by Home Nation • Published Jan 15th, 2024
Is the development of your home building site included in standard home construction costs?
First let's define what site development is.
A typical builder will take a lot that is already developed - such as you would find in any subdivision - and build on that. These lots have been cleared, they have been leveled with either excavation or fill dirt, and will have streets and often also utilities run up to the property lot line, either in the front (street side) or rear of the property.
However where there is a virgin land site that has never been developed, all of this will have to be done prior to starting the actual home building process.
In some states there will also need to be an environmental study or drainage plan to determine the impact of building prior to clearing and excavation. You may even need to obtain a clearing permit from the County before touching the site. You will almost always need a survey and site plan up front as well.
Additionally there may be impact fees assessed by the County or State on top of the hard costs of site development. All of these costs need to be added to the raw land cost to determine exactly how much that lot will cost you. A builder looks for the cost of a developed building lot to be no more than about 20-30% of the appraised value of the completed home.
While some builders who build on lots outside of subdivisions will offer site development in their building package, the unknown costs associated with site development are always over and above the actual construction cost of the home itself. That's why when you buy a developed lot it is more expensive than raw land, because those costs are already factored into the price.
