It's generally cheaper to put a second story addition on an existing house than it is to expand out into the yard because you do not have the expense of another foundation. However, consider these variables before making your final decision:

Labor and material costs vary too widely from city to city, from state to state, and from region to region to give a definitive response to this universal question. But as a very loose guide, plan on paying $80 to $120 per square foot for remodeling construction and $100 to $150 a square foot for new construction. You will be able to refine this figure significantly once you enter into serious discussions with a contractor.

For larger projects, ImproveNet strongly recommends that you hire an architect or designer before you hire a contractor. Why?

But keep in mind that plans must be drawn, submitted, and approved by the building inspector's office before you can begin a project. Depending on the project's complexity, decide who will draw the plans: you, your contractor, or the architect.

Another value of an architect is that he or she can not only draw the plans and shepherd them through the approval process, but also can oversee all the construction, ensuring it is done right.

Structurally, such conversions are generally quite straightforward. But it will change the appearance of your house and will remove the age-old link between the house and the neighborhood of people sitting outside and talking with passing neighbors. To be fully aware of all the options that such a change might encompass, including types of windows, lighting, plumbing, and exterior finish, talk to an architect first. The architect will invariably have a wealth of ideas for you to draw on.

Building instead of buying is not for everyone. Having a home custom built offers many advantages. By working with an architect, you will have an efficient and beautiful home that works for you and fits the building site. On the other hand, building your own home can be a very stressful experience as well as a rewarding one. You may spend more money than if you simply chose a pre-built or existing home. Building is not a perfect science, but a learning experience. You may not reap immediate resale value relative to your expense if the right buyer and appraiser are not involved in the sale. So if you have found that perfect piece of property on which you would like to build, contact a local architect or designer who is experienced with design and construction issues in your area and can also provide initial site evaluation services. Keep your design and expectations simple and efficient. Your construction costs can vary significantly depending on many factors, which may include your region, the site, the design, local construction activity, as well as other factors.

You will want to find out how busy he is and how he intends to supervise your house. Will he do it himself, or rely on a superintendent? How many jobs does each person run? What type of contract does he usually use: cost plus, lump sum, etc.? Is he used to building homes of the quality you hope to build? Most builders have some standard building products and methods they insist on. What are his, if any? What type of warranty does he have? Ask about his license and insurance and that he provide you copies of them. References should be checked. Did he finish on time and budget or within reason? Was he reasonable to work with? How often did he have job meetings? Did he keep a clean and safe job site? Why should you choose him over his competitors? Look at samples of work and ask about budget ranges for certain types of projects.

Being a homeowner/contractor is a step taken by many with the idea of saving money. You may save money, but you must weigh that against the innumerable headaches and delays you will incur as a presumably inexperienced builder. You need to line up a crew of people who know what they are doing, someone to oversee that crew every hour, pay them, and complete all the tax forms. You have to get all the permits sufficiently in advance that work does not stop while you wait for a permit. You have to line up all the subcontractors: electrical, plumbing, painting, drywall, etc. It is almost a full-time job unless you have a construction superintendent you trust to do all this work on his or her own. Here's one contractor's view:

"I believe the best thing you can do is to pay a contractor as a consultant. That way you make the calls, etc., but he supplies the subs and suppliers. I charge 20% on my contracts and often I can buy materials and subs for less than you and add the 20% and still be under you. You will find there is a difference in pricing between a homeowner and a contractor. Suppliers expect numerous projects from me a year and only one from you. As most discounts are based on annual volume, it all makes a huge difference. What if an employee is injured on your job—make sure you are paying all required insurance on each of your employees. Sales tax as well if your state requires it. Also make sure you have appropriate insurance for the project. You will want a builder's risk package as well as a general insurance umbrella in case someone accidentally gets injured on the site [not a worker]. You can do it, just protect yourself and your assets by doing it right. If you choose not to hire a consultant, make sure you seriously check out referrals on everyone that might work on your job and contact your local building department to learn what is required. Talk to your insurance agent."

Prices vary widely, as you can imagine, for materials and labor. How large and complex the project is, your choice of fixtures, all weigh heavily. For very rough calculations, plan on $110 to $150 a square foot for a new house, from the foundation to roof and everything inside. Remodeling costs are lower, again very generally from $80 to $120 a square foot. If you have several bids that are far apart in price, go over every detail with the contractor, looking to see what is different and what might be left out of one bid.

Frequently Asked Questions

Additions and New Homes