Building a new home is an exciting endeavor, but it can also be quite daunting. One of the biggest challenges that homeowners face is staying on budget throughout the design-build process. With so many moving parts and unexpected costs that can arise, it’s important to take steps from the start to ensure that you stay within your budget. In this article, we will discuss how to stay on budget from the start in a design-build new home construction project.

Choose a Builder Who Prioritizes Your Budget

The first step in staying on budget is to choose a builder who understands and prioritizes your budget goals. Not all builders are created equal, and some may prioritize their own bottom line over the needs and goals of their clients. Many builders who operate on a cost-plus model are seemingly incentivized to let costs overrun, as they are paid a fixed percentage of the total project cost. Look for a builder who is upfront about their pricing structure and is willing to work with you to design a home that meets your needs and budget.

One key aspect to consider is whether the builder is designing the home to fit your budget from the beginning. This is primarily driven by the home’s square footage and how efficiently it stacks. The finishes and selections are a factor, but don’t drive costs as significantly. This is an important consideration, as it can help you stay within your budget while still getting the features and amenities you want in your new home.

Establish a Realistic Budget

The next step is to establish a realistic budget. This is critical, as it sets the foundation for the entire project. You should start by figuring out how much you can afford to spend on your new home, taking into account your current finances, your future income potential, and any other financial obligations you may have. If you require financing, speak with your lender first to determine your comfortable budget range.

It’s also important to factor in unexpected costs that may arise during the construction process, such as unknown site conditions and changes in material costs. It’s prudent to give yourself a contingency amount in your budget. Once you have a clear idea of your budget, you can work with your builder to design a home that meets your needs while staying within your financial means.

Work with Your Builder to Design a Home that Fits Your Budget

When working with your builder, be upfront about your budget goals from the start. This will help your builder determine if your project is a fit for them. Then, your builder can design a home that meets your needs while staying within your financial means. Be open to suggestions from your builder on ways to save money without sacrificing quality.

For example, they may suggest using less expensive materials for areas that are less visible. They may also suggest designing a more compact floor plan to reduce costs. Be open to these suggestions, but also make sure that the home design still meets your needs and includes the features and amenities you want.

Establish a Clear Scope of Work

Another important aspect of staying on budget is to establish a clear scope of work from the start. This includes outlining the specific tasks and responsibilities of the builder, the architect, and any subcontractors involved in the project. This will help you avoid unexpected costs that can arise when responsibilities are not clearly defined.

Be sure to work with your builder to establish a detailed contract that outlines the scope of work and includes a breakdown of costs. This will help you stay on track throughout the construction process and ensure that everyone involved in the project is on the same page.

Set Milestones to Confirm the Project is Staying on Budget

Throughout the construction process, it’s important to set milestones to confirm that the project is staying on budget. Your builder should provide you with estimates at key milestones, such as after the architectural plans are completed, after the engineering is complete, and after foundation and framing. These estimates will help you track the project’s progress and make adjustments if needed, ensuring you stay within your financial means.

If the estimates are higher than expected, work with your builder to identify the specific areas where costs have increased and find ways to reduce them. For example, you may be able to find less expensive materials or make architectural changes that reduce construction costs. This process is known as value engineering, and is a critical collaboration between you and your builder to guide the project to the desired budget destination.

The Thomas Sattler Homes Process

At Thomas Sattler Homes, our process begins with the budget goal for the project. We begin working with the architect to design the home within the budget goal and provide milestone estimates as the plan evolves, making sure the budget is on track as the project proceeds. Our fixed price contract model gives our customers the peace of mind that they know what they are getting for the agreed upon price. We guide the project and our customers through the process, helping them to stay disciplined with the budget goal they set. Contact us to get your project started the right way, beginning with the budget.

Found the perfect lot? Already own land? Call us today to schedule your free feasibility estimate! Know your total project cost before you commit to any decisions. We pride ourselves on a customer-oriented experience, always putting your needs first. You can reach the Thomas Sattler Homes Sales Team at <a href=”tel:7204493562″>Call (720)449-3562</a> or online at ThomasSattlerHomes.com.

The author generated this text in part with GPT-3, OpenAI’s large-scale language generation model. Upon generating draft language, the author reviewed, edited, and revised the language to their own liking and takes ultimate responsibility for the content of this publication.