#Hidden household budget items plus#
allowance overages) and change orders, BUT your builder is responsible for mistakes and his/her profit margin decreases with mistakes (and with material/labor price increases).ĬOST-PLUS: You pay the actual cost of construction PLUS a fee (typically a percentage of the cost) to the builder. Of course, you are responsible for paying for upgrades (e.g. I’ll give a VERY brief explanation of these two options, but each builder has their preferred way of charging clients, so you need to have a conversation with YOUR builder about how they charge for builder fees.įIXED-PRICE: Your builder plans out every detail of your home ahead of time and gives you a ‘final’ cost of your home (including the builder fee). There are two ways that builders typically charge: fixed-price and cost-plus. It’s key that you are VERY CLEAR on how YOUR builder will charge you BEFORE you sign your home build contract. EXPENSE #2: BUILDER FEESĪnother thing you need to consider when building a house is the amount that you’ll owe for builder fees.
Just be sure to include room in your budget for the cost of your desired land PLUS any land preparation costs that apply to your lot … debris removal, tree removal, grading, leveling lot, bringing in fill dirt, deconstructing existing buildings, etc. we bought a wooded lot and had to pay roughly $3000 to remove trees). Not only do you need to buy the land, but you also need to account for any excavating and clearing costs (e.g. Obviously, you’ll need to purchase land to build your home on … whether this be via your builder or buying a plot of land on your own (FYI: my husband and I did the latter). 7 UNEXPECTED EXPENSES WHEN BUILDING A HOME EXPENSE #1: LAND + LAND PREP
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