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Step 3: Calculating dollars per square foot

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Divide the total dollars from Step 2 by the square footage from Step 1 to establish your dollars per square foot. Easy, huh?

Alternatively, you can take your total construction budget, subtract the excluded items from Step 2, and divide by the square footage to determine how much you have available to spend per square foot.

For example, if you have a total budget of $350,000 available and your square footage is 2,500 square feet, your budget would be $140 per square foot. You can then tell a contractor that you can only spend $140 per square foot for construction of the house, not including land, soft costs, financing, hardscaping, and landscaping, but that price must include the garage, driveways, walkways, attached decks, and any unfinished space.

Building Your Custom Home For Dummies

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