There’s a certain thrill to building your new home from scratch. A home that’s designed around you and the needs of your family, and that has been created just for you. By designing your new house, you can ensure that it perfectly suits your family’s lifestyle, and the design matches your tastes and preferences.

Often one of the first questions people, who want to build a new home, ask is: How much does it cost to build a house?

The answer is not so simple, because of everything that goes into home building and the different choices buyers make along the way. The total price also varies greatly depending on where you want to live. For instance, just the cost to purchase the land to build a house on will vary widely depending on whether you buy a lot in a new home community, in downtown Calgary which involves demolishing an existing house, in a small town around Calgary, or on an acreage.

To better explain how new home builders arrive at a price to build a house; we’ll breakdown the costs.

The Main Costs to Build a House

After looking at a number of new homes and resale homes, it soon becomes obvious that homes with a similar number of bedrooms, bathrooms and square footage can vary greatly. There are homes that are poorly built and others that have the latest designs and high-end materials and finishes. So, it’s hard to give an exact average cost and price to build a house in terms of price per square foot.

However, we can look at each of the main components to building, which can explain how a house is priced. Here are some of the main factors involved:

• The shell of the house, which includes walls, windows, doors, roof, siding, and the style or elevation of the exterior can account for a third of the home’s total cost.
• Interior finishes such as flooring, tiling, cabinets, countertops and more can amount to another third of the budget.
• Mechanical systems, like plumbing and heating—accounts for around 13%.
• Kitchens and bathrooms are the most expensive rooms to build, especially with the cost for finishes like cabinets and countertops. If you’re looking to save money, you may want to choose different finishes or ask yourself whether you really need three full bathrooms, or if two and a half-baths will do?
• Architect and engineer drawings, are generally charged on a cost per square foot basis with a limited number of revisions. If you’re dealing with a new home builder, then these costs are typically included within the price of a standard plan, but any customization will cost extra. Fully custom home designs will be charged at the firm’s standard rate, and the rate will vary depending upon the expertise and skill of the architect and/or engineer.
• Excavation and foundation work to prepare the site for the contractor to start building on.
• Municipal permits such as building permits and soil tests will need to be purchased, and inspections and appraisals will need to be done.
• The cost to purchase the land that you’re building on. If you buy your lot separately, expect to pay more. In Calgary, lots can be difficult to secure and vary widely depending on the location and size. Buying a builder-owned lot can save you time and money.
• If the land you’re building on isn’t part of a new community development, then you’ll need to have it surveyed, graded and ensure it has services, like electric, gas, connecting it to a water source and sewer system.

Working with Home Builders and Developers

In Calgary, communities are typically setup and designed by development companies. Developers will carefully plan, facilitate and build spaces known as new home communities. They work with local governments, builder contractors and residents to develop the land and create neighbourhoods that appeal to different types of families at different stages of their lives.

Within each community, there are a number of contractors for each type of residential property. For single-family homes, there will be a few new home builders who home buyers can choose from. Each new home builder will have a variety of plans, also called models, already pre-drawn that will work on a number of different lots in that phase of the community’s development.

The kinds and amount of customization that you can do to the models will depend on the builder. For instance, the cost for upgraded finishes, such as countertops or flooring will first depend on the builder’s base specifications, and then depend on the quality of the upgrade. For alterations to a standard plan, the cost will also vary depending on how the builder charges for those changes. It is important to note that not all builders will allow home buyers to make changes to a plan.

Overall, the savings of building with a home builder in contrast to a self-build custom home are in the range of 15 percent.

Building your own home is rewarding, and allows you to move into a home that is perfect for you. The final cost to build a home will depend on the size, location, type and whether you choose to upgrade any of the finishes and customize the plan.