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Approximately 20,000 self builders build their own homes each year. They all have different experiences, some good and some bad. To avoid the bad experiences you will need to take the following steps:

1. Step one.

Prepare your finances.

This is the single critical element in any project and it is nearly always the cause of considerable hardship and distress. For two reasons, one the finance is usually left until after the site has been bought and plans have been drawn up. This causes distress because you are trying to fit your budget around your dream home. Sorry folks but it doesn't work that way. You need to know how much you can reasonably afford and then fit your dream home into your budget.

The second reason is that by trying to fit your budget around your dream home you are running the risk of running over-budget. This then forces you to refinance which puts additional pressure on your finances.

Before you even look for land you need to decide what you can afford to spend. This should include all of the following; Land purchase, Professional fees, NIE and Water connection fees, Building costs, Internal fixtures & fittings, Painting & Decorating, Landscaping services, 15% emergency contingency fund (should be 15% of your entire budget). However you will not yet know what a lot of your costs are going to be just yet so all you will be able to sort out at this stage is a top figure.

Lets say that that figure was 350,000. Now you need to go to a mortgage company and have the finance put in place. This is especially important if you need financial assistance in order to buy the land.

2. Step two.

Work out your basic costs.

This is where you get a basic grip of the figures. First things first. Lets take away the 15% contingency fund. That's 15% of 350,000 = 52,500. So now you can open a separate bank account and put that money safely away and forget about it for the moment.

Done that? Good, lets move on.

There are a lot of items for which, you will need to get a feel for the cost of, these include for the following;
Land purchase price, Building costs per sq foot or Metre squared depending on which system of measurement you are most familiar with. Internal fixtures and fittings, Landscaping and professional fees which should include most of the following, Estate agent, Solicitor, Architect, Engineer, Project Manager, Water and Electrical connection fees.

Ok so whats next?.

The next thing you need to do is to decide what you want to build. Is it a retirement bungalow, a dormer, a large family bungalow or a large two storey home? It is here that your vision of a dream home usually clashes badly with the financial reality. But better now than later.

Building costs vary from region to region but it averages out at around 80 per sq ft. An energetic and pro-active self builder will be able to beat this figure by quite a bit, but for most of us the figure of 80 is accurate enough.

So what does this mean? Well lets assume that you are going to build a 2000 sq ft family bungalow.
This would equate to approximately 160,000 to complete the build cost. This figure includes for all professional and connection fees and assumes for a modest selection of fixtures and fittings.

So if you take your original budget of 350,000 less the 15% emergency fund 52,500 = 297,500 and then subtract your estimated building costs of 160,000 and this will leave you with 137,500 for the purpose of land purchase.

So now you know two things. One, the cost of your new home cannot exceed 160,000 and two, the cost of land cannot exceed 137,5000. You cannot use the contingency fund. That is for emergencies only.

Step 3

Creating a building budget.

Lets assume that by this stage you have secured your finance a bought your plot of land. Lets assume that it cost you more than anticipated, which is a normal occurrence. Lets call the figure 150,000. That straight away puts you 12,500 over budget.

At this stage you need to get plans drawn up. Make sure your Architect or designer knows exactly what your budget is. Remember its 160,000 and make it clear that you can't afford to go over this figure. You need to be very tight with your figures and close down immediately on anything that threatens to push the figures upwards.

The best way to control this is with an excel spreadsheet. List every item that you can think of. Every labour cost, every material cost, every professional fee, the list goes on. Once you have in this format you can very easily see the bottom line.

Get at least six quotes for everything. Buy your materials in bulk from a builders merchant in order to get the best discounts. It will be more beneficial to buy all the materials directly and get the discounts rather than through a General Contractor where you will probably be charged full price and a 2 1/2 % handling fee to boot.

Create sheets with the following headings; Total Cost Summary, Trade Cost Summary, Labour only summary, General Materials Summary, Foundations & Groundwork, Superstructure, Plastering, Plumbing, Electrical, Roofing, Energy Efficient Systems, Fixtures & Fittings, Painting & Decorating, Landscaping.

Once you have all of this done, you can go and get quotes and prices. Be pro-active about shopping around for the best price. keep track of all changes and you won't go far wrong. Once you have your figures in this format it is easy to control your spending as you will be able to see exactly where you are in relation to the building process.

Building your own home is a very expensive process, both financially and emotionally and it is in your own interest to make sure that you don't go over budget. Taking the time to work out your finances and budget and then sticking to it, will ensure that you will come through the self build process relatively unscathed.

Ed Gordon is a Timber Frame and Self Build Consultant, who is available to offer practical advice to self builders in a wide range of building issues. Ed can also provide planning permission services through out the UK and Ireland as well as specialist knowledge of timber frame and energy efficient systems. For further information go to http://www.gts-timber-frame.com and get in contact with Ed through the contact us page available through the drop down menu.