Six Keys to Managing the Cost of Building Your Own Home
The Cost of Home Construction in California Can Add Up Very Quickly
Being Disciplined About Your Decision Process Can Mean the Difference between an On-Budget Project and an Over-Budget Project
I'm often asked about construction costs and the cost of building a new home. A great many things influence the cost of construction, yet not a single one of them stands out as an area for great cost savings. When home construction budgets go wrong, it's often “death by a thousand cuts.”
Managing construction costs for your new home comes down to managing your expectations and making wise choices throughout the entire design and build process.
There are many ways to control costs when designing and building a new home – yes, even when that new home is in California – but it all starts with being clear about what you’re getting into from the start.
Build your New Home Team
As the client and sponsor of a custom home design project, it's your job to manage your own expectations and the decisions that stand between you and your ideal home. Of course, with limited understanding of the industry, the choices before you–and the impact they will have on costs of your new custom home–can quickly become overwhelming.
You need a trusted advisor in the process, someone whose goals are aligned with yours. This person should be your architect. From translating your ideas into a concept and adding the expertise to make it more than you imagined, to managing the details of materials, planning, permitting, and working with your builder to deliver your home as designed – your architect is your eyes, ears, and voice throughout the project.
Designing and building a custom home in California takes time. You can expect to be working with your team for about two years, maybe more. Start by finding the architect you can feel comfortable with over the life of the project and who you can trust to work with you on big decisions. Your architect can help you find and select a contractor, or refer you to builders they have had positive experiences with on similar home projects.
Your team is key to getting the home you want. Their experience and expertise will cut through challenges, simplify complicated steps, and help keep your project on budget and on track. It is well-worth the time and money to invest in your team at the start.
To paraphrase a common quote, "if you think hiring a pro is expensive, wait till you see what it costs when you don't."
Values Matter: Understand the Home You Want
Truly Understanding What You Value Most Can Help You Refine Your Vision and Define Your Budget.
Our Modest but Beautiful Berkeley Hills Home
This relationship between expectations and choice is really an issue of value. What is valuable and what is not? Value in this case, is in the eye of the beholder, you, the client. And ultimately it's about what sort of experiences you value most. I'll call this sort of value, “experiential value.”
But what if you've never built a house before? How would you even know which are valuable ways to spend your money and which are not? Here's where some real soul searching is required. While you may have never built a new home before, you're certainly lived in homes before. And so within the limits of your experience, you already know what you're attracted to and what you like. You've also visited other peoples' homes, been to restaurants, museums, etc., and so in truth, you really have lots of experiences to call from.
What are your deepest values, the ones that will matter to you in your new home? Do you care about sustainability over all else? Maybe you loathe doing maintenance or never want to have to paint your house, ever. Perhaps you care most about a kind of gracious spaciousness, a characteristic common in historic English manors? Maybe you love fine materials and/or elegant details.
Sorting out what you care about most, early in the process will help you to make the right decisions.
After all, a custom home is just that, custom. Every aspect of it can be tailored to your sensibilities and to your budget.
Site First
Location. Location. Location is the big decision that will impact your new home design and construction at every step in the process.
The major variable in designing and building a custom home is the site of the home. Location is a significant factor for many reasons and will influence the entire process from design inspiration to completed construction. The specifics of your property also have a huge impact on the costs and timelines for your custom home project.
The initial steps in your new home construction project will vary from one type of site to the next. For example, whether you intend to build on an undeveloped piece of land or start with an existing home property, there are distinctly different considerations for planning, design, and construction.
Site selection ultimately plays a role in every aspect of your custom home build, from permit approvals to where you park your cars.
Choosing your home site is that first major decision you truly want to get right.
As you review the potential of your location or compare various locations, consulting with your architect to review the site(s) will provide you valuable insights and direction before you make a major decision that will have long-term impact on your overall home design and project costs.
Size Matters
When It Comes to Sizing Your Home (and All the Rooms within It) You Want to Nail the Goldilocks Principle (Not Too Big, Not Too Small, Just Right).
