How To Establish A Budget For Your New Home
How much should you really be budgeting to build your new home?
You might think establishing a budget for your new home is all about the amount your bank is willing to loan you… Or maybe you’re checking the prices that are being advertised by the volume builders…
But the thing is, there’s a lot more to it than that. It’s easy to get caught up in the slick marketing and have your expectations raised only to suffer heartbreak and disappointment later in the journey.
However, when you work with a professional builder from the beginning, you’ll have access to the expertise and advice you will need in order to create a home that meets your expectations and your budget.
There are many elements that need to be taken into account before deciding on the budget for your new home. Working with a professional builder ensures that none of those elements are missed.
80% Of Home Designs Are Never Actually Built
The reason for this is because most consumers assume that they need to get the designs drawn up before they approach a builder. Only to find out the designs created will cost much more to build than they had bargained for.
So the trick is to work with a professional builder that understands the REAL budget required in order to include everything you would like incorporated in your new home.
They’ll work with you to establish exactly what you want from your new home, like the number of bedrooms and bathrooms, the standard of finishes and more.
They’ll compare your design to previous jobs they’ve completed so you have an idea of how much it will cost to build your new home.
Then you can establish your budget based on that figure.
Don’t Be Fooled By Unrealistic Starting Prices
Other builders, particularly volume builders, can give you false expectations of what it will actually cost to build your home. They’ll advertise ‘starting from’ prices that aren’t realistic. They won’t include important elements that need to be included when building a new home.
Instead, they fill up their contracts with allowances for important aspects of your new home. This ends up resulting in cost blowouts later down the track when the true cost of those allowances are claimed.
So don’t fall for the newspaper ad with a ‘starting from’ price. It might look appealing at first, but you’ll end up finding out the hard way that those prices aren’t realistic numbers to base your budget on.
Instead, work with a professional builder that can help you establish your budget based on exactly what you want from your new home. You might think that approaching your new build in this manner allows a builder to charge you more. But the truth is, market forces keep builders honest.
And while a professional builder’s proposed budget for your new home may be higher than what you’ve seen advertised or in display homes…
You can rest assured that everything will be covered in the budget up front so you won’t have any unexpected costs when your new home is being built.
If It Sounds Too Good To Be True, It Probably Is
Here are some ways that you can establish a realistic budget for your new home.
The most important thing is not to fall for the ‘starting prices’ that volume builders advertise.
If you go down that route, make sure you check the fine print and ensure every last thing needed to build your new home is included. Those advertised prices are attractive because they don’t typically include important elements that are required to build your new home, like foundation or floor coverings.
They’ll either simply omit these from the advertised price, or they will be covered in allowances which are typically never enough. To avoid this, you must work with a professional building company that specialises in custom homes rather than sales people working for volume builders, who at the end of the day are only interested in their commissions.
Professional builders will work with you from the beginning to help you create a budget for your new home. Everything will be based on exactly what you want from your new home.
Having the knowledge of how much it costs to build and being able to compare your project to previous jobs, professional builders will be able to give you an idea of what it will cost to build the home that you want.
Which leads to my final tip, you must create your budget from your design.
Not the other way around.
It doesn’t matter if you are building your first home or if you have built many times before…
Designing a new home can be very overwhelming and when you hear new things for the first time, it’s not easy to remember everything. So that’s why we’ve put together a quick guide for The 7 Things You Must Know Before Designing A New Home.
It’s completely free, and it will help you to keep your design on budget and avoid any nasty surprises that can sneak up on you when building a custom home.
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