Budget Estimate For Homebuilding
Tom Landis, Owner Builder Services

A budget is a financial plan for your entire Design/Build process. It is the dollar equivalent for all the work it takes to design and build your new home. You are NOT expected to create this document accurately at the outset of your experience so it's best to begin with estimates and refine your financial plan as time goes by.
The primary purpose of preparing a budget is to understand and control costs. Beginning with the estimates, one is able to guess the total dollar amount for the style and size of a home on a particular lot. At the very least an Owner should be able to consider if the project is feasible once estimates are made. The total dollar amount can be broken into two categories: hard costs and soft costs. Hard costs include labor and material to build the house. Soft costs include everything else. The budget format provided here outlines products and services which one utilizes during the Design/Build process.
The budget estimate for hard and soft costs is a departure point for considering the scope of Drawings and Specifications. These budgetary considerations BEGIN early in the schematic phase of the Design/Build process. Consider the initial study of costs as an exercise in project feasibility. Based on your projection of costs, the Owner should be able to weigh and consider the Design/Build options. With estimates prepared, attention can be given to the Budget review process: 1-identify priorities, 2-recognize tradeoffs, 3-do cost/benefit analysis, 4-revise cost estimate.
The following percentage estimate of hard costs is a ball park guess. It simply is a beginning point for determining if the amount you have to spend is even close to the house you want to build. One should realize that this is a very VOLATILE estimate. For instance, if you choose the "Sub-Zero" brand refrigerator for your appliance package (and if comparable products are used), then you might as well accept that once you complete your estimate, you will hold the price tag on a very high-end, luxury house. If you purchase the "General Electric" brand refrigerator for your appliance package (and remain with comparable products), then your estimate will result in a medium-priced, custom house. There is a cost range from economy, to modest, to custom, to luxury which CORRELATES with the products and materials you choose to install in your home. Match material/product choices with the price category in which you can afford to build.
PRELIMINARY BUDGET ESTIMATE
All preliminary budget estimates will include material and labor to complete both rough and finish installation. The following budget list represents cost categories to which you must assign preliminary dollar amounts for the work to be accomplished.
Private Septic or Public Sewer Private Well or Public Water Electrical Service from Utility Company Private Fire Sprinkler or Public Hydrant Gas or Oil Service from Utility Company Drawings & Specifications Development Permits & Special Fees from Building Department Site Access and Street Culvert as well as Driveway Excavation/Backfill/Grade Foundation/Structural Slab-on-grade Flat Concrete/Aprons/Patios/Sidewalks Frame Lumber/Trusses/Labor Decks/Porches/Veranda Roofing/Flashing/Ventilation Windows/Skylights/Solar tubes Siding/Exterior Trim Gutters/Downspouts/Stormwater Fireplace/Stove/Insert Plumbing and Trim Fixtures Heating/Ventilation/Air Conditioning Electrical and Trim Fixtures Exterior Doors & Garage Doors Weatherization/Firestuffing/Insulation Drywall/Tape/Texture Paint Interior/Wallcoverings Paint/Stain Exterior Cabinets/Counters Interior Doors/Trim/Hardware Floor Coverings Appliances Bath Accessories Clean-up/Recycle/Landfill Landscaping Contingency Superintendence Profit/Overhead Sales Tax (if applicable)
The remainder of this chapter is dedicated to such topics as "Construction Budget Estimate by Percentage of Hard Costs" and "Construction Budget Estimate by Percentage of Soft Costs".
And just to remind you how your money might be spent by others, there's a further breakdown of "Builder's Overhead and Profit" as well as "Architect/Designer's Fee".
Getting started on a Budget Estimate can be exasperating with no formal training in the business of residential architecture and construction. The purpose of this chapter is to help you create a fiscal plan of action for your home building project.
TAKE CHARGE OF THE DESIGN/BUILD PROCESS
Copyright © 1997 by Tom Landis, Owner Builder Services
We would like to thank Tom Landis of Owner Builder Services for the above information. Please visit his website at www.ownerbuilder.com " . . . . advocating for owners in the design/build process." The above excerpt is taken from his Home Building Consumers Guide Video a step-by-step approach for people who want to better manage their residential construction project by knowing what happens, when, and why.