In last weeks article I talked about whether it was actually worth it to build a house and several challenges that came along with doing it as well.  So this week I thought I would go in the opposite direction and give you some tips on how to save money building a house that I’ve been able to take advantage of as well and some that I have not.

Also feel free to add any ideas you know of in the comments below.  My goal is to make this article a huge resource for those that want to save some big bucks while building their house.  So let’s get started.

1# Get Someone To Haul The Dirt For You

One of the first ways I saved some big money when building my house was to have someone else haul the dirt away.  When it comes down to contractors and other companies are almost always looking for quality dirt for almost everything from construction sites to leveling out a plot of land.

If I were to have my contractor haul the dirt away for me it would run around $70 an hour and with them hauling out 20 loads of dirt which could get quite costly.  In other words it was going to cost me at least $1500 to haul the dirt from my basement away.   So I talked to a few people I knew and called a few trucking companies and was able to line up a deal where the trucking company would haul the dirt away for at no cost.  Not a bad deal.

Total Savings – $1500

2# Negotiate The Land Price

One thing I never thought about when I was getting started with the building process was negotiating on the price of my lot.  It didn’t strike me to do that until my lender had mentioned it to me.  It also just so happen that the lot I was looking at had been for sale for about a year which helped me out a little as well.

The lot itself was going for $24,500 which actually wasn’t that bad of a price, so I low balled him an offer of $20,000 and he answered back at $23,000 and we agreed on that.  In the end I know my situation might have been a little bit different but it can’t hurt to shot a lower offer especially if the lot has been for sale for a while.

Total Savings – $1500

3# Contractor Incentives

So we’ve made it through the first two tips on saving money to build a new house and I’ve already saved $3000, however this next tips saved me far more than the last two tips combined.  If you really want to save some money see what kind of incentive programs contractors are willing to give you.

Depending on your situation contractors can give you a special incentive if you are in the military, or a nurse, or even senior citizen   On top of that some contractors will give you special incentives just to get you to sign with them.  In fact, our contractor gave a $14,000 discount incentive and I’ll have to admit without that incentive I probably would have not built my house.

Total Savings – $14,000

4# Buy Appliances And Accessories Way In Advance

Another thing I did was buy all of my appliance way in advance.  By doing this you can save a ton, pay them off early, but even more it allows you time to look out for the deals.  So I started my search local and talked to several places but a lot of them were not giving anything much of a deal.   I also checked out Décor Planet online because of the variety of bathroom accessories and vanities they offer.  They have daily sales and I found it convenient to order online since they offer free shipping on most of their products.

Then I went to Sears and I’ll have to admit I didn’t think I’d be able to find any good deals their but I was able to get 10% off on three of my appliances and 15% off on the two most expensive ones.  In other words if I would have paid full price for the appliances it would have cost me $4300 or more but with the discounts I’m only paying $3700 for them and that even includes the delivery charge saving my around $600 total.

Total Savings – $600

5# Build In The Summer Versus The Winter

Now one thing I did that could have saved me some extra money was to build in the summer versus the winter.  Really I had no choice on the timing of building my house because my old house didn’t get sold until August and my contractor wasn’t going to be able to start digging until Mid November.  I guess I could have waited but that would have meant living in a rental house for several months longer, something my wife and I did not want to do.

The problem with building in the winter depending on where you live is that it’s hard to do things like pour concrete, lay brick, put a roof on or even drywall, since all these things require the temperature be a certain degree.  In order to do these job they have to temporarily heat me house with propane which can get a bit pricey.  In the end I’m looking at a $500 bill just because I built my house in the winter and not in the summer.  Ouch!

Could Have Saved – $500 

6# Get Referrals

Another unique way to save money is to get someone to refer you.  This might sound odd but contractors like it when people refer them more business.  In fact my contractor will pay anyone $500 if you refer someone to them and they sign a contract to build a house.  However you might be wondering how this saved me any money.

Well it just so happened that my brother wants to build through the same contractor so he refereed me to the contractor and I referred him a few months later and it was actually a win/win for both of us because we ended up getting a $500 rebate each.

Total Savings – $500 

#7 Look Around For Good Loan Rates

Finally, the last thing that saved me some big bucks was the mortgage rate. Right now we are in the middle of some of the best mortgage rates around.  In fact, just a few short years ago we were only getting around a 6% loan rate but now we are seeing rates around 3% to 4% depending on your credit and debt to income ratio.

