Do you want to keep your custom home project on budget?
I'm going to be sharing seven tips with you to dramatically help you keep your project
on budget.
My name is Kathy Yuen.
I'm an architectural technologist, custom home designer, and founder of Phase One Design.
By the end of this video, you are going to have a solid foundation on how to keep your
custom home costs on track from the very beginning to the very end.
Be sure to subscribe below, so you don't miss any of my future videos, and also don't forget
to comment and let me know what future topics you would like to see on this channel.
Step number one, do your homework.
First off, you need to go out and find out what it is that you actually want.
I know this sounds really obvious, but this is going to go a really long way in understanding
what your costs are.
You need to know what your expectations are that you have for your custom home, so that
you can actually communicate them to the other experts that are going to be helping you put
your budget together.
Just start by making a list.
Here's some items to capture: how many bedrooms?
How many bathrooms?
What other rooms are you looking to have?
Home office, gym, formal dining room, wok kitchen, a craft room, the list goes on.
How many stories would you like your house to be?
Your garage, how big is it?
Is it an attached garage or is it a detached garage?
Then when you have that, start gathering photos of what it is that you expect your house to
look like, both on the inside and on the outside.
Why is this important?
Well, again, we're going to cover this in the next step, but when you're sitting down
with an expert, you are now going to be able to have a solid way to communicate all of
this information to them that is not so arbitrary as just saying, "I would like a 3,000 square
foot home that is modern."
Step two, get a realistic budget range.
Okay, so everybody wants to know, "How much does my custom home cost to the dollar, ideally?"
At this point, it's just totally not realistic to expect that, because you don't have enough
information.
What you want to do is actually get a range, and by range what I mean is you are going
to get a range out there that is a low range and a high range.
So your price for your custom home, and how much your custom home is going to cost, is
going to fall within a low range and a high range.
How do you do that?
You would approach two different experts: a designer and a builder.
So first, a designer.
Why would you need to talk to a designer?
Well, a lot of people actually miss this stuff.
The reason why you want to talk to a designer, is your designer is going to be able to tell
you based on all the homework that you've done in step one, how big of a house that
you actually need square footage wise.
The size of your house very, very closely relates to what the budget is, so you need
to know what that number is square footage wise.
Also, very experienced designers will be able to sit down with you and do a preliminary
costing exercise with you to give you a high level idea of what your budget range should
be.
The second person to talk to is obviously a builder.
A builder is obviously well experienced in custom home costs, and are going to be able
to give you some insight into what your cost for your home will be.
Because this is such a popular topic, I've actually written an entire guide about how
to establish a budget range for your project.
I provided a link down below.
You can download it.
It is called The Step-By-Step Guide to Planning Your Custom Home.
Now, notice I said, "get a realistic budget."
The keyword there is "realistic."
What's going to end up happening, is you're going to go out there, you're going to talk
to a whole bunch of different people, and I promise you, you are going to get a whole
bunch of different numbers.
You know to expect a range, but what happens when you actually have that?
This is a good segue into our next topic.
Step number three, don't just focus on the lowest price.
Unfortunately, this is what I see a lot of.
A homeowner will go out there, and they will get the range of pricing.
They'll get their low and their high, but after that, the only price that they focus
on is the very lowest price, and then they base their entire project on that number.
That, my friends, is definitely not the way to do it.
If for whatever reason you're not comfortable with that low/high range, and you must, must,
must stick to the bottom end of that range, I'm going to give you some advice right now.
I would seriously, seriously consider just taking a step back, and rethinking the scope
of your project.
For example, how big do you want your house?
You're going to have to adjust something in your scope to actually reduce it, or your
budget needs to come up.
Until you've done that, please do not go any further.
I know this isn't what you want to hear me say, but I'd rather say it to you now than
see you run into trouble later on.
You want to always make sure that you're leaving yourself a little bit of wiggle room for sure,
and that you're not always so tight on your budget at the very beginning.
Which takes us to step number four.
Step number four, build in a contingency.
