If you are building a custom home on your land in Boise, chances are you’ve done thorough research into the cost of building a custom home in Idaho and your custom home financing options. However, building a new home, as with any new construction project, can come with unexpected costs. These might be items you didn’t realize were not included in your build contract or they may be due to factors outside your control, like the weather or additional trenching required because of the location of your house on your land.
As a custom home builder in Idaho, our goal is to help prepare you for ALL of the costs you can expect or may encounter when building a custom home on your land. This list includes the hidden costs of building a custom home created from our years of experience in the field. These are the items we see most often forgotten or, less frequently, but potential costs that you wouldn’t necessarily expect if you are building for the first time or you didn’t encounter when building previously. Hopefully, you can use this information to more effectively budget for your new home build so you can stress less about the hidden costs of building a custom home and enjoy the homebuilding process even more.
Hidden Costs Of Building A Custom Home
- Land Preparation
- Permits
- Utilities
- Closing Costs
- Change Orders
- Landscaping
- Moving Costs
Let’s jump into the details for a better understanding of these hidden costs of building a custom home on your land.
1. Land Preparation Costs
Land preparation costs are one of the top hidden costs of building a custom home. They can vary widely depending on the size of your land, the location of your land, the location of your house on your land, the vegetation on your land, and more. This is why land preparation costs often add up quickly. Here are a few things to consider when determining your land preparation costs.
Site Grading
On some properties, the land itself may need to be reshaped, or leveled in order to build your home. This may require the import or export of dirt and the cost for the service of preparing the land.
Road Access
Similarly, you’ll need to be able to access the location on your property where you plan to build. Creating driveways or roads to your property can involve significant costs, especially if the land is sloped or requires special materials. Where you build on your property can certainly increase the cost of road access if it is further from the current roadway.
You’ll also want to consider that during the home construction phase, you’ll need to be sure that any access is suitable for construction equipment which can entail larger or heavier vehicles versus a standard passenger vehicle.
Tree Removal & Land Clearing
If your property has lots of vegetation or is heavily wooded, you’ll have additional cost for land clearing before you start building. Tree removal costs in particular can be quite high – running in the thousands, especially if you have many trees to remove or if the trees are large.
For more detailed information on land preparation take a look at these preconstruction considerations when building a custom home on your land.
2. Cost of Permits
Depending on your municipality the cost of building permits will vary. You may also need more than one permit. For example in Idaho, where we build, you may need irrigation district approval or highway approval, before you start construction. All of these permits can start to add up in cost. Before you start building, talk with your local planning and development office to find out what permits you’ll likely need. You can also talk with your local home builder as they may already include permitting in your contract cost. If not, they’ll likely be able to give you an estimate of what the permits for your project are likely to cost. Planning for permits is essential in avoiding what may otherwise be one of the hidden costs of building a custom home on your land.
3. Utilities
Utilities in general are one of the items that can have widely variable costs and are likely to include a few surprises. Utilities can have a significant impact on the cost of building your custom home so understanding what these utility costs may be will help you create a more realistic budget when building on your land.
First and foremost, if your land doesn’t yet have any utility hookups, this can increase your cost. Hidden utility costs of building a custom home on your land include things like temporary power during the build process, covering the cost of connecting to city water, and installing a septic system. All of which are going to increase your utility costs.
One of the top hidden costs of building a custom home is that you may also need to extend your utility connections depending on where your home is located on your property versus the current connection point. This may require an added cost for additional trenching. Although this isn’t uncommon in our area, it’s an often forgotten cost that you’ll want to include. If you need help budgeting for additional trenching for utilities, we’ve included this as an upgrade in our instant quote tool on all our house plans, so you can instantly see just how much utility trenching may cost you.
For those properties that aren’t connected to city water, you’ll need to factor in the cost of getting connected or installing a well system for your water needs. You may also need a water softener system, which can all really add up if you weren’t expecting this cost.
One other common utility-related cost you’ll want to keep in mind is the cost of a septic system if your lot is not hooked up to a sewer system already. This system can add several thousand to your home building costs, so it’s well worth knowing in advance if this is something you need.
4. Change Orders
A change order refers to a change to some aspect of your home construction AFTER construction has started. This includes changes to the design or the materials you want to use. For example, if you decide to swap luxury vinyl plank flooring for hardwood or add-in pre-wiring for ceiling fans in every room, these changes to your plan will cost you more than if you had decided to include these options in your original plan.
