Costs of Building a Home
Contractors and homeowners around the United States often use cost per square foot when assessing the expense of building a home. This method of measuring home building costs is ineffective because it does not account for custom changes to cookie-cutter designs. Every homeowner should look at the individual costs of building a new home rather than resorting to the cost-per-square-foot measurement. The essential elements of calculating the total sticker price for a home include material, labor and delivery costs.
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Material Costs
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Young couples and families building new homes learn quickly that material costs can make or break a construction project. Contractors and suppliers will try to upsell their clients on cabinetry, doors and furnishings that can increase home building costs by thousands of dollars. Homeowners should look carefully at the differences between similar materials when building a home. Laminate floor tiles and counters have advanced in recent years to resemble marble and granite at much lower costs per square foot. Another consideration when it comes to materials is taking on the costs of closet and cabinet systems upfront to avoid costly remodeling down the road.
Delivery Expenses
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Every door knob, door and drawer that is used in new home construction is delivered from an off-site supplier. Contractors incur delivery costs that are passed to their clients after homes are completed. These costs include the fuel used to deliver materials, the wages of the driver and delivery personnel and a small amount of markup to cover vehicle wear and tear. Homeowners should work with contractors who have connections to local and regional suppliers to keep delivery costs down.
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Labor
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A budget-conscious homeowner should understand that procuring inexpensive materials will not mean big savings due to labor costs. Building-Cost.net offers a full listing of labor costs for home building from Alaska to Florida to anticipate hourly wages. A single asbestos worker employed for a renovation project can earn $47.78 per hour due to the specialized nature of the work. Contractors who need a single laborer and a carpenter to finish a home will pay out $25.86 per hour to both workers. Homeowners should understand that labor costs change as excavators give way to carpenters, masons and plumbers who earn different wages.
Waste and Coverage Loss Costs
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Every plywood sheet, wooden board and PVC pipe that enters a construction site has to be cut down to fit specifications. Contractors charge their clients for the entirety of the materials used in home construction, which means higher costs to complete building projects. The waste or coverage loss cost for each product accounts for the amount of material cut down to size to meet blueprint dimensions. For example, a homebuilder may need 12 one-foot long boards rather than 10 boards to create a floor in a room that is 10 feet long. Waste and coverage loss costs also make up for materials that are damaged due to rain, snow and other conditions out of the builder's control.
Anticipating the Worst
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The Wall Street Journal advises homeowners to keep 20 percent of the overall building budget in reserve to account for construction problems. Homeowners should not take out loans and use all of their liquid assets to barely meet their financial obligations when building a home. While a majority of homebuilding projects are finished on time, contractors and subcontractors may be delayed by supply problems and weather. These overages need to be paid for by the homeowner, which can push off moving day for weeks or months without a decent cash reserve.
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Resources
- Photo Credit Photo by Jeremy Levine Design (Flickr)
