Designing Your Home to a Budget

What is your budget for your custom home?
When you answer this question what do you include?  Each stage of your project typically has its own price tag.  Stages include: the purchase of your land, improvements to the land (i.e. septic, roads, utilities), the design process, materials, construction, finishes and landscaping. Although you can attach a price to each stage, don’t get caught without a complete understanding of your total cost and a how each piece fits into that cost.

Land Purchase and Improvements
In almost any project, the cost of your land (and any site improvements that need to be made) is separate from everything else that will go into the production of your home. Unless you are getting your land and your home from a development, your custom home builder will not factor the cost of the land into any bids they provide.  Knowing that cost is separate, many ask the question “Should I buy my land before or after I have a design?.”  There are certainly advantages to buying land ahead of time, for instance, you can pay for the land and use that equity to help finance your building project.  Also if you invest in the land a few years prior to building, you may have more money to allocate to the home itself.  There are however some issues that can arise if you purchase before you have a design ready.  If the land you are looking at is in a difficult location to reach, you may have unexpected transportation costs.  If the land is steeply sloped or odd shaped, you may have to compromise your ideal layout for one that fits better on your property.

The Design Process
The most important stage in the creation of your custom wood home is the design process. It is during the design phase where you and your architect will set the size of your home, the complexity of the design, and the type of materials that will be used.  Each of these design aspects (size, complexity and materials) will have varying affects on your home’s final cost.  As an example, let’s say that Jim and Jill start the design process looking to build a 2,500 sq.ft. log and timber hybrid with lots of roof lines and gables and unique trusses.  Their architect takes all of their desires into account along with their complete budget for the completion of their home (or turnkey budget) and goes to work.  Through the course of the design process their architect is not only working on the design but looking at the costs along the way.  He gets in contact and recommends some changes to the design.  He tells them that the turnkey cost is going to be more than their budget and provides options for their project. If they want to stay on budget they will either need to reduce the size to about 2,100 sq.ft., remove some of the complexity in the roofline, or reduce some of the timber frame materials.  Jim and Jill talk about their options and decide to get rid of some of the size, which will also reduce the roof lines enough to get within their budget.  They now have a home design they love, at a price that they can afford to build.

Materials
A common mistake buyers of timber and log homes make is to key in on the price of a materials package, instead of looking at the complete price of an actual home.  Many log producers will quote the price of their package (which could include just the wood or all the materials to create a dry-in shell).  There is nothing wrong with that, however, if the package price is the only number you have to go by, it requires more work to determine exactly how much your completed home will cost.  The log and timber materials could be from 15% to 50% of the total cost of your custom home.  This is why it is very difficult to try and allocate a specific portion of your budget to the logs out of context.  It is better to use the amount of log and timber that works best for your design and your budget as a whole.  Always think in terms of your complete house, not just a log or timber shell cost.

Construction
The delivery and stack of your logs does not end in a completed house.  Someone will need to construct the rest of your home, including the electrical, plumbing, roof, masonry etc.  If you concentrated on the cost of your log or timber shell and did not leave enough money for the actual construction, you could be in trouble.  This all goes back to making sure that your architect prepared you and your design for this stage of the project.

Finishes and Landscaping
Will you have hardwood floors or carpet in your custom home?  Do you prefer a basic electric stove or something more sophisticated?  What kind of landscaping will need to be completed once your home is done? If your architect has done their job, you will have money set aside in your budget to cover the level of finishes (both interior and exterior) that you planned for during the design process.

Just remember, if you are always looking at the entire custom home building process, you can have more confidence in your ability to meet your budget goals each step of the way as well as overall.  It is absolutely imperative that you choose an architect / company who thinks and acts this way too.

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