Planning to build a house? Here is where your money will go.
Finding a house that perfectly fits your needs can be challenging, to say the least. Chances are, you’ll have to compromise.
A custom-built home, however, eliminates compromise: Not only will you get exactly what you want, the thinking goes, but you’ll have brand-new materials and systems that won’t need repair in the near future. But how much will it cost — and what will you really be paying for?
A recent survey of residential construction companies by the National Association of Home Builders broke down the cost of building every component of a home, including the builders’ markup and other overhead expenses that are ultimately reflected in the final price.
The results are based on the typical home built by those surveyed — a 2,776-square-foot house on a lot of about 0.4 acres — with a total cost to the buyer of $427,892. Of that amount, $190,132 covered the cost of the lot and the contractors’ overhead and profits.
The remaining $237,760 was spent on building the house. So where did it go?
The cost of land, materials and labor will vary depending on your location, but the distribution of other expenses shown here is likely to be similar no matter where you are.
By Michael Kolomatsky