6 Min Read
Building a new home sure is an exciting adventure, but it’s important to be ready for some unexpected costs along the way. While we often focus on the main expenses like land and materials, there are hidden costs of building a home that can sneak up on you if you're not prepared to budget for them. At Elevation Building Company, we know how important it is to feel prepared for every part of the custom home-building process. So, we're here to explain how some of these hidden costs are added expenses, while some hidden costs are based on the design choices you can make when working with your architect.
Let's dive into all of these costs so you can plan ahead and keep your custom home comfortably within your budget!
What is not included when you build a house?
When you're building a house, there are a few things that might not be covered in your initial budget. Often overlooked are costs like land acquisition, landscaping, and interior furnishings, to name a few. Plus, understanding how your decisions when designing your custom home means looking beyond the obvious expenses.
Is land included when you build a custom home?
Land is a big part of the cost of building a home and is often not included when you choose to build a custom home. If you buy land separately, you'll need to add this to your budget. However, in some exclusive communities, land might be part of the package, making things a bit easier. Prices to build a house in these communities could include the cost of land, but it's essential to check before committing. Whether included or not, land costs significantly impact the average price to build a house.
Cost of Land in Atlanta
If you’re planning to build a custom home in Atlanta or the surrounding area, understanding the cost of land is a big first step. Land prices here can vary a lot depending on location, size, and proximity to amenities. In high-demand areas like Buckhead or Virginia-Highland, prices can range from $300,000 to over $1 million per acre. But in more suburban spots, you might find land for as low as $100,000 per acre.
Land preparation is another major factor. Clearing the land, grading, and ensuring proper drainage can add thousands of dollars to your budget. For instance, preparing a wooded lot might cost between $5,000 and $15,000, depending on how much work is needed. And if the land requires utility connections or road access, these costs can add up.
When figuring out how much it costs to build a house in Atlanta, always include these land-related expenses to get a realistic estimate. Knowing these hidden costs of buying a newly built home can save you from any unpleasant surprises later on.
How do material choices affect costs in a custom home build?
The materials you choose have a huge impact on the cost of building a home. After all, there are a lot of materials that go into the design of a whole new home. The cost of materials to build a house can vary widely depending on quality and availability. Builder-grade materials might be more affordable, but they don’t always offer the same longevity or look as higher-end options. By working with your architect to mix different grades of finishes, you can keep your budget balanced while still getting the style you want.
What are builder-grade materials?
Builder-grade materials are usually the most cost-effective options used in construction. This doesn't usually mean they're low quality, but you'll have to do some homework to ensure they'll perform as you'd hope in terms of durability and style. These materials meet basic quality standards and are often chosen to keep building costs low. While they get the job done, opting for higher-quality finishes can really enhance your home’s durability and aesthetic appeal.
For example, upgrading from builder-grade countertops to natural stone can add a touch of elegance and lasting value. As for light fixtures, choosing builder-grade options doesn't necessarily affect functional quality but can affect the style of a space.
Choosing higher-end materials might increase the overall cost of building a house, but the investment often pays off through reduced maintenance, increased home value, and just how much you'll love your new home.
How do material choices affect the cost of your custom home?
As you'd probably expect, your material choices directly affect the overall cost of your custom home. High-end finishes and features can significantly elevate both the look and durability of your home, but they do come at a premium. You can keep your budget in check by strategically mixing different grades of materials, which your architect will be able to help you sort out.
For instance, choose builder-grade materials for less prominent areas and reserve premium finishes for high-traffic or highly visible spaces. Choose high-quality materials where durability is a concern, like bathrooms and mudrooms. Working closely with your architect and builder to get new construction quotes and detailed builder upgrade price lists can help you manage costs effectively.
What is usually the most expensive part of building a new home?
Labor is typically the biggest expense when building a new home, often making up 30-40% of the total cost. Skilled labor is essential for quality construction, and investing in experienced workers ensures your home is built to last. While it might be tempting to cut costs by choosing cheaper labor, this can compromise the quality and longevity of your home.
How does labor affect the cost of building a new home in Atlanta?
As we just mentioned above, labor costs are a significant part of the overall building expenses. Quality craftsmanship requires skilled labor, which naturally comes at a higher price. Trying to save money by opting for cheaper labor can result in subpar work and costly repairs down the line. Because of this, it's pretty important to select a reputable construction firm that values quality over cutting corners. This ensures that your investment in building a house cost translates into a home built to the highest standards in both construction and safety.
Do new construction homes come with appliances?
Whether new construction homes come with appliances depends on the builder. Some homes include basic appliances, while others may require you to purchase your own. When choosing appliances, consider your lifestyle and needs. For instance, the gourmet home chef might prefer high-end kitchen appliances, while a busy family might prioritize energy-efficient and user-friendly options.
What are the hidden costs of construction?
Unfortunately, your custom home quote isn't the only financial preparation you need to make. But don't worry! We're taking out the guesswork by giving you a heads-up here.
Hidden costs of building a home can catch many homeowners off guard, but since you're doing your homework, you'll be well-prepared! These unforeseen expenses can include anything from site preparation and utility connections to landscaping and furnishings. Additionally, changes in material prices, weather conditions, and permit fees can all add to the overall cost. To mitigate some surprises and prepare for others, it’s essential to understand how to calculate contingency costs in construction and budget accordingly.
What is a construction contingency?
A construction contingency is a reserved budget, typically 5-10% of the total project cost, set aside to cover unexpected expenses during the building process. This fund ensures that unforeseen issues, such as material price increases or unexpected complications, don’t derail your project. Including a contingency in your budget provides peace of mind and financial flexibility.
Where do you live when you are building a custom house?
While your custom home is being built, you may need to arrange temporary housing. This could mean renting an apartment, staying with family, or leasing a nearby home. Planning for this expense is crucial, especially if you sell your current home before the new one is ready or if you’re relocating from another state. Including this cost in your budget helps avoid financial strain during the construction period.
Simply search around for housing that will suit your family temporarily, multiply it by the number of months your builder quoted for your timeline, and add a couple of months in case there are delays due to weather or other delays.
Does a custom home include landscaping?
Landscaping is often not included in the initial cost of building a custom home. After construction, budgeting for landscaping is essential to complete your home’s curb appeal. Custom home builders may have trusted landscape architects who can design and implement your outdoor space. Planning for these costs ensures your home is pristine and beautiful, inside and out.
Ask your builder for a few recommendations and reach out to get a few quotes. With your design in hand and landscaping design ideas, a landscape architect can help you get a general idea of what it could cost.
Does a custom home include furniture?
Custom homes typically do not include furniture, so budgeting for furnishing your new home is important. While spec homes might offer the option to purchase staging furniture, this means sacrificing some customization. Working with a design-build firm that has a network of interior designers can give you a leg up on planning for the expense. They'll help you select the perfect furniture to complement your new home, ensuring each space reflects your style and blends well with the furniture you already have.
You're Ready to Take the Next Step!
Building a custom home is an exciting journey that requires careful planning and consideration of potential hidden costs. Working with a talented construction team ensures a seamless process and will give you the confidence to take building a custom home one step at a time. Want to feel even more prepared than you already do? Explore our process to understand how your dream home will come together. Contact us for a quick consultation to see how we can help you achieve your custom home goals!
