You have decided you want to build a new home to reflect your current needs and lifestyle. I commend you for making that decision. Maybe you need to find a lot in a neighborhood or in the country or you may already have land to build your new home. No matter your current situation, the lot or land you want to build your new home on does impact the price to build that home.

What utilities are offered at the property? Electric and natural gas hookups are typically charged by the foot. For example, Consumers Energy charges a flat fee to install the electric & gas plus an additional $4.50/ft. to trench + $3.00 per foot winter charge if the work is to be done during frost season for both utilities. On property A, the gas and electric service needs to run 45’ so the additional cost would be $202.50 normally or $337.50 if installed during frost season. On property B, the gas and electric needs to run 200’ because you want the house to sit farther from the road. The additional cost in this scenario would be $900.00 normally or $1,500 if installed during frost season. The difference in price between both properties is $697.50 or $1,162.50 respectively.

How about water and waste? Does the property have city water and sewer or well and septic. If the property has water and sewer the municipality charges a tap fee. Tap fees can run $2,000.00-$4,000.00 for sewer and $5,500.00 + for water. Both will also have a monthly service charge. In addition to the tap fees for water and sewer and monthly service charges, there is also the cost to install the services. Installation is a per foot cost as well so just like your gas and electric scenarios the farther from the road a home is built the more costly the install will be. If the property needs well and septic systems, the costs involved include the permits from the county health department plus the cost to install the well and septic system. Wells can run from $5,000-$10,000 depending upon the type of pipe material (PVC vs. galvanized), size of pipe and depth of the well. The pressure system used, whether it be a conventional blader tank or a constant pressure system, also impacts the price. Septic systems can run from $5,000-$20,000 depending upon the soil conditions, number of bedrooms and whether a garbage disposal will be installed. The county health department determines the required system the septic company will have to install.

What does the land look like? Is it flat, rolling, steep hills, wooded, cleared, wet, difficult soil conditions, etc.? The ideal site from a builder’s stand point is a flat or slow rolling lot with a low water table, sandy soil and clear of any trees. Once you start adding in road blocks to the ideal site you start adding dollars. If you want to build in the middle of trees, trees will need to be removed and hauled away. If the site has a high-water table, engineering may be involved to stabilize the structure. You may not be able to have a basement or a lot of dirt would need to be purchased and hauled to the site in order to have a basement. This could cost in the tens of thousands of dollars. If the soil is clay, a lot of excavation work would need to be done to remove the clay plus the cost to bring in fill dirt to put around the foundation. Again, this may cost thousands of dollars. How far away from the road do you want to build the house. Depending upon the type of driveway that will be installed, asphalt, concrete or gravel, the longer the driveway the higher the cost.

Do you want to build in a neighborhood that has an association? Associations can be a double edge sword. In one respect it is great to have rules and regulations to maintain consistency and property values. On the other hand, the rules and regulations may require certain house sizes, specific exterior design requirements such as roof pitches and style and particular building materials to be used. All of these rules can and will have an effect on the price to build your new home.

Even though property taxes do not impact the price to build your home, it will cost you annually. Where you build, municipality, and amenities by your property will play a role in determining your annual property taxes. Some municipalities are higher than others depending upon the services they offer. Cities are typically higher than rural areas so make sure you take this into consideration for annual home costs. If this could impact your home affordability you can contact the assessor’s office and ask them to give you a ballpark figure for property taxes based on a particular property and estimated home value at the current tax rate.

Hopefully after reading this, you have a better understanding on why not every property is created equal and the property you choose may have a huge impact on what it will cost to build your new home.