4 Tips to Help You Figure Out the Cost of Building a New House

If you are going to build a new home, you may be wondering how much it would cost you. This is a difficult question to answer as there are a lot of factors to take into account when figuring out the construction cost. Therefore, let’s take a look at 4 tips that can help you estimate the cost.

1. Determine Your Floor Plans

First of all, you should put together a floor plan. Some builders offer a lot of floor plans for their clients. Based on these plans, you can determine the quality, features, style and size you desire. This will help you lay out the base of the project.

Your next move is to look for the right builder. Make sure you work with an experienced builder. This is important for proper budget, timeline and execution of the build. With their assistance, you can calculate the cost to build a house.

2. Figure out the Costs Per Square Foot

It may not be realistic to figure out the exact construction cost, but you can get a ballpark idea. For this, you should get the total figure and then divide it by the number of square feet. Let’s take an example. Suppose your home measures 2,000 square feet, and the total cost of construction is $350,000. Now, you need to divide this amount by 2,000 to get a figure of $175.

3. Consider the features, Style, and Quality

The total cost of construction won’t depend upon the size only. You also need to consider the features, quality and style when making your calculations.

Style

Style determines the architecture of the building. If the available space is a square or rectangle, the construction cost will be less.

Quality

Quality depends upon the materials used for the construction. This may include a lot of choices, such as windows, doors, appliances, built-ins, cabinetry, shingles, insulation, paint and flooring, to name a few.

Features

Features include design factors like staircases, roof pitches, and vaulted ceilings. These additions are important and can have a great impact on the price tag of your new house.

4. Additional Construction Costs

While figuring out the cost, don’t forget to consider the primary expenses. Often, these are overlooked by many people. Given below are some of the most common ones.

Site Preparation

Site preparation involves clearing many trees and removing large rocks, for instance.

Permit Fees

Local restrictions, zoning laws and building costs should be obtained as well. Based on the area, know that these permits can cost a lot of money.

Time of Year

Time of year can also has an impact on the construction cost. When the cost of labor is high due to economic growth of low unemployment, the construction costs are higher. Therefore, you should consider this point when making your calculations.

Long story short, if you want to have an estimate of the total cost of your new house, we suggest that you follow these 4 tips. Hope this helps.

Lowes Garage Door Installation Cost Will Save You Money

Lowes Home Improvement stores are well known for their low prices and quality products. If you own a home you probably have used Lowes to find the products you need to improve, maintain or repair it.

Searching for and finding the right garage doors for your home can be a nightmare even if you use the Internet to conduct your research. The best garage doors available are frequently the most expensive however you should not use garage doors pricing alone to make your selection.

Your selection process should carefully consider installation costs, construction materials, removal of any existing door, type of garage door opener and warranty. Lowes garage doors installation costs are considered one of the best buys on the market today. Lowes installers are considered and called partners and they must meet Lowes strict standards. Every installation is rated by the purchaser to assure that customers are receiving the quality services they are paying for.

Lowes garage doors installation costs range from as low as $199 to $599 depending on the size of the door and where the door is being installed. Obviously installing an oversize garage door will require more skill and time. If you need to install a garage door opener as part of your installation you can expect additional cost. Over all the, Lowes garage door installation cost is slightly lower than the average installation costs.

As an alternative to purchasing your garage door from Lowes you should consider comparing prices and services with Home Depot. Both Home Depot and Lowes sell quality garage doors. Just as with Lowes Home Depot provides garage door installation services that are comparable. In addition you have the option of installing a garage door yourself. Both home improvement stores will assist you in your efforts. The downside of self installation is the time it takes to complete the installation and the cost of disposing the old door which normally part of any professional installation cost. Self installation will also require you to have the assistance of at least one helper.

We feel that the Lowes garage door installation cost is very reasonable and provides the home owner the peace of mind knowing that the installation was done correctly. Occasionally installation cost can be included in the purchase price of your garage door. Be sure to check with you Lowes sales representative on the latest sales offers.

What Does It Really Cost To Buy A Home?

It is important to know exactly what costs on top of the purchase price you’ll be responsible for when purchasing a new home. Closing costs often come as a surprise to new home owners and can be quite considerable (between 1.5% and 2.5% of the purchase price), so it is important to budget for them in addition to your down payment, moving, and decorating costs. What are closing costs? Here is a brief list.

Home Inspection: An inspection by a certified professional is for the benefit of the buyer and helps to alleviate concerns with respect to the condition of a property. A home inspection costs between $400 and $500.

Mortgage Appraisal: Lenders require an appraisal of a property to determine market value prior to processing your mortgage. While often waived by the lender, appraisals can range from $150 to $450. Some lenders also charge a mortgage application fee.

