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sraymer33

Budget?: First Time Home Builders

9 years ago

My husband and I have never built from scratch before, but we have found a spot where we would like to buy land. Because this whole process is new to us, we have no idea how to budget. Our total budget for everything is 400K- 450K, and we would be building in a master planned acreage community in south eastern Tennessee. Our needs are unique in that we need a 3 bed/2 bath home, which also has two home offices, as we both work from home. And we would like to keep it under 2500 sq ft. We are unsure how much we should spend on the land, and how much we should reserve for the home building process (what sorts of 'surprise' expenses can arise). This is really vague, I know, but if anyone can point me to some good articles on this, or let me know if it's even possible to build a 2000 - 2500 sq foot home on an acre or so within our budget, I would truly appreciate it.

Comments (10)

  • 9 years ago

    That is helpful, thanks. I guess I'm wondering, if the price builders quote you is all inclusive, or if things like pouring a driveway, dropping a septic tank/propane tank (this is a rural property), are extra above and beyond that, or if that is unique for each builder.

  • 9 years ago
    last modified: 9 years ago

    I've always understood land costs should represent about 20-30% of the total cost. At least that was the case in the 2 areas we built. This will vary based on location and land costs in the area. Call a couple of local Realtors and ask the question.

    In response to your second question--yes, what is included in a price will vary based on the builder.

    This article, a couple of years old, also might be a starting point. https://www.nahbclassic.org/generic.aspx?genericContentID=248306

  • 9 years ago

    Thank you.

  • 9 years ago
    last modified: 9 years ago

    Know what you need. Where are the utilities? Where is the water? Well, septic, road, bringing electric in from the main road, clearing trees. Where we are (PNW) this alone can cost 50k. No matter what size house you build. Add 5k for permits. Design fees? Topographical survey? You haven't nailed one board yet and you're at 80-100k.

    Note PNW is high cost of living. So it's area dependent. But you get the idea. Just need to be aware of all the aspects of building. Not just framing the house and finishing parts.


  • PRO
    9 years ago

    Hi Sraymer - congratulations on your soon to be new home !

    You can easily get three bedrooms and two flex rooms for offices in a 2500 square foot home - you may need to get creative but it's definitely possible.

    How many builders are in the community ? Have you looked at their floor plans ? You'll need to make sure some of them offer a 2500 square foot plan. Can you bring your own builder into the community ?

    If you have access to the County Auditors website in your area you can search properties in the community and look at the selling prices and square footage to get an idea of pricing. Otherwise listings of homes for sale in the area should be helpful.

    Christopher - Columbus Custom Design

  • PRO
    9 years ago

    You could read these articles, or go to a beach to try to find a two inch diameter rock with a smiley face on it.

    https://www.houzz.com/ideabooks/query/hiring-architect

  • PRO
    9 years ago

    Hi,

    Your question relates to budget. The best way to answer it is for you to tour homes in your area that are similar to what you have in mind and ask the builder(s) what the cost would be to replicate the home on whatever lot and in whatever community you have in mind. Then add the cost of the land. Once you've confirmed that your budget is realistic for what you have in mind, you can decide whether to replicate a builder's model home or purchase a stock plan from a plan service or to hire a home designer/architect/design-build firm to design a home for you. To hire anyone to design a home without answering the basic "is my budget realistic?" question risks spending money on a design that won't get built. Order of operations!

    Best wishes for a successful project.

  • 9 years ago
    last modified: 9 years ago

    Add 50% to the cost of a local home that you would actually buy. That's your starting point for true custom. Plus the land and development costs. You pay a premium for personalization above a cookie cutter subdivision of the same tract houses again and again.

    If you want value in new construction, a tract builder subdivision is the way to go. They have an economy of scale, and the uniformity of the community endures a relatively stable appraisal. Of course, many people would rather be skinned alive than than live in Suburbia with a capital S.

    You have to evaluation whether or not the aspect of a 90% personalized home is worth the added expenditure of custom building. Because your budget is going to be very very tight for your expressed wants in something custom.

  • 9 years ago

    You say 'planned community'. Are there restrictions?

    Is this within a municipality? What are the building codes? Do they have FAR codes? (Floor Area Ratio to Land) What's the tax structure? What services are available?

    Think about the market value of what you build. How long will you live in this house? What could you buy in existing RE for the same amount?