Budgeting For A Custom Home Project

Based on the design fee structures outlined in this post, you can start budgeting for your custom home project. Things to consider include the cost of the land, the cost of construction, the cost of permitting, the design fees, and costs to furnish the new home. Assuming you aren't using cash for all of the project expenses, the cost of a construction loan would also come into play.

Here in Portland, Oregon we see typical construction costs for a new home start at around $350 per square foot and up. Of course this is just a rough estimate as there are many factors that can affect this project. Costs can go up dramatically based on the complexity of the land (building on a sloped site would cost more than a flat site), additional consultants needed (geotechnical engineers, surveyors, etc.), and the quality of finishes, fixtures, appliances, materials, windows, systems, etc.

Using a 3,000 square foot home as an example, you would be looking at a construction budget of approximately $1,050,000 (3000 x $350). Design fees of 10% would fall around $105,000. Land costs can vary greatly depending on location, but there are some lots in the general Portland area going for around $200,000. Permit fees can also vary greatly but I would use $50,000 as a general ballpark. Add in costs for furniture and decorations and a contingency fund, and a new custom home budget would probably fall around $1,450,000 and up.

A smaller sized house, lower cost of land, a simple flat site, and many other factors could potentially lower development costs but this is a good rough idea of where to start.