4 Ways to Save $100k on a Custom Home Build

This not a clickbait article. There are real decisions that you can make to save well over $100,000 on a custom home build. It may involve some sweat equity, but it will be worth it in the end. 

The average sales price for new construction houses last year (2022) was $540,000 (US Census Bureau Data), so we'll use that as a benchmark for our cost savings. 

1.) Modify Stock Home Plans Instead of Hiring an Architect:

Professional architects are artists, but commissioning their work can come at a steep cost, typically ranging from 5% - 15% of the total construction cost. Conversely, purchasing stock house plans and having them modified almost always costs around $1,750 which is around half a percent of a typical build cost. The benefit of choosing a stock plan is that you can filter through thousands of home plans and find exactly what you want. 

5% Arch. Fee X 540,000 = $27,000 - $1,750 (stock plan) = $25,250 Savings

2.) Pick an Efficient Floorplan:

Since the cost to build a house relates pretty strongly to the square footage, it's important to ensure that every single square foot adds value to your family's needs. Avoid houses with excess hallways, walk-in closets and unnecessary circulation. When shopping for floor plans, look for wasted space and rooms that you don't absolutely need. Consider phasing the construction if, for instance, you know you will need additional bedrooms in 5 years but don't need them right now.

Here let's assume that we pick a plan that eliminates one hallway, and opts for 3 reach-in closets instead of walk-in closets. 

~140SF Saved X $150/SF = $21,000 Savings

3.) DIY Select Finishes:

There's little that can be done DIY outside of your General Contractor because a Certificate of Occupancy (CO) will not be issued by the local building department until all of the major aspects of the build are complete. But some, non safety related aspects can be delayed until after the CO:

a.) Interior Painting: Painting is a fairly easy skill to acquire and since most of the cost of hiring a professional painter (typically $10,000-20,000) is labor it's an easy way to trim the budget by substituting your own labor. We recommend watching some Youtube videos of professional painters to pick up some tips and methods before starting. You can rent professional spraying equipment from a tool rental, but it will require multiple people.

$15,000 Pro Painting Cost - $500 Tools - $1500 Paint = $13,000 Savings

b.) Landscaping: Similar to painting, landscaping can be labor heavy aspect of the the build that you can easily substitute your own labor for. You probably won't save a ton of money planting grass but you may save quite a bit by planting trees and garden beds DIY. Try commercial greenhouses if you need to buy in bulk!

1/2 Acre X $0.20/SF Pro Seeding Cost - $200 Grass Seed = $4,200 Savings

4.) Don't Skimp on the Design:

General contractors are notorious for underbidding jobs with the intent to overcharge customers on change orders or additional scope. Since home construction can be a very complicated endeavor which often results in mistakes or omissions, it's vitally important to ensure that you construction documents (floorplans & specifications) are 100% ready to build without needing changes down the line. There are two main things to watch out for:

a.) Design Changes: It's takes home architects many years of training to be able to visualize how 2D plans will look in real life. Many homeowners don't have the benefit of the same experience. As a result, often times homeowners will end up making design changes as the home is framed because when they first walk the house they get see things that they don't like. That's why we recommend only buying plans with video tours and 3D interactive tours so you can get a better sense of proportions and scale before your new house is framed. 

b.) Design Omissions: Occasionally, the home design or specifications will omit some key aspects that end up needing to be added in order to finish the house. Often times this is either early or late in the construction process (sitework and finishes respectively).

According to our construction management platform, the average total for change orders in new construction homes between 2019 - 2020 was about $36,800 per home. 

Eliminate Change Orders = $36,800 Savings

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