Breaking Down the Cost of Custom Home Construction

Published April 16, 2020.
Est. Reading: 4 minutes


You’ve decided to build your own home in Calgary and now you have to answer one big question: How much is it all actually going to cost?

At first sight, costing a project of this size may seem complicated and even insurmountable.

Once you begin to get into it, however, you’ll start to understand the difference between hard and soft costs, what your various selections mean to your budget and how starting with a broad costing and then narrowing it down as you develop your plan can really help.

Here we break down some of the most common cost areas when building a custom home and how they impact your overall budget.

Controlling your costs: How to budget effectively for your custom build

At Sunset Homes, we go through a three-stage process when helping our clients develop a realistic custom build budget.

The first is to look at the project through a broad spectrum such as where you intend to build, the type of home you are looking for and its size. From that, we will create a class 3 budget estimate of the cost based on our wide experience building similar projects.

The next stage is to begin to develop your concept and get architect’s plans drawn up. This gives us a more concrete proposal to cost from using our building specifications or standards, which is mid to high end. We’ll know the exact floor plan, the sort of materials you’ll be using in the home and be able to narrow down the budget based on this information.

The final phase is to further refine your choices. For example, whether you want traditional hardwood floors or engineered hardwood floors will have a cost implication. At this stage, you should be reasonably confident that your budget covers everything it needs to.

Check out our blog: 3 Steps to Create the Final Budget for your Custom Home in Calgary.

Soft vs hard costs

Soft costs are those that are not immediately visible when it comes to home construction. As a very general figure, these will be around $50 per square foot for your custom building and will include:

  • Architectural and design fees
  • Energy modeling
  • Survey and engineering fees
  • Off-site levy
  • Subdivision
  • Project management fees
  • Insurance
  • Demolition, development and building permits

There may be other soft costs depending on the type of property you are developing and its location.

Hard costs cover the physical construction of your property and are much easier to asses. They include:

  • All labor and materials costing for building the property
  • Demolition, excavation, backfill, foundation, framing, roofing, etc
  • Costs for installing or connecting utilities, water systems, drains, and as well as infrastructure such as paving
  • Costs for kitchen cabinets and tops, built-ins, and bathrooms and other interior design aspects
  • Costs for landscaping, sprinkler system, decks, putting in a pool, or other exterior work

Hard costs will make up the majority of your budget and may average out at about $250-$300 per square foot depending on the size and scope of your build.

When deciding on your budget, of course, it’s always important to give yourself some leeway for any unforeseen circumstances or delays. Adding at least 10% to your hard cost budget will ensure that you are prepared for this until we have completed the plans and selections, since at this time we can have the exact cost of your new custom home.

Check out our blog post: Calgary Custom Home Builder Tips to Keep your Budget on Track.

Getting your selections right

The materials you choose to build your house and everything that goes into it, from the bricks and mortar down to the screws and bolts are all selections. Most of these will have been discussed with your architect and incorporated into the design and specifications for your build.

Setting the appropriate budget may involve a trade-off between different mid-end and high-end selections.

One of the most common examples is the type of flooring you choose. Traditional hardwood flooring is attractive and a popular choice. It’s also a luxury end selection and relatively expensive. Switching to engineered wood, which looks elegant and is built to last, is a mid-end option which could save you a significant amount on our flooring budget.

You may, for instance, want to put more focus on how green your home is going to be. Sustainability is an important part of construction nowadays and many of our clients are looking for options that save them money but also have less impact on the planet. It’s one of the reasons we put such great store in being part of the Built Green program.

You might want to invest in a state of the art HVAC system or the best energy-efficient windows but are worried about the costs. This could mean a tradeoff where, for example, opting for engineered wood floors could save you enough in your budget to introduce the high-end energy-saving measures you ideally want.

The choice of selections is about balance and, hopefully, staying within budget while still getting your dream home.

Check out our blog series: Custom Home Builder Tips For Making Selections.

Why choose Sunset Homes for your custom build

Developing your project plan and applying this to your budget is an essential part of custom home construction. At Sunset Homes, we have a strong track record of delivering quality builds for our customers.

That starts with nailing down the plan for an individual property and then costing it effectively. That way, our clients know what to expect and are able to stay in control of their budget. We are open and transparent at all stages of the design and construction process which is something that all our clients have appreciated over the years.

If you have now decided that you want to build your dream house and are searching for a partner that can be with you every step of the way, contact the team at Sunset Homes today.

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