The exact price of your home can be determined only after the design and all your selections are complete. Throughout the design process, watch for items you want that you can add later if the total price exceeds the budget. A good design team can help you identify these details and point out many alternatives. Your builder can assist with a rough budget from the beginning, but the numbers change with each choice you make. The working budget is constantly fluctuating.

Builders use three basic methods to price homes. One is fixed-price. This means and the builder both know the cost of the home described in the plans and that is the price you pay unless you and the builder agree to changes later. Another method is cost plus. The "plus" refers to a percentage of the cost of building the home, the builder's margin for overhead and profit. The percentage is fixed but the dollar amount may change, depending on material prices and decisions you make during construction. The third method is fixed fee. The builder sets a fee for managing construction of your home and that fee remains unchanged. The cost of the home itself can change if you make changes or site conditions result in extra charges.

However it is calculated, the price of the home appears in the purchase or construction agreement along with a draw schedule as determined by the construction lender. A draw schedule sets out the timetable and procedures for paying bills during construction. Keep in mind that your home is being built for the first time. As construction progresses, some modification may be necessary to make all the components work together successfully on the site. The final cost of your home may also change due to items such as:

• Allowances. If you have not made final decisions in certain areas - for instance, floor coverings - an "allowance" will be included in the pricing. This gives you more time to consider these selections while a definite price for the new home can be set. If the allowance is $1500 and your final choice totals $1650, you will pay the additional $150 when you sign the order. If the total is $1400, the difference is credited to you at closing.
• Reimbursable Expenses. The cost of some aspects of construction cannot be determined in advance. Your contract might provide for reimbursable expenses. These include such items as establishing a well for your water supply or handling unexpected site conditions such as large rock formations.
• Change Orders. Although changes are possible during the building process, once blueprints have been drawn, engineering completed, and a building permit obtained, even a minor change can necessitate redrawing, re-engineering, and re-approval by the building department and homeowners association - costing both time and money. Take full advantage of your deign meetings to arrive at a plan that expresses your new home dream and minimize changes to avoid extra costs or extending your home's construction schedule.