Tag: home cost

How much does a new home really cost?

Building a new home can be an appealing and exciting experience. Yet, if it is the first time, few people really know how much work is involved. Not to mention an accurate estimate of the cost. Variable costs that include architectural fees, permit fees, construction costs and the builder’s fee and land costs all need to be considered to formulate the final price tag and to protect your budget.

Before the first nail is driven, you will need to have a good set of architectural drawings. This usually involves hiring an architect or residential designer. The architect or designer will work with the customer to design the home, produce construction documents, aid and assist with product selection and sometimes manage or monitor the construction of the home. Typically, an architect will cost between $7,500 and $30,000. He or she may also charge a percentage of the construction costs or base their fees on a price per square foot. As an alternative, there are many quality pre-designed house plans available through various media outlets by very talented architects and designers.

Haddington House Plan

Land is another major cost consideration. As the population increases in major cities, so has the cost of building lots. In the U.S., a buildable lot averages $85,000.00. This number includes survey and financing costs.

Once the lot is secured, the homeowner needs to factor the builder’s fee. Typically, the builder will charge a 10% to 20 % fee. Though this fee might seem excessive, hiring a builder saves both time and money and minimizes waste. Builders can bring valuable expertise in land selection, preparation of your lot, the construction process, obtaining financing and appropriate material selection. They also bring much needed experience to navigating the complicated permitting and inspection process.

Next on the list, is materials. Steel prices have increased significantly over the past years: from May 2017 to December 2017, the global steel price has almost doubled. Future prices are predicted to continue growing, considering the recent 25% tariff imposed on steel imports. Costs like drywall average $11,000 while a typical roof goes for $10,000. Other hard material costs that effect framing, and flooring have become costly as well. The choice of exterior finishes such as brick, siding or stucco also have a major effect on the final home price. And let’s not forget about the cost of appliances, cabinets, countertops, windows, doors, interior trim and plumbing and lighting fixtures.

Sanders House Plan


With the recent uptick in the U.S. economy, new home building has increased and this has made labor harder to come by. Skilled labor is needed to prepare the lot for building, pouring foundations, framing, flooring, roofing, plumbing, electrical, HVAC, insulation, drywall, interior trim, painting, lighting, and much more. With demand for this skilled labor, up, so is the cost.

And before you put your pencil down, you’ll also need to figure in landscaping materials, outdoor structures like carports, sheds or barns, decks and porches, patios and the driveway. These and other exterior accessories can quickly add up and exceed your budget if not accounted for in the beginning.

Taking all this into account, the national average for the overall cost of a 2,000 square foot home is around $285,900.00. A typical low price will be approximately $74/square foot to a high price average of $360/square foot depending on location and materials used. Since building a new home may be the purchase of a lifetime, much preparation and planning should go into the cost considerations. Knowing all the variables up front will make the whole building process run more smoothly and successfully.

Checklist for First-Time Home Buyers


Preparing to purchase your first home is usually a thrilling experience. However, when looking at the process as a whole, it can seem a bit overwhelming. Taking it step by step makes the process much easier. A checklist for first time home buyers can help move from creating a sensible budget to finding a suitable home within that budget and finally, to signing the mortgage.

First Time Home Buyers Checklist


  • Know what you can afford and manage the budget.


Nothing is more important to the first time home buying process than accurately assessing how much home you can afford and calculate a mortgage that fits within your budget. A mortgage of not more than 2.5 times your household gross yearly income is a nice benchmark. Consider your financial scenario and factor in any of you and your partner’s current debt. 

Remember, owning a home is a commitment, and you must plan to live in it for about five years to receive the benefits of equity.


  • Control Credit/Debt


One of the most powerful ways to save cash on your mortgage and enhance your financial picture is an excellent credit score. It can take some time, so make refining credit your priority for you and your partner, if applicable.


Take note; you’re eligible for a free credit report once a year from all three credit bureaus. Make sure to check the reports for any faults and guarantee that all your bills are paid on time. New credit accounts can impact your score as well. Try not to open new lines immediately after applying for a mortgage.


  • Have Savings/Down Payment Money


Making a 20% down payment is a perfect way to receive initial equity in your home and prevent having to pay mortgage insurance. It’s not needed to qualify for a home loan, but will save you money in the long run. You can also find different local and state down payment assistance programs accessible to first-time homebuyers. Just keep in mind to borrow within your means.


  • Create/Fine Tune and Stick to A Budget


After you find the ideal home for your needs, it is time to get down to the business of making the purchase. Determine how much you’re willing to pay for the house, make a genuine offer and stick to your budget. Anticipate negotiation, but try to refrain from lowball bids which could risk frustrating the seller. If you prefer to make a bold statement of interest, you can consider an earnest money deposit along with the offer.


  • Get Pre-Approved, So You Know What Size/Price Home You Should Be Looking For


Mortgage preapprovals help you determine how much you can afford. It also puts you in a dominant negotiating position with a home seller. Preapproval is different from prequalification. Prequalification is only an estimate from the lender of how much they’d be willing to lend you depending on various factors. Sellers tend to prefer homebuyers who are preapproved. It makes the financing and closing procedure move more smoothly.

Buying your first home is a major life event for most. Careful preparation and a methodical approach is always the best course. It will make all the difference as you take that first walk across your very own threshold.