For many homeowners, the options on the real estate market aren’t enough.
This is when they rely on contractors to help them build their dream home from the ground up. Although it may seem like a big challenge, building a house is the best way to have a place that is completely customized to their taste.
If you’re working in the construction business, it’s important to know the cost to build a house. This guide will break down all of the different factors to consider so that you can start the process feeling informed and keep clients happy.
Ready to learn more about the cost of a house? Let’s get started.
Buying and Prepping Land
Before a house gets built, the owner needs to choose the land. Although you may not be brought on during this process, it’s important to know that land can vary significantly.
Some future homeowners buy a plot of land for views alone, not knowing there could be contaminated soil, higher exposure to natural disasters, or high zoning costs. Ideally, you’ll have a customer who did their research and checked every factor.
There are finished and unfinished lots to choose from. Finished lots hook into the electric grid, sewers, and water lines. Urban areas tend to have finished lots, whereas you’re more likely to find unfinished lots in rural areas.
If your business doesn’t offer construction site preparation, then the homeowners will take care of that themselves. Otherwise, the average cost of clearing and preparing the land to build a house is around $2,500.
Permits and Regulations
Once the clients purchase a plot of land, this is where a lot of the hiring begins. Contractors and subcontractors start prepping. You’ll need to reach out to the local municipal office and receive the necessary permits.
If you already have a relationship with the municipality, the process will likely go faster.
Before construction can begin, you’ll need building permits. These are documents that authorize you to start constructing the property. There are different building codes, regulations, and associated fees depending on where you want to build.
The clients should expect to pay at least a couple thousand dollars for the necessary permits.
Building the Foundation
Once you have all of the permits taken care of and the prep work finished, you can finally break ground. This is when you and your crew come in to dig out the space needed for the foundation of the home.
Each home is different, and that means that the foundation won’t be the same across the board. Your business will have the experience to help homeowners decide the best option depending on the style they choose. A slab foundation is generally the cheapest, and the basement tends to be the most expensive.
Clients decide the type of foundation they want during prep work, and it all depends on their budget and preferences. Generally, building the foundation costs around $14,500.
Labor and Contractor Costs
If you’re a general contractor, you’re one of the most important people hired to build a house. Clients should know that you oversee the entire construction process and take on several responsibilities. You’ll obtain cost estimates, hire the right team of subcontractors and ensure you meet every deadline.
The rate for a general contractor is around 10-20% of the construction’s total cost. Certain contractors will agree to an hourly rate of $50-$100 an hour.
You’ll also need to hire different subcontractors. Each one specializes in a certain task or installation. They charge a similar rate to general contractors.
It doesn’t take long for these costs to start adding up, and the best way to have a clear idea of how much your total cost will be is to use a home builders estimating software.
Framing the Home
Once the foundation is set, it’s time to frame the home. The frame acts as the bones for you to build around. It helps support features such as doors, windows, and the roof.
The overall cost for building the frame of a home includes both materials and labor. Bigger or more complex homes will cost more. Expect to pay around $20,000-$50,000 for framing.
Exterior Work
Once the skeleton of the home is built, you’ll need all of the necessary external elements installed. This relates to the elements of the walls, roofs, and openings that will get installed.
Exterior finishes like the siding go up on the walls, followed by the windows and doors, and then the roof will be sheathed. All of this exterior work will cost around $50,000.
Interior Work
Then there’s the interior work. This includes things like flooring, drywall, interior doors, insulation, and all of the other components that will transform a constructed structure into a livable home. This is when countertops and cabinets are installed, appliances will get plugged in, and walls are painted.
This is one of the most expensive parts of building a home. The exact cost depends on the personal preferences of your client, but the average cost is around $112,500.
The final step involves finishing touches. This includes outdoor structures like a driveway or landscaping.
The national average cost of building a home is around $284,057, but remember that it depends on taste and preference.
The Cost to Build a House
It’s no secret that constructing a house from the ground up is an expensive feat. With that said, homeowners are rewarded with a home that is exactly what they want, and you’ll have the unbeatable feeling of a job well done.
If you’re hired for a residential construction job, you’ll need to know the cost to build a house. Knowing all of the different costs can help minimize stress, keep clients happy and ensure a painless process!
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