Property Survey or Title Insurance: When a new survey is not available, Title Insurance protects Buyers from losses due to title defects. While a survey can cost over $1,000 depending on the size of the property, title insurance typically starts around $275.

Land Transfer Tax: Payable to the province, this tax is calculated in tiers as a percentage of the selling price of a home (visit http://www.callthom.com/resources/calculators/ ). First time home buyers can qualify for a refund of up to $4000.

Home Insurance: Mortgage lenders require a certificate of insurance when you take possession of your home. Like all insurance, the price varies depending on a number of variables but ranges from $750 to $1,500 for most properties.

Adjustments (between Seller and Purchaser): Buyers are required to repay the Seller for prepayments they have made in relation to the property such as property taxes, utilities, condo fees, or topping off the oil tank.

Legal Fees and Disbursements: Your lawyer will charge fees for professional services including title search, drafting the title deed and preparing the mortgage. These fees vary, but expect to pay between $600 and $1,000, plus out-of-pocket and miscellaneous expenses up to $350.

Harmonized Sales Tax (HST): Resale homes are not subject to HST, however, HST is payable on the sale price of a newly constructed or a significantly renovated home. HST is also collected on professional fees, and on Canadian Mortgage and Housing Corporation (CMHC) Insurance fees.

Not all of these costs may pertain, and depending on your circumstance, others may apply. It is best to speak to your lawyer for more information.

EIFS – Synthetic Stucco Cost – Price – A Lucrative Investment

Whether you’re planning to renovate your house to increase curb appeal for potential buyers or live in your home for the rest of your life, renovating with synthetic stucco will give you the greatest ROI (return on investment) for your money. The aesthetic value of EIFS alone causes a home to stand out as a gem among it’s neighbors to create a lasting first impression. However, it doesn’t stop at first impressions, as a new siding on your house is ranked the top home renovation in terms of “Cost vs. Value”. If that wasn’t enough, any money not initially recovered via increased home valuation is made up by significant reductions in your heating and cooling bills, putting money back in your pocket for years to come.

The most obvious benefit of synthetic stucco is it’s beauty. No siding exists which can match it’s wide range of textures, colours and design options. From your charmingly basic EIFS with flat trim, right through to the dentil’d cornices, columns, pilasters, keystones, flowers and elaborate moldings of multi-million dollar homes clad in synthetic stucco. This “aesthetic value,” although difficult to translate into actual dollars, is invaluable in it’s ability to bolster that all-important “first impression” of your house and make it stand out to potential buyers. This curb appeal is not only for potential buyers however; home owners with recently finished EIFS happily recount (with a big smile) instances of hitherto unseen neighbors stopping by their house to pay them a compliment, express their envy and seek a referral.

From your charmingly basic EIFS with flat trim, right through to … multi-million dollar homes clad in synthetic stucco.

Many factors of EIFS (such as aesthetic value and being safe from mold) cannot be measured in dollar value, but there is a direct cost vs. value according to Remodeling Magazine’s 2007 “Cost vs. Value Report.” In this highly-regarded report detailing costs of various home remodeling projects and their return on investment at resale time, fiber-cement siding (like EIFS) come in at the (not surprising) number one position, with an astounding return of 88.1%. This means that on a $15,000.00 EIFS renovation, your home’s value increases immediately by $13,215.00 vs. $9,900.00 for a comparable $15,000.00 bathroom addition (66.0% cost recoup). In reality, a synthetic stucco renovation blows others out of the water in terms of value because…

This means that on a $15,000.00 EIFS renovation, your home’s value increases immediately by $13,215.00 vs. $9,900.00 for a comparable $15,000.00 bathroom addition

Adding EIFS to your home results in significant energy savings. Home owners typically report a 25%-40% reduction in their energy bills due to the higher insulation value of their walls. The method by which synthetic stucco reduces heat loss/gain is 2 fold. Primarily, it’s insulation prevents heat penetration through walls, and secondarily, acts as an air barrier — preventing air flow and therefore heat transfer. This means that less heat is lost during the cold season, and less heat penetrates into your home during the warm season — a double benefit for those living in Canada and the upper states. Looking at a typical annual heating/cooling bill of around $2,500.00 and a minimum of 25% reduction, the average home owner can expect to get back $625.00 every year. Again looking at our $15,000.00 EIFS renovation and subtracting the increase in home valuation ($13,215.00), it has only cost $1,785.00. At a rate of $625.00 per year in energy savings, you are “out of the red” in only 3 years ([3 * $625.00 = $1,875.00] – $1,785.00 = $90.00.)

