From the Ground Up

Understanding the Cost of Building A Home


Beginning the home building process is incredibly exciting. When you choose to do it with a custom home builder, you have the ability to create and design every aspect of your home according to current and future needs. Whether you want a fully furnished basement with an entertainment center or a beautiful bay window in the kitchen, or both, the possibilities are endless!

Before you begin the home building process, there are a number of costs to consider, so that when you get to the design and construction phases, it is a smoother process. Here are a couple of things to keep in mind when calculating the costs for your new home.

Custom Home Building Costs Vary Greatly

The great thing about building a custom home is that you get to choose everything, but for calculating the cost beforehand, that means that the price can vary a lot based off of your choices. Typically, a custom home will cost more than a modular home, because of the custom design process and variety of options for elements of the home.

However, working with a home builder can actually save on some costs, especially if that builder has customizable plans already in place for you to choose from and property that is already available to purchase. The cost can vary depending on the options that the builder has available.


This is one of the first costs you need to account for, as the area where you choose to build will affect other costs as well. You can purchase property from your custom home builder, inherit property, or plan to buy in a specific area of your desire. No matter what route you take, you need to account for property costs, which vary depending on your state, city, and local area.

Custom or Modular Home Build

Will you build your dream home from scratch or choose a modular home to be modified? Will you work with a developer or a home builder? When you are thinking about this cost, you may want to consider the future and if you will want more space for additional family members. Some people choose a modular home because it is a cheaper option, but then decide down the line they want to expand their home for more space. However, sometimes it is not possible to install a second floor because the existing modular home cannot support the new weight. It is always a good idea to consider future needs along with current needs, to make any future changes as easy as possible. If you need some ideas to consider your ideal future home according to your lifestyle, check out our free Lifestyle Checklist!


Design is one of the most fun parts of the home building process, so it's very important to account for these costs ahead of time. Especially if you have a lot of custom requests, these costs can quickly add up. To make things easier during the actual design process, set a hard budget for design ahead of time, so you know exactly what you can afford. Make sure to include interior costs too. 


Building your own custom home is an investment, and it should be treated as such. Protect your new home, especially during the construction phase, with insurance. 


Ensuring that you have the correct permits can sometimes be overwhelming, but your home builder can help guide you through this process. Once you work it out with your home builder, make sure you are clear on what permits you need, and how much they will cost.


Work with your home builder ahead of time to determine how much you can expect to pay for construction. This cost should include excavation, site preparation, roofing, electrical installation, and plumbing.


Who doesn't love brand new appliances in a home? You may be considering a lot of new appliances to make sure everything matches your desired interior design, such as an oven, dishwasher, refrigerator, washer, dryer, etc. Make sure you select these appliances based on the budget you already have so you aren't surprised with any costs!

Home Inspection

At the very end of the home building process, it needs to be inspected to make sure the construction meets standards for occupancy. Find out how much this will cost ahead of time so that again, you are not surprised with any costs. The cost will vary depending on the size of your home.


You don't have to consider this cost up front if you'd like to work with landscapers at a later time, but if you'd like the landscaping ready when you move in, definitely consider this cost. 

These are all things you should consider when building a custom home, but of course it can vary. It may seem overwhelming at first, but remember that you are building your dream home, and it is an investment. Building a custom home can also save you money. One example of this is that new homes are typically built to be energy-efficient, which will end up costing you less on your energy bill. By building your own home, you also have the peace of mind that everything works, there's no faulty faucet or squeaky door. And if there is, you can work it out with your home builder to fix. Buying an existing home can come with a lot of additional costs, due to broken appliances, remodeling, and upgrades or repairs to plumbing and electrical systems.