Why? Because once your home is under construction your home builder has already accounted for the materials cost, contractor time, and scheduled construction based on your original plans. Changes create more work and potentially material cost and contractor costs have changed, so these also need to be incorporated everytime a change order happens.
With diligent planning during the design process, you can avoid having to make change orders and lower or eliminate this hidden cost of building a custom home.
5. Closing Costs
Closing costs may or may not be relevant depending on your specific custom home building situation. If you already own your land, you don’t need to worry about any closing costs with your land purchase. However, if you haven’t yet purchased the land you will be building on (check out our tips for finding land to build on), you’ll need to factor in the closing costs of your land purchase. These costs will vary but can run between two to five percent of the cost of the land. Considering the cost of land in the area, land purchase closing costs are likely to be in the thousands. A few other fees you’ll also want to remember to include are any land surveys, title searches, and other legal fees associated with your purchase.
Depending on how you’ve chosen to finance your custom home build you may also have closing costs when your home construction is complete and you are converting from a construction loan to a traditional mortgage. These closing costs can also range between two and five percent. If you’ve opted for another type of construction loan like a construction to permanent loan, then your closing costs for the converted loan are most likely already included with your initial loan so you won’t need a separate line item in your budget for this once your home construction is complete.
As with any home purchase, whether you are building versus buying a house in Idaho, you’ll need to factor in the closing costs. With everything else that goes into building a home, this cost is often overlooked in the custom home building budget.
6. Landscaping
Building a custom home is often focused on your indoor living space. How many square feet do you need? Do you want a single HVAC system or two systems? How many bathrooms do you want? What can you do to build an energy efficient house? Outdoor spaces tend to be left off the list unless maybe you are considering your home’s siding or the look of your front entryway.
What is often overlooked and can be a fairly large hidden cost of building a custom home, is your landscaping. Most of the time you don’t want to move in and look at dirt for the first year living in your new home. Landscaping is an important cost to consider when building a home on your land. Landscaping costs can vary dramatically depending on what you want and how large your landscaped space will be. Some home builders will include landscaping as an add-on to your home build; however, you’ll want to be clear about this from the start. Ask your home builder if they have an option to include landscaping and determine what that entails. If that option isn’t available, you can talk with landscaping companies to get an idea of what it will cost to landscape your space in the way you want.
At Pathway Builders, our focus is on value and affordability for our customers, which means we leave landscaping out of the cost of your home build so that you can find an option that fits your needs and budget best. This gives you the flexibility to wait a little longer to landscape after your home is complete to space out your budget if you want. It also allows you to work with a landscaper you choose or to take care of some elements of landscaping on your own to make landscaping your home more affordable.
7. Moving Costs
When you are in the process of building a custom home there are so many other things to think about that the actual move from your old home to your newly built home. However, moving costs can add up, especially if you are moving from a location out of state or even across the country.
When budgeting for your new home, don’t forget about the costs associated with your move. Add this into your budget from the beginning so that your final move is about the excitement of finally getting into the new home you’ve designed and built custom for you!
Home Building Contingency Funds
As much as you can plan and research to make sure you have included all the hidden costs of building a custom home, with any building project there will inevitably be unforeseen costs during the process. These will often arise out of things that are outside of your control like weather events delaying your build schedule or a shortage in the materials needed, which is why we recommend including contingency funds in your home building budget.
In our experience having a minimum of 5% of your build cost as a contingency budget is a great way to be prepared for these types of unforeseeable circumstances; however, you may choose to have a little more set aside. Over the past several years, having a higher contingency budget was a good idea given the abnormal supply chain issues. If you need a recommendation on a contingency budget for your build, you can always talk with your home builder for their recommendation given the specifics of the home you are building, your land, and your location.
Conclusion
These hidden costs of building a custom home are a few of the most often overlooked costs when building on your land. Although there are always unforeseeable circumstances that can change the cost of your custom home build, understanding everything you are responsible for or may be responsible for and planning accordingly can help you be better prepared financially for any costs that may arise.
Working with an experienced local home builder can also be immensely beneficial when budgeting for your build. So be sure to talk with your home builder about the costs you might incur so that you have a complete understanding of what to expect before you start building. This will make your custom home building experience so much better.
If you’d like to talk with someone about building a home on your land in the Boise or Treasure Valley area, contact us. We’d love to talk with you about building your dream home. You can also learn more about our building process or take a look at our custom home plans and get an instant quote on the cost to build your dream home on your land.