Looking at a typical annual heating/cooling bill of around $2,500.00 and a minimum 25% reduction, the average home owner can expect to get back $625.00 every year.

Whether planning to renovate with EIFS to attract home buyers or simply to intelligently invest in your greatest asset, you can rest assured you’re making the right choice. After having fully paid off your investment in 3 years, you’ll have an asset which generates approximate 4.2% ($625.00 / $15,000.00) ROI for a 25% reduction in heating/cooling costs, and 6.7% ($1,000.00 / $15,000.00) for a 40% reduction (after 2 years). This energy saving is a huge plus for home buyers, who are also increasingly becoming environmentally conscientious and will adore the freshly renovated exterior of your home.

Real Estate Appraisal – Bring Back the Cost Approach

In the last few years there has been a trend toward a complete discounting of the Cost Approach to value in residential appraisal. For owner occupied homes, the sole technique is now the Sales Comparison Analysis, which involves selecting and comparing individual property sales to a subject property.

Many lenders and government agencies no longer require the Cost Approach technique, even on new or nearly new construction, and appraisers are often instructed to omit it completely, or not to place any reliance on the results. When a lender does require that the Cost Approach be completed, it seems that this is only so that a proper amount of homeowner insurance can be determined. This is, of course, something critically important to the lender as well as the homeowner, but should not be the only criteria for the use of a cost-depreciation analysis.

Years ago a Cost Approach was always required for an appraisal report. The basis of this approach was the Principle of Substitution, which holds that a prudent buyer will not pay more for a home than the cost to acquire an equally desirable substitute home. Accordingly, the reproduction or replacement cost new of a home set the upper possible limit on value, particularly for an existing preowned home. So this analysis served not only as an additional means of estimating value, but also as a governor on runaway home prices.

The cost approach also served an important function as an educational tool for appraisers. To perform this approach, an appraiser had to have at least a minimal working knowledge of residential construction and to carefully observe the quality and condition of the various components of the home. Cost data services, which still exist today, provide continuously updated information on the various costs of construction involved in a home and some are quite accurate.

One service publishes a manual with a wealth of good data and information, complete with descriptions and photographs that illustrate the differences in quality and appearance for different types of homes, which is a great way for new or inexperienced appraisers to familiarize themselves with these features. In recent times I have come across reports by relatively new appraisers where no cost approach was done and it was painfully obvious that the appraiser knew very little about construction or how to evaluate the differences between their subject and the comparable sales they used in the Sales Comparison Analysis. I suspect we have a new generation of appraisers out there who have this deficiency and that’s a bad sign for the future. The best appraisers know something about construction and can immediately spot differences among homes as to their quality level. This ability is also critical for the appraisal reviewer.

The Cost Approach is not without its weaknesses. The primary weakness is in the estimate of depreciation, be it physical, functional or external in nature. These things are difficult to estimate, but again, the appraiser who learns how to do this becomes more knowledgeable and competent, both in the Cost and Sales Comparison methods. Another weakness is in estimating the land value. Actual sales are often not available as a means to determine what buyers are paying for a similar lot and so market abstraction (also called extraction) is used to estimate the ratio of land value to dwelling value from market sales of already built homes. Improperly done, this technique is subject to serious errors. The general rule for the Cost Approach is that it is most accurate when the dwelling is not very old and sales of nearby similar lots are available.

I am of the opinion that the majority of foreclosures involve relatively new homes and that this is where the largest amount of lending losses occur. At least, that’s how it is in my local market which has always had a lot of new construction. There are many reasons for foreclosures, but certainly one is upgrades.

Builders typically offer various home models at “base” prices and offer upgrades for both the home and the lot. Buyers can choose from a wide variety of options to enhance the home and can choose lots that are different in size or that have more trees or other desirable aspects. This is great for the buyer but can become a nightmare for the lender when a foreclosure happens because so many of those nice upgrades do not hold their value in subsequent foreclosure sales, and often do not hold their value as the distressed homeowner desperately tries to sell the home to avoid foreclosure.

The homeowner finds out they are “upside down” meaning the home cannot be sold for as much as the mortgage amount, especially when the initial down payment was very low or when financing costs were included (rolled into) the mortgage, necessitating an increase in the sale price. Another problem is inflated upgrade cost where some builders mark up the prices of upgrades well beyond normal prices that consumers pay at retail stores, even with installation added on. This is similar to what many service contractors (plumbers, car mechanics, etc.) do because they want to make a profit on the “parts” as well as the labor. The problem comes when the markup is excessive.

