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Anticipating the unforeseen expenses of building a custom home in Houston, TX

Building a Custom Home

Building a custom home is a sizable undertaking that brings one’s ultimate goal of owning the house of their dreams closer to reality. Some are even bold enough to DIY the construction of their dream home. However, in the course of construction, the project may encounter some hiccups with the potential to delay or, in the worst possible scenario, derail the journey toward completion. These hiccups usually stem from getting sideswiped by unforeseen expenses.

That’s why preparation is the key for the construction of your customized home in the exciting city of Houston, TX to move smoothly and without delay. This includes familiarizing yourself with all the financial requirements of this endeavor.

To help you out, this guide below will show you the various financial aspects to factor in when you plot out the roadmap to the completion of your highly anticipated custom home in Houston, plus other useful information to make your building experience positive and hassle-free.


Financial Aspects

Before checking out the materials to use, the layout to be drawn, the manpower needed, and other physical details of your planned custom home build, the one thing you need to prepare for is the budget for this gargantuan task; more so if you intend to go DIY with the construction. YouTube and TikTok videos may be able to show you the finer aspects of creating the perfect living spaces for your customized abode but they won’t be able to give a full rundown of the expenses that fueled the projects.

To give you an idea of these expenses that will go into the construction of your customized home in Houston, here’s a detailed list. Note, though, that price ranges here are only approximates. It’s still best to get price quotes from a reliable home builder with years of experience working on custom home construction in Houston.

Site preparation

Average price range in Houston: $3,000-$10,000+, depending on factors like lot size and complexity

The adage, “You can’t build a great home on a weak foundation,” underscores the value of site preparation before the actual construction of your custom home in Houston. This entails detailed groundwork to prepare the land, evaluation of its stability, and finding out if it could support the structure of a house.

In preparing the lot for your new home, the following are implemented:


This involves the evaluation of the site’s soil conditions, water drainage patterns, topography, and environmental factors. Results of this assessment dictate the approach to be made once construction of the foundation starts.


The site must be cleared of debris, existing structures, trees, vegetation, rocks, and other obstacles, then gathered and prepared for off-site hauling. Clearing should take into account safety, proper disposal, and recycling to minimize environmental impact. Once demolition begins, potential hazards must be addressed by having safety measures in place.


This involves contouring the land to its desired slope for effective drainage, prevention of water buildup around the property, and minimal soil erosion.

If the site requires excavation, the digging of foundations should be precise. The size and accessibility of the area, the type of soil or terrain, the cost of labor, and the cleanup costs should be taken into consideration when drawing up your budget.

Building materials and supplies

Average price range in Houston: $165-$300+ per square foot, depending on quality and finishes

Quality building materials make a stable foundation for a good custom home. Roofing, structural foundation, exterior and interior finishes, flooring, fixtures and hardware – everything has to be ordered. Depending on their availability/scarcity, these materials could rack up enormous costs if not anticipated in your budget. Sometimes, for materials that are out of stock, or it may take weeks to months before they are delivered. Thus, construction of your Houston custom home may also encounter delays which could get costly.

Choosing high-quality materials for custom homes such as natural stone, structural steel, high-performance glass, or engineered wood is bound to bring up your overall construction costs. Then again, investing in these premium-quality materials makes for a more durable and energy-efficient home rather than opting for low-cost materials with no lasting value. These are some of the options you have to weigh as you consider your budget.

Here are some pro tips on balancing your budget for the materials and supplies of your custom home in Houston:

  • Allocate a large portion of the budget to high-quality materials that ensure energy efficiency. These materials promise long-term savings, offsetting the cost of investment.‍
  • Make final decisions early about material selection and avoid making last-minute changes. Frequent mind-changing leads to more delays and additional costs.

Utility connections

Average price range in Houston: $5,000-$15,000+

Every home needs utilities to make its residents’ lives comfortable and convenient. The fees for having these connected will vary depending on a number of factors from the location and size of your lot to the number of utilities to be installed. Thus, this deserves its own budget allocation.

As you begin construction of your custom home in Houston, note that you’ll also need temporary power or heat before the permanent utilities are installed.

Change orders

If you take on the services of a professional builder or contractor, you usually have a construction contract written up and signed by you and the builder/contractor which seals the deal for the implementation of the project. The change order puts forward a recommendation to amend terms in the construction contract that could alter the builder’s/contractor’s work scope. Whether it’s a desire to add more windows or change floor finishes to your custom home in Houston or a request for the extension of the project timeline by the builder/contractor, a change order initiated after the contract is signed will typically cost more due to construction delays.

