The key to developing a realistic building budget is to give yourself enough time to research home plans, make product selections, and find out what additional costs apply to your area. Before number-crunching begins, you must have a clear mental picture of your dream home. There are plenty of places to get ideas, including magazines and "parades of homes." Whether you're going to build from a stock plan or design a custom home, studying plans is a good way to determine how much square footage you need and what kind of house will fit on your lot.
Make a list of the products and finishes -- doors, windows, flooring, cabinetry, countertops -- you would like, and find out approximate costs. Once you've decided on what kind of house you want and have consulted a lender to determine how much you qualify to borrow, obtaining an estimated cost per square foot will help you figure out what you can afford.
If you're buying a stock plan, find out if the plan service will estimate the material and labor costs of building the home in your area. If not, your local home builders association should be able to provide average square-foot costs. Remember that the square-foot cost estimate is a very broad, general number that should only be used for guidance purposes. You won't know how accurate it is until the house is designed and construction bids are obtained.
Continued on page 2: Finance and Home Plans