And what should you expect for your money (without being misled by advertised prices)
Whether you’re planning to spend $500k or $5million on your custom home, you need a budget. A spending plan. An idea of how much money you will spend and what you will spend it on.
Which raises two questions:
How much do you need to spend?
And what should you expect for your money?
Here are some of the ways people estimate their custom home budget:
Online Advertised Prices
It’s common for people to compare the prices of generic home designs online. But this can be confusing (and often misleading). Not because of what is said to be included in the homes, but because of what’s not included (and not mentioned).
Choosing a volume-built home from a catalogue of generic designs is often like buying a car without wheels. The extras (things like wheels — which you assume would be included) can cost tens of thousands more. And then, every minor adjustment you make to the plan, adds thousands more. So, while the initial price might seem attractive, the final price can be hundreds of thousands more.
This just leads to false hope (about what you are led to believe you can have in your home) and hours of wasted time.
Price Per Square Metre
Other people try to calculate their custom home budget based on a square metre building rate. The problem is these rates vary in range from $600/sq metre through to $6,000/sq metre.
Sure, you can usually refine that a little depending on the type of custom home you want. But this form of estimating doesn’t begin to consider any specific features. And something as simple as a different floor tile (that may cost $100/sq metre more), can add $20,000 extra over the 200 sq metres of your home.
Then there’s the variances for single vs double story, flat vs sloping land, type of exterior cladding, and the comfort and energy-efficiency levels. Budgeting say $2,500/sq metre without knowing exactly what you should expect could leave you $1,000/sq metre short (which is $200,000 on a 200 sq metre home).
Custom Builder Estimate (variance of 20%)
Although it may feel uncomfortable (and a little premature), it’s never too early to speak with a builder about your custom home budget. The problem is most builders prefer to deal in general prices (with a 20% variance) so they are never caught short. On a million-dollar home, this can make a difference of $200,000.
Most builders also need to work with an external architect. This often causes more price uncertainties and delays going back and forth with a third party.
The best way to get a feel for a builder’s true pricing is to ask them to show you the last 6 homes they’ve built and go through the pricing (including the initial quote and final costs). This will at least give you an idea of how much other people have paid so you can set your custom home budget accordingly.
Custom Designer Builder
The best way to set a budget for your custom home is to speak with a custom designer-builder. Explain your vision – the end result you’re looking for – and ask their advice on the best (more effective and cost-efficient) way to achieve it. An experienced designer-builder will not merely give you a price to build your home, they will offer suggestions to help you get the most for your money.
If you’re unsure of exactly what you want in your home (what to include or exclude), start by examining your current home. What things do you like best and use most? What things have sat unused for months (perhaps years)?
This will give you an idea of where to prioritise spending in your budget. Then ask a designer builder how much each feature will add to the price of your new home. Knowing the cost will help you arrange your wish list according to needs and wants.
And finally, be sure to get a fixed, firm price so you know exactly where you stand before you sign anything.
For free advice on how much you should budget for your custom home, we invite you to book a Free Consultation where we will answer your questions and show you the most efficient and affordable way to get a custom home you’ll love forever.