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Scorecard

Are You Ready to Build a Custom Home?

NAHB Cost of Constructing a Home Survey research consistently shows that custom-home builds without a specific budget, owned lot, and complete design routinely overrun by 20-40%. Score your custom-home readiness across budget and financing, land and lot, design clarity, timeline, and decision-making and contingency to surface the gaps to close before breaking ground on a new build.

Last updated: May 2026

Custom home build readiness is a scored assessment of whether a property owner has the foundations in place to break ground on a new custom-home build. Readiness = (Budget and Financing) + (Land and Lot) + (Design Clarity) + (Timeline) + (Decision-Making and Contingency). US custom home build timeline (NAHB) typically target 12-24 months from groundbreaking with realistic schedule.

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What is Custom Home Build Readiness?

Custom home build readiness is a scored assessment of whether a property owner has the foundations in place to break ground on a new custom-home build. It covers budget development and financing, land or lot ownership and verification, design clarity and household alignment, target move-in timeline plus interim housing stability, and team selection plus contingency planning. The assessment surfaces the specific gaps to close before committing to construction.

The Formula

Readiness = (Budget and Financing) + (Land and Lot) + (Design Clarity) + (Timeline) + (Decision-Making and Contingency)

NAHB Cost of Constructing a Home Survey research consistently shows custom-home builds without specific budget, owned lot, and complete design routinely overrun by 20-40%; pre-build readiness is the foundation of on-budget on-time outcomes.

Worked Example

A couple has a target budget of $750,000 informed by initial builder conversations but no contingency reserve, has identified a specific lot under contract with zoning confirmed, has schematic design with an architect engaged, target move-in 20 months out with stable current home, builder selected with references not yet verified.

Budget and Financing: $750K informed but no contingency (medium)
Land and Lot: under contract with zoning confirmed (medium to high)
Design Clarity: schematic with architect (medium)
Timeline: 20 months out with stable interim housing (high)
Decision-Making and Contingency: builder selected, references not verified, no documented contingency (medium)

📌 Composite readiness lands in the upper-middle range. Highest-leverage pre-build work: add a 15-25% contingency reserve to the budget, verify builder references plus visit completed projects, push design to construction documents before bidding, and complete environmental review on the lot (soil tests, slope, drainage). With these foundations the build is on track for a confident groundbreaking.

Why This Matters

Custom home builds without pre-build readiness routinely overrun

NAHB Cost of Constructing a Home Survey and custom-builder industry consensus consistently show that the highest-impact predictor of on-budget custom home outcomes is the depth of pre-build readiness; builds entered without specific budget, owned lot, and complete design routinely overrun by 20-40%. The readiness work is materially cheaper than the rework it prevents.

The builder relationship is the most important pre-build decision

Industry research consistently identifies the builder selection as the most consequential pre-build decision; the wrong builder cannot be compensated for by good design or solid budget. Reference verification with completed-project visits is the single highest-leverage owner-side practice in custom-home readiness.

Common Mistakes

❌ Compressing the timeline below 12 months

Custom home builds compressed below 12 months routinely produce design compromises, finish quality reductions, and contingency-time elimination that surfaces as regret during the build. Plan for the realistic 12-24 month timeline with delay contingency rather than optimizing for speed.

❌ Skipping the contingency reserve to maximize budget for scope

Custom home budgets without contingency reserves routinely produce mid-build financial stress when the inevitable site or scope surprises emerge. The 15-25% contingency reserve is the foundation of build-day decisions made on merit rather than under cash pressure.

Industry Benchmarks

Category	Good	Average	Poor
US custom home build timeline (NAHB)	12-24 months from groundbreaking with realistic schedule	14-18 months	Under 12 months (compromise) or over 30 months (extended delays)
Custom home contingency reserve	15-25% of base build cost	10-15%	Under 10% or none
Custom home build cost per square foot	Region and finish appropriate within $150-450 typical range	Standard mid-tier $200-350 per square foot	Premium pricing without cost calibration or under-budgeted at $100-150

Source: NAHB Cost of Constructing a Home Survey, Custom Home Building Industry Reports, and AGC of America project research

Benchmark data sourced from NAHB Cost of Constructing a Home Survey, Custom Home Building Industry Reports, and AGC of America project research.

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One of the most common mistakes we see when working with clients: compressing the timeline below 12 months. Custom home builds compressed below 12 months routinely produce design compromises, finish quality reductions, and contingency-time elimination that surfaces as regret during the build. Plan for the realistic 12-24 month timeline with delay contingency rather than optimizing for speed.

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Frequently Asked Questions

How long does it take to build a custom home in the United States?

NAHB Cost of Constructing a Home Survey data places typical US custom-home build timelines at 12-24 months from groundbreaking, with additional months ahead for design, permitting, and lot preparation. Compressing the build timeline below 12 months usually requires sacrificing design depth, finish quality, or contingency time; planning for the realistic timeline prevents the trip-pressure decisions that produce regret.

How much does a custom home cost per square foot?

Custom-home build cost varies widely by region and finish level, with NAHB and Custom Home Building Industry Reports showing $150-450 per square foot as the typical range and luxury custom builds running $500-1,000+ per square foot. Land cost, site preparation, and design fees are typically additional. Engage 2-3 builders for a region-specific calibration before committing to plans.

What contingency reserve should I plan for a custom home?

NAHB industry research and custom-builder community consensus consistently recommend a 15-25% contingency reserve on top of the base build budget for custom-home projects. The reserve typically covers unforeseen site conditions, design changes, finish upgrades, and schedule extensions. Custom builds without contingency reserves are the most common source of mid-build financial stress.

Should I work with an architect separately or with a design-build firm?

Both paths work; the trade-off is integration versus specialization. Architect-then-contractor separates the design and construction roles, often producing better design depth and competitive bidding but more owner-as-coordinator work. Design-build firms integrate design and construction under one contract, eliminating the coordination role and the design-versus-build disputes that consume owner energy.

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Hire Employees, Use Subs, or Stay Solo?

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