How to Calculate the Costs of Building a House


Building your own house, especially when it’s your first one, can be an exciting and life-changing experience. However, before you delve into the building process, it is very important to thoroughly assess the overall expense of your homebuilding project. Safeguard yourself from those unexpected and unforeseen expenses that can pop up at any time during construction by investigating the current construction market rates and calculating the true costs of building your home.

Things You'll Need

  • Home plans
  • Calculator
  • Materials list
  • Building cost guide

Preconstruction Costs

  • Estimate your initial preconstruction costs. Include the expense of buying the land along with any associated realtor fees. Home plans may be purchased through a vendor, or you can hire an architect locally. Add in an allowance in case on-site adjustments need to be made to ensure the plans conform to local code.

  • Add site preparation costs. Permits will need to be purchased. Include the clearing and grading of the land, street infrastructure or accessing, and temporary driveways. Also include utilities services for power, water and sewer.

  • Include costs for personal and site insurance to protect against loss, damage and injury. There will also be bank fees, loan and interest fees, and upfront taxes that may be applicable. Your financial lender or broker can help you assess these costs.

Construction Costs

  • Estimate your structural material costs. This may include things like concrete, block, lumber, plywood, windows, doors, roofing, siding, brick, insulation, drywall, etc. Material lists may be supplied with the home plan; if not, ask for one. Check costs for materials by visiting a local home improvement center or builder supply for more accurate pricing.

  • Add in costs for supervision or general contractor services, licensed trades (HVAC, plumbers, electricians, etc.) and specialty trades (carpenters, painters, framers, masons, etc.). It is usually easier to assess these kinds of costs by obtaining bids from local firms. Building cost guides may also be helpful; look for them at a library or bookstore.

  • Incorporate additional estimates for wall and interior finishes, appliances, and fixtures. Carpeting, cabinetry, woodwork, flooring, refrigerators, stoves, fans, lights, fireplaces, and alarm and sound systems should all be included. Don't forget exterior items such as lighting, sprinkler systems, powered garage doors, decks and porches, etc.

Post-construction Costs

  • Set an allowance for post-construction cleanup and landscaping. There may be special dump or disposal fees; check local ordinances. Visit a nearby greenhouse or garden supply to discuss inexpensive landscaping options and to find installers. Also account for finishing driveways, and installing sidewalks and pathways.

  • Allow for additional expenses such as closing costs, and bank and finance charges. Don't forget lawyer and legal fees. Also include any accrued interest that may be owed for credit extended on materials, appliances and fixtures.

  • Assess the long-term expense of your home building project. This may encompass costs such as ongoing house payments, fixed or variable interest rates, homeowner insurance, property taxes, regular upkeep and maintenance.

Tips & Warnings

  • Allow a 10 percent to 20 percent overage for unforeseen expenses.
  • Do not budget materials too tightly--anticipate waste.
  • If this is your first time, allow one to two years for the self-homebuilding process.
  • Do not build a home without proper licenses and permits.
  • Abide by all safety practices on the worksite.
  • Always hire insured workers and crews.

Related Searches


  • Estimating Home Building Costs; W.P. Jackson; Craftsman Book Company; 2008; 304 pp.; ISBN: 9781572182059
  • The Complete Guide to Contracting Your Home; Dave McGuerty; Popular Woodworking Books; 1997; 320 pp.; ISBN: 9781558704657
  • NAHB: Building, Buying & Owning a Home
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