Real Estate Blog & Resources

How to Budget for Your Dream Home: Part One

78434871Most people don’t need the benefits of building their dream home laid out for them. The reasons are fairly obvious. The decisions are all yours, so you get to have everything exactly how you want. But people often aren’t aware of the tradeoffs this approach also introduces. For example, it’s often more costly to build than to buy an existing home. Fortunately, Southstar Communities is here to help you think through designing your dream home, and to give you some ideas about managing the costs associated with the process:

· Thoroughly go over your finances. Before you even consider purchasing land, first you need to uncover what your “real” budget is. Consider the financing you’ll need to secure, and any loans, deeds, allowances, and income you’ll be putting toward your purchase. Factor in how much you’re willing to spend not just on your home, but even on purchasing your home’s site before that. Once you’ve purchased your lot in one of our master-planned communities, your next step will be to meet with the builder.

· Meet with your builder. Southstar Communities will suggest some builders we have partnered with before, but we do not actually build your home. The entire building process is completely up to you. So you’ll need to take plenty of time to make sure you find just the right builder for you and your family. Meet face-to-face with potential builders to set each other’s expectations. Ask if the builder you’re considering typically builds homes similar to the one you want. Research factors such as size, features and quality. Each builder will be able to tell you how much they charge for home construction as a per square foot cost. Be transparent (and realistic) with your builder about your budget. Most good builders can help you calculate a realistic range for the things you’re asking for. You need to mutually agree to all of those limitations in advance.

· Calculate your desired square footage. Talk with your builder about how large (or small) you’d like your new home to be. Be aware in advance of any community guidelines for minimum required and maximum allowed square footage. Building quality, features, and materials used will all factor in to your budget. As you design your home, be aware that it’s easiest to work with even numbers, so try to keep your measurements and plans in increments of two feet.

· Calculate preparation costs for your site. Getting your land ready to receive your home can be costly, with expenses depending on several factors. Talk to your builder about the costs of re-landscaping your lot, clearing trees, removing large rocks—anything that your land will need to prepare it. It probably goes without saying that it’s usually most cost-effective to build on a lot that’s already relatively flat.

As long as you work together to realistically assess your finances, you meet with the right builder, and you plan your house carefully, the benefits of building a custom home can far outweigh buying a predesigned, prefabricated, used one. Next time, we’ll discuss more of the factors that you should consider before you begin building your dream home.

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