How much does it cost to build a new house?
Building a custom home is a big investment, especially when you’re trying to achieve a unique vision that reflects your personal style and needs. Planning the perfect design will require the help of a skilled architectural team, in addition to a general contractor.
This is something many homeowners forget to account for when they make their initial budget estimates. A large number only consider the cost of construction, and not all of the other essential services. Such an oversight inevitably leads to shock when homeowners receive quotes from the professionals.
To help you avoid this kind of surprise, we’ve compiled a basic breakdown of the total costs to expect when building a custom home from the ground up, including architectural services, consultant work, and construction. Drawing up your ballpark estimate based on this list will give you a far more accurate idea of expenses, allowing you to plan appropriately as you begin establishing your design.
1. Consulting Costs:
Consultants are enlisted as early as the Due Diligence phase to obtain critical information needed to plan your build. The cost of hiring consultants remains relatively consistent regardless of the project budget, so we provide them in dollar amounts rather than percentages.
2. Fixed Architectural Service Fees:
Fixed fees are typically charged for services such as Due Diligence, Conceptual Design, Schematic Design, Design Development, and Construction Document creation. The cost can vary depending on the scope of the project.
While it’s not the most accurate pricing method, many firms do base their architectural fees on construction costs. Making estimates this way can be a helpful reference tool, but it should not be your sole guideline. Provided that your project does not entail unusually laborious or otherwise noteworthy points of architectural work, you can expect your architectural fees to roughly align with the following numbers:
- $350,000 – $500,000: 15% – 20%
- $500,000 – $1 million: 9% – 15%
- $1 million – $2.5 million: 6% – 9%
- $2.5 million+: 5% -6%
3. City Fees (Plan check + Permit Fees):
Your architectural team will liaise with local authorities to obtain all of the permits and approvals you need to proceed with your build. This typically amounts to 1.5% - 2% of your total construction cost. That said, if your project requires complex approvals, hearings, design review boards, or exceptions to by-right zoning codes, this number can rise to 10% or more of the construction cost.
4. Additional Hourly Service Fees:
Hourly fees are typically charged for interior design services, plan check expediting, and construction administration. Your fees here will differ depending on the details of your project, and how much you are personally involved in the process. Generally, the charges for hourly services will amount to 3% - 10% of your construction cost.
Construction costs are strongly affected by your lot’s features, the work required to prepare for building, and the unique specifications of your design.
Generally speaking, you can expect construction to cost $425+/- per square foot on average, including finishes and fixtures. If your lot requires some significant modification to accommodate your build, or you are incorporating unusual architectural installations and higher-end materials, you can expect your costs to be higher.
Let’s say you’re planning to build a home that will be a bit over 2,000 square feet. With high-end fixture selections and some moderate preparatory site work, the construction costs alone are expected to reach $1 million.
The expected architectural costs would then amount to about 18% of the construction costs, totaling $184,000. This consists of the following architectural fees:
- Consultant Costs: $19,000 +/-
- Architectural Fees for Basic Services: 8% (around $90,000)
- City Fees: 1.5% (around $15,000)
- Fees for Hourly Services: 6% (around $60,000)
All-in project total: $1,184,000
The Design-Build Difference
At Letter Four, we offer both architectural and general contracting services. However, our specialization lies in delivering them through the all-in-one experience that is the Design-Build method. Using Design-Build as our main approach helps us provide the most cost-effective, high-quality results, fulfilled by a single team from start to finish.
By integrating the design and construction processes, Design-Build streamlines your entire project. Communication is simplified, minimizing misunderstandings and costly changes. As a unified team, our architecture and construction planning is harmonized from your project’s inception. Accurate cost projections are calculated early on to help you make informed decisions within your price range. This collaborative workflow allows us to establish a balanced scope and budget that yields the best possible outcome.
Once work begins, Design-Build gives you peace of mind in having one firm managing your entire project, coordinating subcontractors and scheduling, while conferring with the designers to make sure all work matches your plans. Efficiency is improved and downtime is reduced, saving money by shrinking overhead costs and ensuring timely completion. From start to finish, your custom home’s design and construction is managed in a way that maximizes affordability.
Achieve an Artful & Cost-Effective Custom Build with Letter Four
At Letter Four, we specialize in providing comprehensive architectural design and construction services to homeowners who want to build truly remarkable custom homes. With over 12 years in business, we are dedicated to creating unique and inspiring dwellings that are made to endure. Our Design-Build process allows us to strike the ideal balance in value, getting your project built on time, on budget, and on point in all of your design expectations.
If you’d like to explore your options, we highly recommend starting with our Project Planning Pack. This comprehensive pre-planning guide will teach you what to expect, and provides guidance in choosing the right design features for your budget and needs. Ready to talk it over with our experts? Book a call and let us know what you have in mind!