Common costs associated with change orders include:

  • Additional labor costs due to rework or additional work
  • Costs of additional materials
  • Changes to regulations required for modifications
  • Changes to the design or work scope of the builder as requested by the homeowner
  • Unforeseen issues revealed only during construction

To manage change orders and keep the disruption at a minimum, you may

  • Talk to your builder in advance and document the requests;
  • Add a contingency allowance amounting to 10% to 20% of the total budget;
  • Communicate with the builder regularly to ensure that changes are immediately identified and addressed
  • Have a clear understanding of the proposed changes, the builder’s work scope, and the cost implications before signing on the dotted line.
  • Work closely with a Houston home builder at the earliest stages before finalizing the contract so there are fewer chances of making change orders.

Permit fees

Any kind of construction in Houston, whether for residential, commercial, or recreational purposes, requires obtaining local permits to build on a lot. In the aspect of housing construction, H-Town lorded it over several metropolitan areas in 2023 with an average of 5,766 home permits issued per month – the highest in the country. The numbers are a reflection of the frenetic energy occurring in Houston’s housing market.

Applying for permits and waiting for approval take time and effort but these are necessary steps to proceed with construction sans any legal or safety hitches and to avoid costly fines and delays.

The estimated cost for building permits for custom home construction in Houston is between $2,000 and $5,000+. Other permits to secure are:

  • HVAC permit: $250 to $400
  • Plumbing permit: $50 to $500
  • Electrical permit: $10 to $500

Additionally, if you have a custom home to build in Houston, you must be prepared to spend for environmental assessments, design or engineering costs, rezoning or variances, and other fees related to the permitting and approval process.

Contingency fund

Everyone has their good and bad days – so does the act of building a home from scratch. Things like delays, bad weather, or material shortages could dampen the smooth flow of construction. For times like this, it helps to have a contingency fund ready.

Set aside a reserve fund of around 10% to 20% of the total construction cost to cover unforeseen events. Depending on the complexity of the construction and your risk tolerance, you may want to prepare a higher backup fund for your peace of mind. That way, whatever happens, the construction of your dream custom home in Houston will be completed as planned.


Average price range in Houston: $3,000-$20,000+ depending on size and complexity

A picture-perfect custom residence comes with luxurious landscaping that enhances its curb appeal and elevates its value. However, a builder’s quote covers only the home construction. Transforming a blank outdoor space into a beautiful oasis is sure to entail additional costs. The American Society of Landscape Architects recommends allocating 5% to 10% of the total value of construction to landscaping.

Your budget for landscaping will go to:

  • The services of a professional landscape designer
  • Soil testing to know the type of plants that are suitable for your garden.
  • Landscape grading to correct the slope for efficient drainage
  • Hardscape features such as patios, fire pits, pathways, and walkways,
  • The plants, flowers, and trees to place in your outdoor space
  • Irrigation, sprinklers, and other watering systems
  • A drainage system
  • Fences and retaining walls

Should you decide to add landscape ponds, swimming pools, and gazebos, you may have to pour more funding into your budget for these special features.

Appliances and fixtures

Average price range in Houston: $10,000-$30,000+

If you prefer a fresh new look for your soon-to-be home, you’ll want to have a slew of brand-new furnishings, appliances, and other items that will make it comfortable, convenient, and safe. However, the cost of a home build doesn’t take these into account. Thus, it helps to factor in these costs in your overall budget to avoid getting sidelined in your home construction in Houston.

Apart from the usual stuff like furnishings and appliances, also consider the costs for things like new light fixtures, window coverings, and treatments. Some appliances like washing machines and HVACs may also require professionals to install them so make sure their service fees are also part of your budget.

When it comes to decor and furniture, a good approach is to prioritize the essentials first (sofa, dining table and chairs, dresser, and bed). From these anchor pieces, you’ll be able to allot a budget for additional furnishing and décor to make your home truly your own.


Building your custom home is a major investment – you’ll want to shield it from potential risks. That said, you could purchase a builder’s risk insurance for the construction. This type of insurance protects homeowners against any injuries or damages that may occur during construction. Builders and contractors have their own insurance but this is just for the property and construction materials.

Once the construction for a custom home is done, you’ll want to secure a homeowner’s insurance policy that protects your custom build from risks like natural disasters, fire, theft, and liability claims. Also required by mortgage lenders, this insurance has rates from $1,000 to $3,000+ every year, depending on the extent of coverage.


