Custom homebuilding and architects

Custom homebuilders typically employ architects who will study the plot of land you've purchased and then design a home from the ground up using your specifications.

The plan designed will be used once — just for your home — and because you're starting from scratch, the only limiting factors are budget and the requirements of your local municipality.

You have several choices when it comes to building a custom home: purchase a plot and then hire separately an architect and a home designer, or hire a building company that specializes in client-driven designs.

In addition, make sure to check up on any builder you hire because many custom companies are small, doing only a few houses a year. Accountability and communication are key to getting your money's worth.

Unique floorplans

Costs for unique floor plans will be reflected in two ways. First, every change you make will necessitate a new drawing of the home, which in turn must be approved by your municipality before work can begin. In addition, these changes will affect your material cost. Even reducing the size of a room or removing a window can increase costs, depending on what other systems in the home are affected.

Builders who offer custom floor plan designs can also provide solid advice about changes that will positively or negatively impact the function of your new home. For example, an extra door that looks good as an artist's rendering may limit sight lines in a family room, while removing a wall for a more open concept may come with extra costs if it requires an engineered beam to support the home's structure.

Contractors and subcontractors

Custom builders typically interact with their customers on several levels. Typically, you'll first meet the design expert or architect, who helps create the concept for your home and gives a general estimate of costs and time line. Next is the project manager, who is tasked with overseeing company efforts at the building site. Usually this is a single person for the length of the job, from breaking ground to the final touches.

The project manager liaises with the builder's general contractor, who is responsible for managing all the tradespeople who come into the home, along with scheduling tasks for completion. They may take part in some tasks such as framing or dry walling, but their most important job is finding experts for each aspect of your home's build. This runs the gamut from hiring subcontractors to dig out your basement and pour your foundation to bringing in electricians, specialists to install the plumbing and workers to do the painting. All money owed to subcontractors will be paid by your builder, and you, in turn, pay the builder directly.

Land servicing

Land servicing includes connecting your drains to sewer lines, water lines to mainframes, and power lines to the local grid. To do so, your builder must contract out this work to approved local providers who can meet city specifications for service hookups. Once their work is complete, it must be signed off by city inspectors before any more work can be done. At best, an improper service hookup can increase the time for your home to be completed; at worst, it may pose a hazard.

Green power options

Solar technology involves attaching panels to the sides or roof of your home to capture and store sunlight as electrical energy. Residential-grade panels are approximately 30 percent efficient, meaning 70 percent of their energy is still lost to heat. As a result, it can be costly to install a solar system to power your home.

If you're interested in solar options, start by talking to your builder. He should refer you to an expert, who will ask how much of your energy cost you want to defray. To figure out what you can afford, start by approximating the amount of energy you'll use in your new home in kilowatt hours (kWh). You can ask neighbors or use city websites to find an average cost. The solar provider should then be able to quote you prices for several systems. While the total varies widely across the country, a mid-sized system generating 800 kWh will cost approximately $10,000.

Geothermal heating is also an option. This method uses a heat pump or heat exchanger attached to pipes buried in the ground near your home. The exchanger magnifies heat trapped in the surrounding earth, and uses it to warm (or cool) your home. These systems are more expensive than solar units — think $40,000 or more — but can save you up to $1,500 per year in heating and cooling costs.

Cost to build a home

Start by contacting local builders, who should be able to tell you how much they charge per square foot for construction. This estimate is a baseline: It will cover only basic features and may not include all materials necessary to complete the work. Ask exactly what the price per square foot covers and how extra charges are assessed.

Next, seek out new homes being sold your area that are similar in scope to what you want. Take the average price of a lot, subtract it from the price, and divide by the square footage to get an approximate cost per square foot. Compare this to what builders have offered you.

The cost of your new home will, on average, run 10 percent over the estimated price. Reputable home builders should tell you this and advise you to keep a contingency fund on hand for increases in material costs, a downturn in the market or acts of nature.

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