Budget is the most important decision lever. Get it right early and the rest of the process stays calm. Here is how to approach it with clarity.
Step 1: Define Scope and Priorities
List must-haves, nice-to-haves, and not-needed items. Tie each to function, not just finishes. For example, a scullery adds everyday utility. A glass-walled gym adds experience. Knowing what matters most helps with value engineering later without regret.
Step 2: Understand Cost Drivers
- Square footage and geometry: Simple massing costs less than complex rooflines and structural spans.
- Site work: Long drives, steep slopes, rock, tree clearing, retaining walls, and utilities add cost.
- Windows and openings: Large spans, corner glass, and steel strengthen design but impact budget.
- Systems: Geothermal, whole-home automation, solar prep, generators, and water treatment raise cost but can improve performance and resilience.
- Finish level: Custom cabinetry, stone slabs, plumbing and lighting packages, and premium flooring shift totals quickly.
A Sample Allocation Model
For illustration only, here is a typical distribution on a $2,400,000 custom home:
- Site work, utilities and land improvements: 10% = $240,000
- Structure and framing: 20% = $480,000
- Mechanical, electrical, plumbing: 14% = $336,000
- Exterior envelope and windows: 15% = $360,000
- Interior finishes: 15% = $360,000
- Cabinets, fixtures, appliances: 10% = $240,000
- Design, engineering, permits: 6% = $144,000
- Builder profit: 10% = $240,00
- Total: 100% = $2,400,000
Every project is unique, but this helps you visualize where dollars go.
Fixed-Price vs. Cost-Plus
- Cost-plus gives a running tally and often feels open-ended. Owners carry more risk.
- Fixed-price sets the total before construction. You get transparency on what is included and how allowances work. BOLD uses fixed-price to keep budgets predictable.
Allowances That Deserve Extra Attention
- Cabinets
- Tile and countertops
- Plumbing and lighting fixtures
- Appliances
- Landscaping and hardscape
Clarify brands, counts, locations, and install details so the allowance fits your taste. If you plan for a 48-inch range, pot filler, and pro-level ventilation, price those specifics up front.
Ways to Protect Your Budget Without Cheapening the Home
- Keep the footprint efficient and invest in a few high-impact moments, such as a great kitchen and an indoor-outdoor living connection.
- Choose classic materials in main spaces and use specialty finishes in focal zones.
- Standardize door and window sizes where possible, then splurge on a statement wall or two.
- Decide built-ins early. Site-built cabinetry can be optimized if designed with the structure.
Preconstruction Pricing is Your Best Friend
Ask your builder for a structured preconstruction phase that converts design intent into a complete, priced specification. This is where you avoid surprises. This is BOLD’s fixed-price contract.
FAQs
Is cost per square foot a reliable planning tool?
It is a rough directional guide. True accuracy comes from a priced specification that reflects your plan, site, and selections.
How much contingency should I set aside?
With a fixed-price contract and disciplined selections, 3 to 5 percent for owner-driven changes is typical.
Which upgrades deliver strong long-term value?
Well-designed kitchens, high-performance windows, and durable exterior materials often return value in use and resale.
When are allowances finalized?
During preconstruction. The more specific the selections list, the fewer surprises later.
What site conditions swing budget the most?
Rock, steep slopes, long driveways, extensive stormwater measures, and septic complexity.