Managing the Cost of a Custom Home

This is the first in a series of blogs addressing the issues surrounding building a custom home.  It carries with it a lot of appeal for potential home buyers. The first factor to think about when it comes to buying a custom home is the extra cost.

 

When you buy a custom home, you may be paying a premium for the property.

We have all heard the phrase, “Location, location, location” with regards to real estate. Your home needs to be in the location which meets your lifestyle. What are your responsibilities, hobbies, interests, etc.? Do you need to be close to work? The airport? The golf course? Shopping? The family? or a combination of these? All of these are factors to consider.

Finishes are another factor which contribute to the higher costs. When you get your proposal for building the home, go through it and identify those items which are tied to an allowance. There are allowances allocated for almost every choice, from the roofing material and color, exterior trim, siding, landscaping, lighting, to even the garage door. And this is just a small sample of exterior items.

Screen Shot 2015-10-23 at 10.10.44 AMOnce you get through the front door, everything from floor and wall coverings, to fixtures and appliances, cabinets, hardware, and the doors have options and allowances; even the windows.

To manage the costs, follow these steps:

  1. Screen Shot 2015-10-23 at 10.11.28 AM
    Identify all the options you have while staying within the allowance. This will help you and the builder know if the proposal is realistic. The builder can recommend the brands and product lines that give options within the allowance.
     
  2. Screen Shot 2015-10-23 at 10.12.11 AMPrioritize the options. It isn’t unusual for you to have predetermined options that extend beyond the allowance: a particular tub, sink, or cabinet in the master bath. You know what you want! Those are the ones you keep high on the list.

    There are also items that don’t carry quite the same level of importance, like the options in the basement bathroom. Take the time to review all allowances and options. If you haven’t thought about the option before, it probably isn’t high on your list of exceptions. With those, stay within the allowance.

    As you prioritize the options, write down how much the option goes over the allowance. Affix a dollar amount to each selection.
  3. Screen Shot 2015-10-23 at 10.12.27 AMKnow your budget. This is where your deepest desires win. As Mick Jagger with the Rolling Stones sang, “You can’t always get what you want”. Depending on your budget, maybe you can, but if you can’t, you can get what you want most.

    Once you have the proposal from the builder, the prioritized options and you know what your budget is, you can start saying “yes” until you have met your budget. Start at the top of the list and you get what is most important to you.

    Keep the list of items that don’t make the initial cut. Future projects and opportunities can make them a reality.

 

Things to Consider: Regulations and Permissions

The rules covering exterior selections vary. Check with your local authorities and homeowner’s association as to whether you need permission to use certain paint colors, exteriors, etc.