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Understanding the True Costs of a Construction Project

Determining the cost of a custom home or remodel is a complex exercise involving many different variables. Far beyond the idea of a simple "cost per square foot", factors such as the design of your project, the materials used, and the quality of the construction combine to determine the real costs.

Consider these general areas for understanding the true costs of your project:

Size of Your Project

Cost per square foot is not equal throughout a house. The cost per square foot of a family room addition is much less than the cost per square foot of a kitchen. A small house may cost more per square foot than a large house because the small house has an expensive kitchen in a more compact overall design. While size is the most obvious cost factor, the costs are relative to what the square footage contains.

Complexity of the Structure

The more complex a structure is, the harder it is to build, and therefore the more it costs. In some instances, complexity may be unavoidable, such as building on steep sites where it is obvious that both additional labor and materials will be required. In most cases, however, basic design is the biggest determinate of complexity. A design that is aesthetically pleasing and functional, yet simple to build, will be much less expensive than a structurally complex one. Complexity at a level that makes sense for your budget, neighborhood and tastes is appropriate and desirable.

Quality Achieved Through Appropriate Materials

Your choice of materials will dramatically affect the overall price of your project. If you are on a tight budget, the key to saving money in the long run is to choose simple materials and fixtures of good quality. Formica is a simple and durable product which can function just as well as granite. However, a cheap shower valve that bursts inside your wall after the warranty expires will end up costing much more than the initial cost of a high-quality fixture. Be careful of what you buy and its place of manufacture; in most cases, you get what you pay for.

Quality Achieved Through Craftsmanship and Good Project Management

There are major differences in the quality level and capabilities of contractors. Although no one wants to pay too much, there are just as many horror stories as success stories in the construction arena. Before hiring a contractor, carefully check them out. Visit some of their projects of a comparable size and scope to yours and speak with their previous customers.

Contracting today involves much more than pounding nails; your contractor is also your money manager. Usually, a substantial amount of your money is invested through him or her on your behalf and you want someone who will do this honestly and wisely. Therefore finding a contractor with good management skills, and good relationships with dependable high quality sub-contractors is key to a successful project.

Site and/or Existing Structure Issues

Building on waterfront, steep or tight lots, and environmentally sensitive sites will bring higher associated costs to the project. In these cases, access for equipment and material deliveries becomes complicated and adds to the cost of labor.

Time is Money

The longer a project takes to build, the more expensive its carrying costs will be. If you are striving to control costs, you will do well to acquire an efficient contractor to build a sensible, straight-forward design.


The jurisdiction in which you build may contribute significantly to the overall project cost. Some jurisdictions are more expensive to design and permit for than others.

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