Hidden Costs of Being Your Own Contractor When Building a House

The popularity of HGTV, books, websites, and YouTube make even the average homeowner believe they are fully prepared to take on the role of or know how to be a builder so they can save money building a house. This isn’t to say that you couldn’t be your own general contractor but if you don’t have the know-how, you might not save much money by assuming all of the risks and significant time involved with building your own home.

What Does a Builder Do?

The brief overview of being a builder is compiling bids, ordering materials, and scheduling work but the job is much more complicated than that.  

A builder reviews the plans to look for problems, estimates the cost of materials, locks in quotes for materials, schedules inspections and deliveries, and tracks accounts payables and receivables. Builders also develop relationships with subcontractors and suppliers, which makes it easier to work with them. Repeatedly working with a subcontractor saves money since negotiations can take place which create better deals. When you hire a custom builder to build a house, you get someone to handle all of these complicated processes.

How Much Does a Builder Charge?

Builders usually charge 20 to 30 percent over the construction costs in order to compensate themselves for their services. This extra cost goes into the following:

  • Knowing which building materials and details tend to last and which to order at what time, etc.
  • Having an accountant/bookkeeper keeping track of expenses
  • Having all of the necessary insurance for the worksite and people
  • Covering office expenses for your project
  • Covering materials and tools that are used
  • Providing a detailed warranty for the home

This builder markup covers the above costs and much more, in the form of knowledge, insurance, and procedures.

How to Be Your Own Custom Builder When Building a House

Pouring drivewayIf you would rather be your own builder instead of hiring a builder to build a house, being organized is the key to successfully building your home. The main items you need to complete as your own builder are acquiring all of the necessary permits, honing the plans and specs, creating the budget, selecting the necessary materials within that budget, soliciting bids, lining up subcontractors, negotiating with suppliers on costs, and scheduling and overseeing the work. As with any construction project, there are pros and cons of doing it yourself.

Pros of Being Your Own Builder

  • You can potentially save some of the construction costs (if everything goes as planned).
  • You have full control of the project.
  • You pick out all of the details of your home down to the lightbulbs.
  • You are in charge of the schedule.
  • You are in charge of cost control for your project.
  • You are in charge of hiring the subcontractors.
  • You get the overall satisfaction of building your own home.

Cons of Being Your Own Builder

  • You have to eat the costs if you hire someone unethical, such as an electrician that takes your money without doing the job. If that happens, you have to hire someone else to finish the job, usually as an extra expense, or clean up the mess yourself.
  • Time is money when it comes to being a builder. If being a builder isn’t your area of expertise, it will take you longer to do than a trained professional, which will cost you more money in the long run.
  • You are in charge of the schedule which includes timing subcontractors.
  • You have to consider the cost of everything from the structure down to the lightbulbs.
  • You run the risk of more problems due to inexperience. More problems = more money.
  • Construction loans are much more difficult to obtain as your own builder.
  • You don’t have a network of connections that can help you smoothly obtain everything from permits to supplies.
  • Being your own builder can be very stressful due to the amount of work needing to be done. 

Start Small With Other Projects

Now that you’ve started to weigh the pros and cons of being your own builder, try starting with a smaller project to see if you are up to the task. Try your hand at a home remodeling project on your current home. Treat this smaller job just like you would for building a house. This will give you the chance to see how you would handle and try to resolve any issues that arise. If it doesn’t work, you can hire a general contractor for the home renovation.

How Much Can You Save by Building Your Own House?

Custom Farmhouse on LakeIf everything goes smoothly and you have good organization, are a quick learner, have the time and interest to plan and manage the project and have good financial and business skills, you can potentially save some money by building your own home but is it worth it?

Many home building projects that aren’t well organized tend to go over by as much as 50%, even with clear guidelines for the overall investment. Having a ballpark estimate is a good starting point. You can do a search for “custom home builders near me” to inquire about rough estimates. Make sure to clarify to the contractor you are looking to get a rough estimate for the cost of building a home.

With Kurk Homes, you not only get our quality construction but our 20-year structural warranty, twice the industry standard, and a quality team of professionals that can guide you every step of the way.

What Are The Hidden Costs of Being a Builder?

If organization, bookkeeping, scheduling, handyman abilities, homebuilding know-how, and time management aren’t your strong suits then being your own builder may not be for you. Unexpected project interruptions and bad contractor work can tarnish the fun and excitement of building a home. Remember, the main benefit builders have are the relationships they’ve established with the subcontractors who complete their work, and the ability to stand behind their work with a warranty program.

In the end, time constraints and unfinished or bad subcontractor work can extend the project, costing more in the long run. The following are some ways to save costs, which will help you get more out of your budget.

A Few Tips to Save Money When Building a House

  • Scale back on the sheer size of your project without sacrificing the space you realistically need.
  • Make sure you plan well enough to make very few changes once construction starts. Any change you make after you start eats into your investment.
  • Evaluate whether you need luxury items that cost more such as resort-like bathrooms, wine cellars, and high-end finishes.
  • Design parts of your home to be finished or expanded later, such as the attic, basement, garage, deck, and porch.

Contact Us To Discuss Building Your Custom Home With a Team of Proven Professionals

Whether you want to build on your lot, design a home from an existing custom plan, a Southern Living plan, or create a plan from scratch, Kurk Homes can handle it all. We take pride in going above and beyond to make your dream home a dream building experience. Kurk Homes has been designing and building from the Gulf Coast to the Hill Country for over 30 years. Contact us today to make your dream home a reality.


Hear What Our Customers Are Saying

“I could not speak more highly of this company. Kurk Homes offered me such a wonderful building experience. From the first day we started designing the home, we were so impressed with the level of customer service we received.”

Mariana R.


“After months of researching those who build in the Texas hill country, we decided on Kurk Homes with the help of Paul in the New Braunfels office. One thing we observed from the start was the involvement and professionalism of co-owner, Chris McGinley. Along with other prospective clients, we were able meet him at one of his “Hard Hat Home Tours” where we saw the quality being built into that home.

After signing a contract, Lisa, the pre-construction coordinator, provided a written list of initial steps which was quite helpful. Once activity started at the site, the Construction Manager, Larry, emailed an update every weekend detailing that week’s progress. Upon Larry’s retirement, Lorenzo took the role of Construction Manager, and continued the updates. Someone was always available to answer questions and provide help in a timely manner. We saw Lorenzo overcome many challenges toward the end of the project, always with a smile (behind his mask!), a helpful solution, and willing support from Cole. It is obvious that the McGinley family has taken care to hire staff with an extremely positive attitude and high degree of competence.

We received the keys to our home two days ago, and it has turned out to be all that we hoped for.”

Wayne M.


Tags: building a home, Tip of the Month, custom home