Home Construction Costs: How Does a Home Builder Calculate Construction Cost?

It’s the first thing everyone asks me. How much will it cost to build this house? I can’t argue with the question … it’s a good one. Before building a home, or before a major remodel or home improvement, you need to know what to budget for.

 

But first, we must make a distinction. So we need to determine exactly when we need to know the cost. Finally, this article will encourage the use of a home building trainer.

 

BUILDING OWNER VS. GENERAL CONTRACTOR PROJECTS

 

People have become used to receiving offers and quotes on projects that builders manage and complete. This is appropriate. But what if you build as an owner? How do you calculate costs when you don’t have the same resources as a builder?

 

First, we need to understand the difference between a builder’s quote and an owner’s builder’s estimate of construction cost. Here’s a snapshot of what you get when a builder quotes your project.

• The quote is provided in advance to win the job.
• The quote is not set in stone.
• The quote has a significant profit margin built into it for the builder.

Now, let’s see what happens when a proprietary builder calculates costs. There are some subtle but important differences. Understanding them will free you up to continue your project.

• Construction cost is a process that takes weeks to complete.
• Construction cost never becomes a quote, it remains fluid.
• There is no general contractor markup, as the owner builder strives to generate equity capital.

But again, how does the owner builder calculate these costs?

 

Hire a HomeBuilding Coach first

 

Pay a coach for services rendered, not for an entire project. Therefore, investing in a coach to help you calculate the potential costs of a proposed project is a wise decision. It can help you decide if, how and when.

 

Your coach can advise you to get some quotes from a general contractor. You may also be advised to seek quotes from panelized and household equipment companies. You see, your coach is your advisor and confidant and is there to provide you with options and support. As a home builder, you are in the business of building your home and need competent help.

 

THE STEPS TO CALCULATE THE COST OF CONSTRUCTION

 

Obtaining quotes and estimates from builders and suppliers will add to other costing procedures. Your coach will guide you through a process of developing or choosing plans for your home, selecting materials, and preparing a work plan. During this process, you will be guided to make decisions as a result of material and labor costs as you learn them.

 

Ultimately, once enough information is gathered, you will be able to come up with a very reasonable cost estimate. When done this way, changes and commitments are made on the fly and your estimates will be more accurate.

 

You will soon know the viability of your project. If you decide to postpone construction for later, just cut ties with your coach. It took you some time and a little money, but you gained a lot of knowledge and avoided a potentially costly mistake.

 

An added benefit

 

Finally, you get an added benefit during this process. You will learn about other options. Together with your coach, you can determine whether a home kit, home kit with a pole, or another approach will best serve you. You will also analyze and quote different material options. Working together, you will develop an approach that will serve you well.

 

When building (or making major home improvements), it pays to research, learn, and hire quality help. The pricing process for your project will teach you a lot.