Land
You Have a Budget, Now it's Time to Pick Your Address
Land will be the single largest portion of your construction budget. In this metropolitan area, the cost of the land could amount to one half (1:1 ratio) to one quarter (1:3 ratio) of the overall price of the home.

Don't buy the land in a vacuum before your builder has had a chance to help you determine how this cost fits into your budget. This could stop you before you start. The reason most projects don't get built is because the owners paid too much for the land. If you pay too much for a lot in relationship to the rest of the budget, or if you pick what appears to be a bargain lot only to spend more money on land development costs, there may not be enough money in the budget to build the home you want. Try out our Self-help Budget Calculator to see how this works.

Get your builder involved in the lot selection process. Have the builder walk your potential lot(s) and give recommendations and guidance to where the "hidden" costs might be. The builder can also advise you how your dream home might fit on the lots which you are investigating. Can it have a walkout? Will a pool fit? Most builders will do this free of charge and without any additional commitment from you.

What Happens to the Land?
Never enter the custom homebuilding process without knowing what your land development costs will be. On a typical one- to two-acre lot in Kentucky, the cost to develop your land could run between $45,000 to $100,000, making this the second largest line item in the budget, just after the cost of the land.

What is land development? It is excavation, hauling dirt off or onto the site, clearing trees, septic fields, sewer, water, utility connections, driveway, driveway piers, landscaping, engineering, permits, sewer, water, telephone, demolition, etc. This is a big budget number and the more accurately your builder can nail down the land development costs up front, the more accurate your budget will be.

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