quickly when you do this multiple times!

If a finish or fixture is really important to you, then go for it and upgrade to what you want.

However, if a finish or fixture isn’t that important, stick to your allotted allowance if possible.

7. ALLOW SOME ‘WIGGLE ROOM’ IN YOUR BUDGET FOR AN UNFORESEEN SPLURGE

Allow some wiggle room in the budget for a splurge you don’t even know you’ll want until you build.

You will learn about many gorgeous products while you’re building your home.

There will be an area where you find something so beautiful that you just have to splurge (e.g. a fancy imported tile for your backsplash).

Allow room for this.

Remember that you can shift your budget a little bit (see #2 above).

For example, if you choose a ‘splurge’ wood flooring product, counteract this with inexpensive carpet in the kids’ bedrooms (they’ll never know the difference).

8. DO YOUR RESEARCH WHEN IT COMES TO SELECTING A BUILDER

Do your research on builders in your area.

Get references.

Pay attention to which builders consistently have clients go over budget.

I received two bids for my home build … both with the same specs (extensive trim work, etc).

One bid came in higher than the other.

Guess which builder I went with?

The one with the higher bid.

Surprised?!

I did this because I knew his figures and costs were REALISTIC.

The other builder’s pricing wasn’t realistic.

Of course, it would have been great to go with the lower bid IF it was accurate, but I would have gone over budget once we got into the construction process because the quoted prices were unrealistic.

If the quote seems too good to be true, it probably isn’t realistic.

NEXT STEPS

All right, there you have it.

Eight ways to help you stay on budget when building a house.

As I mentioned earlier, blowing the budget is the top fear I hear from my clients and readers who are planning to build a house.

I assume one of your top goals is to stay as close to budget as possible.

And you have the power to do this.

You don’t have control over everything, but you DO have control over many aspects of your home build and the cost of your house.

It IS possible to build your dream house close to budget.

And now you are armed with eight ways YOU can stay on budget when building your house.

Wanna dive deeper and learn the exact step-by-step process I walk my clients through (to equip them to build a house they love, without blowing their budget)? Grab a (virtual) seat in my free, on-demand training: ‘3 Simple Steps to Build a House You Absolutely Love (without blowing your budget)’.