Delays in the construction process usually happen due to the following:

  • WEATHER. Heavy rains, strong winds, massive snowfall, and other extreme weather conditions may impede construction. Depending on the severity, weather-related delays may last from a few days to several weeks.
  • MATERIALS. Delayed or wrong deliveries, quality problems, shortage of supplies, or incorrect specifications.
  • SUBCONTRACTORS. Builders usually hire subcontractors for plumbing, electrical work, and other tasks. If a subcontractor fails to show up or deliver on time, this could interrupt the construction schedule.
  • DESIGN CHANGES. Variation, alteration, or deviation in the original design plans are bound to cause delays, especially if the design changes require major work.

Post-construction expenses

In the post-construction phase, there are still a few expenses that should be calculated in your budget. A homeowner is expected to shell out extra funds for cleaning costs, property taxes, moving costs, warranties, additional furnishings, and touchups.


Professional Guidance

A 2023 study by Houston’s Chamber of Commerce revealed that H-Town has garnered the highest construction rate for new homes. This recent boom in construction is a positive note to the persistent problem of a scarce housing inventory and a huge demand. However, with many reality TV shows, magazines, and social media posts depicting DIY home construction as an easy and exciting project, some people decide to hastily venture into their own.

While going DIY gives the opportunity to have full control of the home build, taking all that responsibility from looking for subcontractors to on-site inspections and more could become overwhelming. Consider these before picking up that brick.

  • THE RISK FACTOR. Since you aren’t experienced in construction work, you’ll likely put your custom home at a high risk for structural errors, quality issues, and cost overruns.
  • STRESSFUL AND TIME-CONSUMING. You need to learn the construction process, building and zoning regulations, site inspection, selecting materials, negotiating with subcontractors, budgeting, and more. These are bound to eat up much of your time.
  • HIGHER HIDDEN FINANCIAL COST. Some believe that going DIY allows them to save on builders’ fees. However, their lack of experience and knowledge in home building may result in more risks and errors during construction. In the long run, they spend more just to correct those errors.
  • DIFFICULTY IN GETTING A LOAN. Most lenders are not usually keen on granting loans to those building their houses on their own without the help of a licensed builder.

Hiring a professional custom home builder

Building your dream home is more than a hobby, it’s a huge investment. This is why it’s imperative to work with a team of professional custom home builders. Here’s why the benefits are far greater when you bring in professionals to your custom home build.


Professional builders have mastered the dynamics of home construction, including design intricacies, material selection, construction techniques, building codes, local community regulations, permits and approvals, and managing resources. They bring a wealth of experience and expertise to the table to ensure that the house is built according to the highest quality standards.


Working with a custom home builder gives you the benefit of having a reliable network of subcontractors to get the job done right and guarantee that your home is built with quality craftsmanship. Top subcontractors prefer working with professional builders with whom they have forged a long history of trust and partnership.


Since professional home builders regularly purchase supplies and materials in volumes, they have cultivated good relationships with vendors. Their strong relationship with the suppliers gives these builders better buying power in purchasing goods and services at a better price. As a result, you also benefit from getting the best price which translates to substantial savings.


DIY home construction takes your time away from your job, family, social life, and yourself. A professional home builder takes the hard work from your shoulders and allows you to focus on what matters in your life while enjoying the process of seeing your dream home become a reality.


Professional home builders are trained on the various safety protocols to implement during construction work. They make sure the home is built in compliance with building codes and safety regulations. As a result, their clients have peace of mind knowing that the structural integrity of the house is not compromised and free from potential financial and legal liabilities.


Hiring pros may seem like an additional expense upfront but it actually incurs big savings in the long run. Since they have the knowledge and experience in their field, they could make the necessary preparations and deftly avoid any costly mishap that may occur during construction. They could also guide their client on where to allot funds so that the latter could keep within their budget.


Why break your back from building your custom dream home on your own when you have a team of professionals who could take the hard work from you and still come up with a gorgeous home build for you to treasure? In Houston, the best there is would be Layne Kelly Homes.

Our years of expertise, high level of home-building experience, innovative techniques, and unparalleled customer service are what make us the top home builder in the Houston metropolitan area. We take pride in creating bespoke homes that you will cherish for many years. You may view our portfolio of custom home builds here.

Take the first step toward making your custom home build a reality! Call us at 832.441.9884, send us an email, or leave a message here.

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