However because I have a good credit score, and a low debt to income ratio, I was able to score a really good rate of 3.5%.  If I were to have more debt and a not so perfect credit score I could be facing rates around 4% to 4.5%.  In other words by having good credit I’m saving $1320 a year or around $39,600 over the life of the loan.  Sweet!

Total Savings –  $1320 a year

Final Thoughts…

In the end I saved almost $20,000 with all the tips I’ve given in this article.  So now that I’ve shared my tips what have you done to save money while  building a house?   Feel free to share your ideas and thoughts below

About Christopher

Chris is a personal finance blogger with Stumble Forward helping people avoid life's financial mistakes and live a higher quality financial life.

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Comments

  1. Chris, we have friends who built their house about 15 years ago, and they saved a ton of money by being their own contractors and then doing a lot of the interior work themselves. This could be risky if you don’t know what you’re doing, but I’ll bet you they saved a good 10k by doing their own trimwork, painting, floor installation, etc. I’m guessing that most traditional builders wouldn’t go for this, due to warranty and liability issues, but you could always ask…..

  2. Christopher says:

    That’s a good point Laurie. I considered doing my own painting but the problem with that was I had to keep up with the builders schedule and in order for me to do that I would have to take time off work and hire a few of my buddies to help me out. In the end their wasn’t a big savings in cost if I had to lose a bunch of time a work. As for the trim and other stuff I’m not good at wood work stuff and laying carpet.

    One thing that I like a lot about my builder is the fact that they have a very exact process of doing things which speeds things up dramatically. In fact we started digging on Nov. 20 last year and we should be in by the end of February, at least this is what they are telling us.

    Thanks for the comment.

  3. Great tips Chris! I know of some of them, but not all of them and will definitely keep them in mind when/if we build our own house. As a business owner myself, I can attest to #6. Personal referrals are the best and are the lifeblood of a small business.

  4. Christopher says:

    Thanks John. What’s even better is you don’t need to be someone who has built with the builder I’m using in order to get paid which is kind of nice. Thanks for the comment.

  5. Good to see that you are building a house because now is certainly the time to do it. I know a guy who is contractor and he pay for referral. Both sides win with a referral!

  6. Christopher says:

    I totally agree Brett the prices on materials are really sweet right now, in fact my builder raised a lot of their prices shortly after we signed with them so I think we defiantly picked the right time to build.

  7. Great post. I was very involved in the building of our home 12 years ago and it is amazing how much you can save by making a few phone calls and pricing your various options and doing your research. Good for you! Enjoy your new home!

  8. I’ve thought about building a home but for now I’m still working on the one I have. :) Your first tip is one I’m going to use for hauling concrete I need to get rid of. I’ve always found that if you look around a bit you’ll find great details.

  9. Christopher says:

    That’s a good tip Kyle. When I getting started I got quotes from everyone to the excavating company to put the down spouts in, to installing the water softener. This helped a lot to keep me on budget and getting a quote usually brings the price down a little as well. Thanks for stopping by Kyle.

  10. Christopher says:

    That’s a good idea John. A lot of times people will use old concrete to line creeks and shore lines to save them from washing away and I’ sure if you find the right person he may be able to cover the trucking cost to get it removed for you.

  11. Great tips. We are currently building a house and the dirt was used to level a beach area, otherwise it would have cost a lot to remove. We also used stones that were on the land to build walls and save on blocks. We asked the contractor to give us a step by step quote, and agreed on the first step, then when seeing the actual work involved and days of labor where able to bring the price down a bit on the next steps, as we were more knowledgeable.

  12. Christopher says:

    That’s a great idea Pauline. I know we used about half the dirt from our basement to raise the house up an extra 9 inches so we would be more inline with our neighbors, which also saved us on hauling extra dirt out. As for the quotes that’s an awesome way to budget yourself as you go so you don’t find yourself going over budget. Thanks for the great tips.

  13. I am in western Ky. I know ppl are always looking for fill dirt , etc. So if you have extra dirt laying around the site…not only can you get ppl to haul away for free by letitng them pick it up but most times they will buy the dirt back from you by the dump load or truck bed load full. So either getting free disposal or free disposal plus money for the dirt itself!

  14. Christopher says:

    If your getting money plus getting the dirt hauled away for free that’s a pretty good deal Cara. I tried to do that when I was building my house but all they would do is pay for the trucking. Thanks for the comment Cara.

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