With every custom home project, there should be a contingency.
At the very beginning, start with a large one, as much as 20 to 30%.
As you start firming up your plans and start doing some selections, that contingency can
go down slightly, but make sure you have one to begin with.
Secondly, do not spend that contingency.
During design, I promise you, you are going to be exposed to a lot of shiny things that
you're going to want to put in your design as you surf design magazines, and surf online
design images.
You are going to find all these things, but whatever you do, don't spend your contingency.
It is like your rainy day fund, your backup plan, everything like that.
It is not intended to be spent on your actual project, unless you are really, really comfortable
with your custom home costs, and you feel like you have a lot of wiggle room.
I'm just curious, how much are you going to use for your contingency?
Comment below and let me know.
Step number five, leverage design to keep on budget.
This is one of my favorite tips, and one that is not commonly known.
Did you know that design controls your budget, not the builder?
As your design starts taking shape, that is actually when your budget is going to start
also taking shape.
Your budget is 100% directly related to the design of your house.
You might be thinking, "What?
What are you talking about, Kathy, that doesn't make any sense?"
Which is totally fine.
I've made a video about it, so I provided a link below.
We deep dive into it, and it's all explained, but what you need to know for the purposes
of this step is that you can control your budget through design.
Throughout the design process, you should be making sure that you're having comprehensive
budget conversations both with your designer and your builder.
Again, that emphasizes the reason why you have to work with a designer that understands
how to work with a budget during the design process.
Whatever you do, do not finish your design and then take it to a builder, and then just
cross your fingers and hope that they're going to make the budget work.
I promise you, that very, very rarely works.
Step number six, work with a designer that understands budgets.
From day one, you should be working with a designer that understands budgets.
This is going to go a long, long way for you in keeping your whole custom home costs in
check.
This is a large topic, so I've actually provided a totally different video for this.
The link is below.
Feel free to check it out.
How do you know that your custom home designer knows how to do this?
At the very, very beginning of the process, before you sign a contract with them, they
should be asking you what your budget is, and budget related questions.
This is a great telltale sign that they are going to be mindful of your budget throughout
the process, and also, ask them straight up, "How are you going to help me keep my budget
on track?"
They should be able to answer that question.
Just a super quick side note, another really cool benefit about working with a designer
that understands how to work with budgets, is that those types of designers are going
to understand custom home costs, so what that means is they're going to be able to take
your budget and stretch your dollars as far as possible, and of course, without sacrificing
quality, I'm not saying cutting corners or anything like that, but what I'm saying is
that you as the homeowner are going to get the biggest bang for your buck.
Step seven, start talking to a builder early on.
Start talking to a builder early on in the process so that they can actually help you
during the design process.
They can add to these budget conversations.
It doesn't mean that you have to sign a construction contract at this stage in the game.
Some builders will charge a low fee for this, but it's well worth your investment.
They will be giving you high-quality advice, and many builders will also do intermediate
budgets for you during design, so you can just kind of check in to see where you're
at budget wise.
You can adjust your design higher or lower depending on where that intermediate budget
stands.
Again, if you don't feel comfortable at this stage in the game, you do not need to sign
a construction contract with the builder.
Your commitment to them would only be for that piece of the contract where they're putting
those budgets together for you.
It's kind of like dating before getting married.
Now you know the exact steps for how to keep your custom home project on budget.
Don't forget to download the Step-By-Step Planning Guide below that I've written.
It outlines all of the steps that you need in order to establish that initial budget
range.
If you liked this video, please give me a thumbs up by clicking on the like button below.
Leave your comments below too, I love reading them.
And of course, don't forget to subscribe so you don't miss any of our new videos.
If you're interested in chatting more about your custom home project with my team and
I, I've also provided our contact information below.
Last but not least, a huge shout out to our friends at Maillot Homes.
We filmed in their Sydenham show home today in Mount Royal, Calgary.
They do beautiful homes.
They are awesome and one of our builder partners.
I provided a link to their contact information below as well.
Thanks everyone, and see you in the next video.
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