There is little an appraiser can do about upgrades when it can be shown that buyers often do select upgrades with their new home purchase. In the absence of current resales or foreclosures to compare with, it is not possible to estimate the resale value of upgrades, and values are estimated as of a given date, not the future.

The Cost Approach long served as a reasonable basis for making adjustments to market sales in the Sales Comparison Analysis for individual items. If a home needed a new roof, the appraiser had a handy source for determining the cost for this. Likewise for appliances, HVAC equipment, a garage and the like. Removing the Cost Approach and the good data that comes with it forces too many appraisers to have to guess at these kinds of adjustments and the results can vary wildly from one appraiser to the next.

Long ago homes were valued only by a Cost Approach. The Sales Comparison Analysis (formerly known as the Market Approach) came later. I don’t believe it is a coincidence that foreclosure rates and personal bankruptcies caused by unaffordable mortgage amounts and runaway home prices seem to have increased so much in recent years while the use of the Cost Approach has declined at the same time. Not do I believe it is a coincidence that the decrease in emphasis on cost minus depreciation began about the same time as tremendous inflows of capital into the marketplace encouraged every sort of easy money credit scheme that allowed so many people to buy homes they couldn’t actually afford and that has severely damaged not only the US economy, but the entire world. Mountains of money to lend tend to push caution to the side.

I believe that the Sales Comparison Analysis is surely a good valuation technique, but its down side is that there are too many clever ways for market participants to smuggle hidden costs, fees and even fraud into sales contracts, which make their way silently into market data services and onto appraisal reports. The same can be true for unhidden costs like seller paid loan discount fees and other monies paid toward buyer closing costs. At a minimum, an accurate Cost Approach serves as a useful check on the results of even the most thorough and detailed Sales Comparison Analysis where the appraiser is carefully searching for and analyzing such things. Undesirable things can and do happen in real estate and some can slip past even the best Sales Comparison Analysis because they happen quietly and incrementally.

An example of this is what I call closing cost price compounding. A real estate agent provides a seller a pricing analysis where the agent has found 20 recent sales of similar homes in the area and averaged the prices to arrive at a figure he or she believes is correct for the home. The home is then marketed at that price. Along comes a buyer (perhaps from a higher cost market) who lacks cash, needs some assistance with his closing costs, and makes an offer at or very near the asking price. The seller counters with an offer in which he adds the amount of assistance the buyer asked for to the price.

But what if this type of assistance turns out to be normal for the area and is already reflected in the selling prices of those 20 homes used to set the asking price to begin with? The new sale closes at the upwardly adjusted price and is then used as a “comp” by other agents and by appraisers and the process continues with every repeat occurrence of the needy buyer, causing home prices to rise, affordability to lessen, creating more needy buyers, and setting in motion a snowball effect where prices to rise eventually to the point that they exceed even cost new. This is not unlike interest compounding on your savings account. Over time your balance goes up faster and faster. Combine this with other inflationary market tendencies and you get a nasty bubble that will some day burst to the peril of us all…again.

Obviously, this could be avoided by competent sales agents who understand that those 20 sales already included heavy seller costs and inform their clients of this, but many do not and there is a built in incentive to push prices as high as possible among people working on commission. An accurate Cost Approach would tend to catch this anomaly immediately or at least decrease its effects down the line in future sales because when home prices begin to exceed what it would cost to build an equally desirable substitute home brand new, the competent appraiser knows that something is wrong and that they need to dig deeper into the market data.

A Cost Approach is also a great lie detector for fraudulent appraisals. If an appraiser included a Cost Approach and is using a known cost source or manual that others can subscribe or view, then the estimated costs shown in the appraisal can be reproduced from that same source by someone reviewing the report. So if the appraiser has fudged on cost, that can be detected simply by examining the cost source and parameters the appraiser had described. Moreover, even if the appraiser showed the correct costs, the fraudulently inflated appraisal will exhibit inflated land value in the Cost Approach with little or no support as to where the land value estimate comes from or why it is so high. In fraudulent appraisals, the Cost Approach is “plugged in” with numbers to match the Sales Comparison Analysis. That’s because an honest Cost Approach would have indicated a significantly lower value for the home.

There are other examples of how the Cost Approach could eliminate or reduce runaway home prices, and even detect fraud. I believe it is a foolish mistake to take away or encourage the disuse of any type of analysis or tool from appraisers that has a basis in market data. An analyst in any field of study should be willing and enabled to use as many ways as possible of looking at a problem. Focusing on just one method encourages tunnel vision. I say bring back the Cost Approach and let appraisers decide how useful or accurate it is on a case by case basis. It is not the end-all be-all solution but it is a valuable and worthwhile tool.