The Hidden Costs of Building a Home

The Hidden Costs of Building a Home: What to Budget For

Building a home in Pittsburgh is an exciting journey, and when you build a custom home, it offers the opportunity to design a space tailored to your lifestyle and preferences. However, many homeowners underestimate the project’s true cost because they overlook expenses that aren’t immediately obvious. Understanding these extra costs upfront can help you plan a more realistic budget for the total cost of building a new house and avoid financial surprises.

1. Site Preparation Costs

One of the first potential hidden costs of building a custom home is site preparation. Before construction begins, the land must often be cleared, graded, and prepped to ensure a stable foundation. This process may involve:

Removing trees, rocks, or other obstructions
Leveling uneven terrain
Addressing drainage issues to prevent future water problems
Soil testing to ensure the ground can support your home

In Pittsburgh, where land conditions vary significantly, site costs can quickly escalate if the lot is uneven or requires extensive work. For instance, land preparation for a hillside lot could need retaining walls and drainage solutions, adding tens of thousands of dollars to a budget. Have you assessed your lot’s condition with a professional to get an accurate estimate of potential costs?

A truck unloads lumber at a construction site, with stacks of wooden beams and packaged materials on the ground.

2. Permit Fees

Every custom home project requires various permits and approvals from local authorities. These can include:

Building permits
Environmental impact assessments
Zoning permits
Utility connection fees for water, sewer, electricity, and gas

Navigating Pittsburgh’s permitting process can be complex, especially if your project involves unique zoning requirements or historic districts. The cost of a building permit can range from a few hundred to several thousand dollars, depending on your location (each township is different), and is often based on the cost of your project. Have you researched the specific permits required for your custom home and their associated costs? While your builder will handle the necessary permits, it’s important to include the estimated costs in your construction budget.

Part of the hidden costs of building a house is architectural design. This is a partially constructed house with green sheathing, wood accents, and two garage doors, set in a dirt lot with trees in the background.

3. Architectural and Design Fees

In the design phase of your new home build, you have options to consider. One home design approach is to work with an independent architect or designer to create a fully customized home plan*. Architectural fees typically are a percentage of the total construction cost. In addition to the initial design, you may also need to budget for:

Interior design consultations
Landscape design
Revisions to the plans if preferences change during the process

However, you can also work with a design-build firm like Prime 1 Builders. In this approach, the same team handles both the design and construction phases, streamlining communication and potentially saving time and money. Design-build firms often offer more predictable costs and fewer surprises since the design is integrated with the construction process.

Have you considered which approach best suits your needs and budget? Whether you prefer the flexibility of working with an architect or the efficiency of design-build construction, it’s important to account for these costs in your overall plan.

*We can also recommend architects we’ve worked with for years.

4. Utility Infrastructure

If your lot is more remote or undeveloped, you may face significant costs to connect your home to utilities. This includes:

Extending water and sewer lines
Installing a septic system if public sewer access isn’t available
Running electrical lines or setting up solar panels

In Pittsburgh, utility infrastructure costs can vary depending on your lot’s proximity to existing services. For example, extending water or gas lines to a property outside developed areas can cost thousands of dollars. Have you evaluated the availability of utilities on your chosen lot and consulted with providers to understand connection costs?

Two unfinished windows overlook a view of North Shore, Pittsburgh in this project.

5. Unforeseen Design Changes

Even with a detailed planning of your construction project, design changes can happen during custom home construction. This is called a change order. You might decide to:

Upgrade building materials (e.g., opting for hardwood floors instead of carpet) or improve the energy efficiency behind the walls.
Add features like built-in storage or upgraded appliances
Modify the floor plan to better suit your needs after seeing the initial framing
Improve rough-ins for future renovations

Each change typically comes with additional costs for materials and labor, which can quickly add up if not carefully managed. Have you set aside a contingency fund to accommodate potential design changes? Builders often recommend allocating 10% to 15% of your total budget for unexpected expenses.

6. Landscaping and Outdoor Features

While most homeowners focus on the home itself, it’s important to account for the cost of landscaping and outdoor features. This includes:

Planting grass, shrubs, and trees to add to the curb appeal of your beautifully crafted custom home
Building decks, patios, or fences
Installing irrigation systems and outdoor lighting

In Pittsburgh’s climate, landscaping considerations may also include managing seasonal changes and ensuring proper drainage to prevent water damage. Have you worked with a landscaping professional to estimate the costs of creating a functional and aesthetically pleasing outdoor space? Incorporating these features into your overall budget ensures a cohesive and welcoming property, even if added after the home is built.

7. Insurance, Warranties and Property Taxes

Protecting your investment involves securing homeowners insurance once the home is built. Additionally, investing in extended warranties for appliances, HVAC systems, and other critical components of your home can prevent unexpected future expenses.

When planning your custom home, it’s a good idea to consider the property taxes associated with your brand new home. These taxes will be assessed and will come due shortly after you settle in, making it essential to budget for this additional expense in your financial planning.

Have you explored insurance policies and discussed coverage with your provider? Have you researched the local tax rates and understand when they will be levied?

8. HOA or Community Fees

If your custom home is part of a planned community or development, you may need to pay homeowners association (HOA) fees. These fees often cover community maintenance, amenities, and services but should be factored into your ongoing expenses.

Have you reviewed the HOA’s regulations and fee structures? Understanding these obligations upfront can help determine whether the community aligns with your long-term goals and financial plans.

Spacious living room with a large curved sofa, centered fireplace, artwork above, and multiple windows letting in natural light. Some post-construction adjustments you'll want to budget for include window treatments.

9. Post-Construction Adjustments

Once you move into your new home, small adjustments or fixes may be needed. This could include:

Addressing minor cracks or settling issues
Adjusting doors and windows
Adding window coverings and other furnishings
Touching up paint or finishes

While these expenses are typically small, they’re worth including in your budget. Have you set aside a post-construction fund to handle these minor but inevitable fixes?

Final Thoughts

Building a custom home in Pittsburgh is a significant investment, and proper budgeting is essential to ensure a smooth process from start to finish. You can create a realistic financial plan and avoid unpleasant surprises by accounting for hidden costs—from site preparation and permits to design changes and landscaping.

Creating a custom home offers a unique experience compared to working with a regional builder, where you simply tour a model home and develop something similar. Throughout the custom home-building journey, you will encounter numerous decisions, each building upon the last.

To help you confidently navigate this process, download our free guide, “Building Your Custom Home,” and discover what to expect at every stage of the journey. Embrace the excitement of designing a home tailored to your lifestyle and preferences!

At Prime 1 Builders, we specialize in providing a streamlined, informative, and memorable building experience. Our team is here to guide you through every step of the custom home construction process, ensuring no detail is overlooked.

Ready to start your journey? Contact us today to schedule a consultation and make your dream home a reality.