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Top Five Money Savings Tips for New Home Construction

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Save Big The Next Time You Build

Top Five Money Savings Tips for New Home Construction

Considering how fragile the economy is right now and how timid banks are to loan money for new homes I thought I’d share my experience with saving money on new home construction. It wasn’t that long ago when getting loans was really easy and building large homes was the trend. Today banks are less likely to fund new construction because of the premium costs associated with new construction.

Bring Equity To The Table

In most real estate markets today you can purchase an existing home for quite a bit less money than a comparable new home. Because of this banks are much more likely to focus their loans on very good customers with plenty of equity (skin in the game!) and homes that will hold their value in this turbulent real estate market.

Top 5 Ways To Save Money

Having said that if you’re really set on building a new home there are ways you can keep the budget down so that banks are more likely to fund your project. Here are my top five ways of saving money on new home construction.

  1. Square footage is the name of the game. No matter how you slice it every square foot you add to the footprint of your new home is going to cost money. It affects every aspect of the construction from the foundation all the way to the finish coat of paint. I tell customers to start off with a floor plan that has everything they want and all the room they want. Then you need to take the time to analyze each and every room and see if you can make them smaller and keep the functionality. If you take a simple 30 foot wide home and remove 2 feet of length you can save 60 square feet. 60 sq. ft multiplied times an average cost of over $150 equals $9000. Now you might be saying $9000 is nothing….but I say that will pay for over half of your flooring. So if you want to be serious about keeping costs down then always keep the square footage to a minimum.
  2. Choose a home style that is 2 stories if at all possible. This concept is pretty simple yet some people never realize how effective it can be. Let’s compare two homes; home A is a 2000 sq. ft. ranch style single level home, home B is a 2000 sq. ft. colonial two story home. Both homes have 2000 sq. ft. so you might say they would cost the same. I would argue the opposite and here’s why: House A has a foundation that is twice the size as House B. House A has a roof twice the size of House B. This simple example can easily save you $10,000 to $20,000, yet you end up with the same livable space.

Click here to read three more ways you can save money on new home construction.

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About

Todd Fratzel is the editor of Tool Box Buzz and president of Front Steps Media, LLC, a web-based media company focused on the home improvement and construction industries. He’s also... Read more

4 comments on “Top Five Money Savings Tips for New Home Construction

  1. Kurt

    Great tips. I think the biggest challenge is to do your homework up front and be specifi in what you want. Do not allow low allowances that will not cover what you want.

  2. Gerry

    Great tip. That is something I have not considered. It’s too late now to tell my sister in-law about her ranch style home that is half built. It is something that I can suggest to others now though.

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