How to stay within budget when building a custom home

Many people go over budget when building their new home but how can you gain better control?

I am not sure of the percentage, but I would say the majority of people I have spoken to, go over budget when building a custom home. It is changes and upgrades that happen while the home is under construction that normally push the line.

So how can you stay on budget?

  1. Do you truly understand what your budget is and what it includes? The first problem is that when construction begins, and people can see what their home is going to look like, and the products going in, they change their minds. Spend all the time you need researching the budget and the products it includes. Also, visit homes that are similar to yours so you can envision the finished product. Most homes are not quite so unique that there are no others like yours. Most home builders build within the same style, so you can go see other homes they are building as well.
  2. Take your time. If you are in a hurry, prepare to go over budget and possibly not get the best custom home possible. Taking your time to visit showrooms, other new homes, tradeshows, and viewing websites for information means you will have done your homework. You could spend months looking at products, but if you are diligent you can learn enough to confidently understand what your home will look like, and the products going in, to the point that you get excited. The more custom you intend your home to be the longer it will take, and it depends on how much time each week, or month, you have to research.
  3. There are three types of new homes- Move-In Ready, Semi-Custom, and Custom Homes. Move-In Ready means that the home is completed and ready to buy immediately. These homes are predefined as to what they include or what upgrades exist. A semi-custom home is taking a floorplan that a builder creates and either building that or making minor alterations. A custom home is starting from scratch, creativity is endless. You can imagine how budgets can get out of hand as they move from set prices to custom homes. FYI, production builders normally offer better prices per square foot because their costs are different based on their scale and the fact that it is a streamlined process.
  4. How much feedback and advice do you want or need? The more friends, family, and consultants you involve the more money you spend. Not to say you should not seek out advice, but you may want to limit how many trusted advisors you have!

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