Understanding New Home Pricing: What Is It and How Does It Work?
There are two ways to price a new home. The first is to purchase in a subdivision. If you go that route, you will likely experience zero transparency in what the builder charges. The second option is the On Your Lot Homes approach, which will provide full transparency when your builder follows the four-bucket approach to a custom On Your Lot Homes build.
Everything is rolled into two buckets when purchasing a home in a Planned Unit Development (PUD). The price for the house and the price for the options. Once you add those two buckets, you have your PUD price for a new home. Doing so leaves a buyer with little or no flexibility in pricing or even how your home is sited on a lot.
At On Your Lot Homes, we want to give you a clear idea of the cost associated with each phase to allow you the flexibility to place value on the things most important to you. By doing so, you can make the best decision for your custom home-building budget.
Think of building your new home with OYL Homes as a “Four Bucket” process that would look something like the following:
Lot Cost $300,000
Base Homes Price $350,000
Additional Features & Allowances / Custom Options $100,000
Site Preparation & Permitting $175,000
Total Price $925,000
The pricing above is shown for illustrative purposes. Final pricing will vary depending upon the homesite, floor plan, and options selected. Site preparation & permitting costs vary significantly depending on county fees, lot size and scope of development work needed. Please contact us to schedule a cost estimate.
Based on the Four Bucket model, you control three of the buckets right from the start by selecting a base home style that fits your needs and then choosing just the right number of options, upgrades, and custom finishes that suits your tastes, along with a homesite that checks off all of the boxes of where you want to build.
The fourth box covers site improvement costs and is the most important one to watch. For example, building permits can vary in Maryland by as much as $50,000 per county. So even the county that you build in will have a significant effect on your final price.
Most homebuyers don’t know that there are many levels of just how “finished” a lot is and what is left to do to live on an unimproved homesite. Some lots require tap fees to connect to existing public water and sewer; others may require a new well to be drilled and a septic system installed. The On Your Lot Homes Site Preparation and Permitting process covers over hundred-line items to ensure that we get your final Site improvement “Bucket” in line with your build budget.
Homebuyers should never select a builder who chooses not to disclose the actual cost of placing a home on a lot. In such a case, a permit might be $10k less expensive, and some builders will keep that difference as extra profit.
Custom Home Design Services
At On Your Lot Homes, we are a top local Maryland home-building firm. With so many choices to consider when purchasing a custom luxury home, we are here to help. On Your Lot Homes is here to simplify the home-building process systematically.
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For answers to all of your questions, contact On Your Lot Homes today at (833) 289-6954 or reach us via email at build@oylhomes.com.
