Determining the cost to build a new home is easy. However, many builders answering that question will say, “Well, it depends.” And, to an extent, that is very true. Yes, it depends on the location, size, features, and such. But to get a basic estimate of what your ideal house would cost to build is pretty simple, and it even includes those variables.
How to find the cost to build a new home
1. What are the prices of comparable new homes in your area
First, you want to find out what comparable houses cost. This means determining what you want in a new home and then finding new houses for sale that are as similar as possible to your ideal home. Consider lot size, house square footage, quality in features, style and location. The house you find on the market that’s most like your perfect home, the more accurate your cost calculation.
2. Calculate the cost per square foot
Now that you have comparable properties, simply, take the listed price and divide by the total square footage of the house. This is the price per square foot. Example: $500,000 price / 3,000 sq. feet = $167 per sq. foot. The price per square foot is the key to finding the cost of any size house you want to build.
3. Find the cost to build your new home
Next, take the total square footage of the home you want to build and multiply it to the price per sq. foot. Continuing with our example, if your ideal home is 3700 sq. foot, multiply it to $167 per sq. foot and the total cost is $617,900 to build your home. (3700 sq. foot x $167= $617,900)
Of course, this formula (guide) is only an approximated cost to build a home. But it will give you an idea to either pursue building or not. And it will determine whether you can afford more or less.
To get help picking a good builder, check out our guide How to Find, Interview, and Vet a Home Builder.
