Depending on what kind of design you have and who you choose to go with for your custom home build, the prices can vary wildly. It is essential to get high quality builders who understand what you are looking for and who meet with your budget. The initial outlay here will be on the architect fees, who will be able to map out your design for the home. Once this is completed however, the quest will be yours, to find the best builders for your money. Here is how the pricing structure usually works for custom home builders.
Fixed Price Contract
A fixed price contract is most commonly used for custom builds. This process means that you will get a single cost from a construction company and this will take into consideration every aspect of the build. The firm will get bids ahead of doing the deal and they will cover every aspect of the custom construction. You will be liable for any changes which you make to the design, or upgrades, but the builder will cover the cost of any mistakes which they or a subcontractor makes. The benefits of this deal is that you only pay once for everything, you can expect minimal mistakes to be made and the builder will take responsibility for the large majority of the job.
Cost Plus Contract
A cost plus contract sees you pay the builder the actual cost of construction and then an extra amount on top which you will negotiate with the builder. Typically this will be a percentage of the home and custom builders generally look to charge between 10% and 20% of the total cost of the home. If you enter into this agreement, you will be responsible for any mistakes made or any material and labor cost changes which occur. This is generally the deal which builders will look to make when the overall cost of the custom property is difficult to predict.
What You Can Expect to Pay
More often than not the most expensive way to go about this pricing option is to have a fixed price contract, although it can often conclude in far better results with regards to the build. The reason for this is that the builder is taking on every aspect of the responsibility with regards to getting bids and to ensure that they are able to cover the entire cost of construction with the money that you have paid. The cost plus contract will often provide you with a slightly lower cost option, although for that you may end up facing quite a lot of ambiguity with the overall cost of the construction, and that can impact your ability to plan your finances.
The key areas to focus on when you are planning a custom home build is labor costs and materials, both of those aspects can change frequently and it is where the large majority of your investment is going to go. Always ensure that you make as few changes as possible during the build as that too will cause prices to change a great deal.