setting a budget for your new home
how much will my new home cost?
Similar to the discussion of architectural service fees it is imperative you begin thinking about a realistic budget and inform your architect (or candidate architect) of your thoughts. Once hired, an architect can verify your budget with your needs and wants list for feasibility. Here are some guidelines for determining if your budget is feasible:
The easiest way to determine the feasibility is to do some simple math. If you have a total project budget in mind take the total construction cost (remember, this is not the total cost including possible architect, contractor, and consultant fees) and divide it by a unit cost. You can get some average unit costs from architects or contractors in the area. The resulting number will tell you a feasible house size. Let’s use an example of a $400,000 construction budget and a unit cost of $250/square foot.
[ example ] $400,000 / $250 per SF = 1,600 SF home
If you reverse this equation you can get a feel for how much a specific size house may cost.
[ example ] 2000 SF home x $250 per SF = $500,000
Another way to approach this is take your total budget and divide it by your desired area. This will tell you the unit price you can afford.
[ example ] $420,000 budget / 2000 SF home = $210 per SF.
Understanding the average unit price in your area will give you an idea of how realistic your expectations are. Additionally, architects can use these numbers to do their best at strategically fitting your unit price and needs together without sacrificing quality.
Remember, the examples above are only the construction “hard costs”. Take that number and figure 10%-15% more for “soft costs” such as architecture fees, surveyors, engineers, etc...
You may be reluctant to share your budget with your architect fearing he or she will simply spend the entire budget. The truth is, part of the architects job is to figure out how to fit all of your needs and wants into your project in the most cost effective way. In fact, there is no better way to discover thoughtful ways to save money than working with an architect. It’s what we do!
did you enjoy this article? download our free guide today!
This article was an excerpt from our free guide: "5 Steps to Hiring an Architect and Building Your Dream Home".
Designing and constructing a building (whether a home or large office) is a complex and intimidatingendeavor.
We wanted to create a guide that breaks down the process, introduces you to the terminology, and helps
you get started on your project. Additionally, we added a few simple exercises to get you started right
away.