Building Within A Budget: Understanding All of the Costs Associated with New Home Construction

Jen-Chinburg
Written By: Jen Chinburg

Just How Much Does New Construction Cost?

Everyone has heard a horror story about the guy who decides to build his own home and then runs out of money due to unexpected costs increase on his new home construction project. This often occurs when naive homebuyers get coupled with inexperienced builders, and both fail to adequately budget enough to cover some of the less readily apparent costs of new construction.

In general, about 7%-10% of the cost of building a new home is taken up by these less apparent expenses. Don’t get caught off guard with your new home construction. Be sure to factor in the costs of these other elements of new home construction:

Fees and Inspections

It’s not all about lumber and paying construction crews. There are permits, impact fees, inspections, and a whole host of other incidental costs that by themselves are not catastrophically expensive, but together make up a considerable percentage of total costs. These costs don’t accrue generally until late in the construction process when funds are starting to dry up.

Some of these costs, like the building permit fee, scale with the size of the project, so new would-be homeowners are often caught off guard with fees of between $5-$10 per $1,000 of estimated cost across the state of New Hampshire.

These fees vary from town to town, and in some cases, getting the information is not always easy to come by.

Hard to anticipate costs

Clean up — According to the National Association of Homebuilders, the average new home construction accrues almost $2,300 in cleanup alone, and this amount, of course, varies widely.

Weather delays — A rainy summer can also run up costs as construction time extends. Occasionally, a project will be so far delayed that the costs of renting while the home is completed start to become unmanageable.

Problems with Public Works Getting a new home situated with water, gas, sewer and other hook ups can take time. Be prepared to be at the mercy of the public works crews.

There are any number of sneaky ways a new construction project can start hemorrhaging capital. Make sure you’re prepared for some wiggle room in your budget. One of the best ways to keep your budget under control and minimizing the impact of unexpected expenses is hiring a reputable, honest builder with plenty of experience and good, responsive customer service.

At Chinburg Properties, we have over two decades of new home construction experience to fall back on, so we can better estimate costs and deliver within budget. Contact us today to ensure you can get the most out of your budget.

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