Cost-Cutting Steps to Building a House

Start with Square Footage Costs

• Plan the budget around square footage. For example, find out the average cost per square foot to construct a home in your area. If that figure is $170 per square foot, figure a 2,500-square-foot home versus a 3,000-square-foot home to match that figure. Use the cost per square foot as your starting point. Review all of your possible options for saving money to see if you can actually build the desired 3,000-square-foot home, however.

Reduce Cost of Exterior

• Look at ways you can save on exterior materials. For example, if you build the home with stucco and siding, it will likely cost less than using all brick. Consider, however, that you can use a combination of stucco, stacked stone veneer and some brick. This combination of materials might yield a more beautiful outcome than using just brick.

Trim the Land Budget

• Figure out ways to save money on land. For example, if you buy three-quarters of an acre just two blocks away from a high-end gated community, you might save thousands of dollars. Evaluate how investing in the home itself might surpass living in a costlier neighborhood. Don't overlook buying two acres of land and selling half of it to make some additional money. You will need to have the land totally paid for, however, before you can deed any of it to a buyer.

Scout for Sales

• Buy flooring and interior materials in the classifieds. If you can purchase tiles drywall and bath fixtures from builders selling items left over from other jobs, this can help save money. Visit close-out stores to learn how much you can save on bath and kitchen fixtures or cabinets. Appliance sales and sales on light fixtures can help cut the budget, too.

Invest Time for DIY Labor

• Plan to do some of the work yourself. If you have landscaping or painting skills, you can save a few thousand dollars by completing tasks on your days off. Keep in mind, however, that a mortgage lender will inspect the home periodically before money is released. One third of the construction loan money may be given to you up front. The second and third round of funding will come after inspection processes. Make sure you have time to do painting or landscaping on your days off while the home is under construction.

Engage Your Builder

• A builder must understand your strategies. Explain to your general contractor that you will devote time to cutting construction costs. Ask this person to help you figure out people and places to use as resources. For example, a general contractor may know a wholesale dealer that sells carpet at a huge discount. Buying directly from a hardwood factory or tile manufacturer may be possible as well.