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Seven Costs You Shouldn’t Forget When Planning to Build

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Building a new home requires up to fifty different trade contractors and suppliers.  In addition to the people that actually perform the work on the home, there are numerous cost items that can be easily overlooked when planning to build.  Here’s a quick look at seven budget line items that must be included in the initial cost estimate if you want a chance at avoiding cost overruns on your new home.

Erosion Control

There’s a governmental agency in the U.S. called the EPA that has a say as to how we go about building homes today.  This group wants to avoid pollution from dust, mud and dirt coming from construction sites.  So in order to meet strict EPA requirements, new home budgets should include money for erosion control.  This would include the cost of silt fencing (that two foot tall black fabric you see surrounding the perimeter of construction sites), tire scrubbers at construction entrances, and dust control fences when required.  Your civil engineer can help you determine the requirements for your particular area of the country.  In many parts of the Midwest, erosion control comprises up to .50 percent of the new home budget.

Tree Clearing

It’s probably somewhat obvious that trees need to be cleared in order to build a new home.  But many people forget how expensive this task can be.  Clearing must take place at the footprint of the home and at least a twenty foot buffer around the building to allow for proper grading and drainage.  In addition to cutting the trees down (which can get expensive when other homes and power lines are close by), the stumps need to be removed and all debris hauled away.  The budget for tree clearing on a home can cost up to one percent of the new home budget.

Soil Contingency

It’s difficult to know exactly what’s under the ground where the house will be built until digging actually takes place.  Organic soil, tree roots, and rock can require extra work and material to make certain the new home sits on solid ground.  A soil engineer should be hired to review the soil where the footings will be installed.  A soil contingency budget and soil engineer can add one percent to the average new home build.

Public Sidewalk

The word “public” makes you think the sidewalk will be installed by the local government but in most municipalities, the person building the new home is responsible for installing them.  The typical concrete city sidewalk is four feet wide and four inches thick (except for the driveway location which is six inches thick).  The cost for these is approximately $4 per square foot installed.  For the typical 85 foot wide lot, you’re looking at an additional $1360.  If you have a corner lot, the public sidewalk expense can get even bigger.


The building industry is doing a much better job of recycling the byproducts from building a new home.  This helps to cut down on the cost for dumpsters on the job site.  Unfortunately, the recycling typically isn’t free.  The extra lumber, cardboard, metals…etc. still need to be sorted and transported off site to be recycled.  So don’t forget to add an extra one percent to the house cost budget to cover refuse removal and recycling.

Water Tap Fees

Unless the new home will have a well, there will probably need to be a budget line item for water tap fees.  The connection of the house to the city water supply, sometimes called a tap, typically requires additional fees.  These fees cover improvements required by the city to the water treatment facilities to cover extra drain from new homes.  The best way to get this cost is to contact the local water utility.

Impact Fees

Municipalities feel an extra strain on their resources when the population increases.  Things like police, fire, libraries, schools, refuse…etc. are all costs that increase when more people move into the area.  So in order to capture the costs for expanding the services, municipalities will sometimes charge impact fees.  Be sure to look into the impact fees in the area in which you will be building.  In some cases, these can add tens of thousands of dollars to a new home budget.

Michael Luckado

Michael Luckado has built, remodeled, and repaired thousands of homes across the U.S. He co-founded to help people save money and time creating their dream home.

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