A budget is a financial plan for your entire Design/Build process. It is the dollar equivalent for all the work it takes to design and build your new home. You are NOT expected to create this document accurately at the outset of your experience so it's best to begin with estimates and refine your financial plan as time goes by.

The primary purpose of preparing a budget is to understand and control costs. Beginning with the estimates, one is able to guess the total dollar amount for the style and size of a home on a particular lot. At the very least an Owner should be able to consider if the project is feasible once estimates are made. The total dollar amount can be broken into two categories: hard costs and soft costs. Hard costs include labor and material to build the house. Soft costs include everything else. The budget format provided here outlines products and services which one utilizes during the Design/Build process.

The budget estimate for hard and soft costs is a departure point for considering the scope of Drawings and Specifications. These budgetary considerations BEGIN early in the schematic phase of the Design/Build process. Consider the initial study of costs as an exercise in project feasibility. Based on your projection of costs, the Owner should be able to weigh and consider the Design/Build options. With estimates prepared, attention can be given to the Budget review process: 1-identify priorities, 2-recognize trade-offs, 3-do cost/benefit analysis, 4-revise cost estimate.

The following percentage estimate of hard costs is a ball park guess. It simply is a beginning point for determining if the amount you have to spend is even close to the house you want to build. One should realize that this is a very VOLATILE estimate. For instance, if you choose the "Sub-Zero" brand refrigerator for your appliance package (and if comparable products are used), then you might as well accept that once you complete your estimate, you will hold the price tag on a very high-end, luxury house. If you purchase the "General Electric" brand refrigerator for your appliance package (and remain with comparable products), then your estimate will result in a medium-priced, custom house. There is a cost range from economy, to modest, to custom, to luxury which CORRELATES with the products and materials you choose to install in your home. Match material/product choices with the price category in which you can afford to build.

PRELIMINARY BUDGET ESTIMATE

All preliminary budget estimates will include material and labor to complete both rough and finish installation. The following budget list represents cost categories to which you must assign preliminary dollar amounts for the work to be accomplished.

The remainder of this chapter is dedicated to such topics as "Construction Budget Estimate by Percentage of Hard Costs" and "Construction Budget Estimate by Percentage of Soft Costs".

And just to remind you how your money might be spent by others, there's a further breakdown of "Builder's Overhead and Profit" as well as "Architect/Designer's Fee".

Getting started on a Budget Estimate can be exasperating with no formal training in the business of residential architecture and construction. The purpose of this chapter is to help you create a fiscal plan of action for your home building project. Still another resource provided by Craftsman Books is the "free trial estimator" download. Click on their "Try It/Buy It" button and they let you download any of their costbooks and estimating program for a free 30 day trial offer. You may also benefit by utilizing a professional software tool like "EZHOMEBUILD" from Home Construction Consulting, which will provide an electronic means to organize and manage information for your project.

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