Once you've sorted through the many choices that will influence the character of your home: Materials, fixtures, hardware, finishes, details, etc., how else can you influence the cost of your build? Better still, before you start choosing bathroom tile, take time to honestly assess the size of your new home and your needs and wants for the space.
Because of the aggregate nature of construction costs, size matters more than anything. The more area you build, the more your home will cost. Imagine one square foot of building area. Extruded through your entire project, this area will be made up of foundation, waterproofing, framing, interior finishes, exterior cladding, etc. You can see how the materials and thus the cost of every square foot can add up quickly.
In general, construction costs are so evenly spread over such a wide range of sub-categories, the simplest and greatest impact one can have on the cost of your home is managing its size. Say you're designing a 4,000 square foot home at $600 per square foot of construction cost. If your list of spatial requirements can be cleverly made to fit within 3,500 square feet of space, you've just saved yourself $300,000 in construction cost!
Of course, not all areas of a building are created equal and as such, not all areas will reap the same kinds of cost savings. Cutting back on space that reduces exterior wall area or other costly parts of the home (bathrooms or kitchens) will add up to the greatest cost savings. You can begin to see how balancing your wants and needs with the overall building area makes for a delicate and important calculus.
Much of the time, this sort of cost “shaving” can be done relatively painlessly. By taking 8 inches off the width of this room here or 12 inches of the length of that room there, one can have a great impact on costs with virtually no sacrifice.
For this reason, it's very important to be sure that your architect provides an accurate, to-scale furniture plan, showing precisely how each room and its furniture lays out. Only when your floor plan is fully furnished, can you accurately assess whether there is any area savings to be had. Without a furniture plan you're guessing as to the right size for each room and are likely oversizing (or undersizing) the entire house without even knowing it.
Simplicity Wins
Complexity Requires Labor to Execute. Labor Is Time and Time Is Money. Keep It Simple and You'll Save in More Ways than One.
In this case, let’s consider simplicity related to how much and what type of labor will be required to build your home. By simplifying both the overall shape and configuration of your home, as well as the many details that help it come together as a beautiful composition, you will likely cut down on both the skill level of the labor required to build your home, as well as the hours of labor needed to do so.
Certain aspects of this simplicity principle will be visible to you as the client. In particular, the simplicity of the form of your home will be obvious to you, and you have direct influence over elements and decisions that support this simplicity.
However, most aspects of creating simplicity are hard to see and sit squarely in your architect's lap. It's their responsibility to consider material choices, assembly sequencing, and the means, and methods by which everything will be put together. Done wisely and in communication with your general contractor, your architect can use the principle of simplicity to both amplify a design and manage costs.
The AHA Matters
Ultimately, How Your New Home Works and Feels Is What Matters Most. These Goals Are Achieved Not through Great Expense but through Great Design.
Courtyard Rainwater Runnel at Our Berkeley Hills Home
How will your new home work?
Will it have the right amount of the right kind of space for you, your family, your stuff? Will it be the home that makes it easy to create great memories and design your future?
How will your new home feel?
Will it inspire a sigh of relief to walk in the door after a week on the road? Will it take your breath away as the morning sun streams into the room while you make your first cup of coffee?
Most of all, will your home continue to deliver the Aha, truly work for you, and maintain great value – financial, functional, and emotional – over time?
If the home design and construction process is too focused on short-term cost cutting, bad decisions can lead to disposable, cookie-cutter homes devoid of any Aha but filled with problems that can outlive the structure itself.
I believe architecture must strive for perfection. Whether the project is small or large, my pursuit as an architect is to "get it right" and deliver great, lasting value with every building I design. This means making the best decisions based on the true value to the project, not only in costs, but in impact to the ongoing, long-term feel and function of the home.
While we have experience designing for clients with very generous budgets, great architecture has never been dictated by budget. There is instead an ineffable, eye-opening, Aha moment that comes when what could have been a mere building is instead crafted into architecture, big budget or not.
Ready to start?
Finally, designing a great building on a “normal” budget can be a very rewarding process, one that more often than not, delivers results with aha delight that surprises everyone involved–clients, architects, and builders alike.
If that's something that you or someone you know is seriously considering exploring, we would be happy to discuss the possibilities. Let’s talk!
