How to Build a House in Illinois

Whether you want to build a house in a small town suburb or big city, the average cost to build a house in Illinois is higher than in most states. According to GoBankingRates, Illinois has the eighth-highest estimated cost to build at $223,329. One reason this cost is so high is that Illinois labor costs there are the highest in the country, tied with Hawaii at an estimated $27 per hour.

The cost to build a house depends on numerous factors, especially the location (the average cost to build in Chicago is $449,006 according to HomeAdvisor, for example), the size of the house, and the materials you choose.

Custom vs. production homes

Another important variable that impacts the cost to build a house in Illinois is whether you are building a custom home or a “production” home. In this article, we’re discussing the cost to build a production home, which is one that is designed and constructed by a builder within a community of several homes. With a production home, the land, materials, and labor costs are typically all included in one price, although you may pay an additional premium for some lots within a community.

Prices for custom homes, which are designed specifically for you, vary even more widely than the cost to build a production home. Often, you’ll pay for the land separately, pay for preparing the land with infrastructure, hire an architect, and then pay a builder to build your completely personalized home. The financing process for a custom home can be more complex than it is to build a production home.

Step by Step Process to Build a House in Illinois

From the day construction begins until move-in day takes an average of seven months in Illinois, but the timing can vary widely depending on the size and style of the home, the availability of materials, the permitting process, whether the subcontractors are available when needed, and even the weather. If your builder has already taken care of the permits and started the foundation, the process can be a bit quicker. The following steps are part of the journey you’ll take to build your Illinois home.

Budgeting for Your New Home

Unless you plan to pay cash for your new home in Illinois, your first step will be to develop a financial plan. You can start with your own budget to determine your comfort level with your housing payment.

Next, consult a lender for a mortgage preapproval. An early consultation helps you understand how much you can qualify to borrow and identify any issues with your credit that need to be addressed. Your preapproval letter doesn’t commit you to working with that particular lender, so you if want to switch later to a builder’s preferred lender, you can.

The price per square foot to build a house in Illinois averages $103 to $162, which would be $257,500 to $405,000 for a 2,500 square foot house. However, the price per square foot ranges from $300 to $390 in Chicago, sending the price up to $750,000 to nearly $1 million for a similar size house.

Breakdown of Expenses:

To understand better, here’s a breakdown of different expenses in relation to the overall cost of building a home in Illinois.

• Materials: 40 to 45 percent
• Labor Costs: 40 percent
• Lumber Costs Range: $25,000 to $65,000
• Insulation: $0.10 to $1.00 per square foot
• Roofing: $1,000 to $3,000 depending on the style and material you choose.
• Siding: $2 to $15 per square foot and concrete costs $1,000 to $10,000 or more for a house in Illinois.

Materials costs for the interior vary widely and depend on your choice of the fixtures and finishes, and the level of quality. You can spend as little as $1 per square foot or $5 or more per square foot for flooring.

Your housing budget should include property taxes, homeowner’s insurance, and homeowner association fees. Homeowner’s insurance in Illinois costs an average of $2,526 per year which is close to the national average of $2,305. Homeowner association dues vary according to your location and community amenities. Property taxes are high in Illinois compared to other states, with a statewide average rate of 2.16%, (nearly double the national average). The average property tax bill in Illinois is $4,527.

Don’t forget you’ll need cash for a down payment and closing costs. Closing costs vary by your jurisdiction and average 2 percent to 5 percent of the purchase price of the home.

Choose Your Builder

When you have a sense of how much you can spend to build a house in Illinois, you can begin to search for a builder. Most people start searching online in the location where they want to live and visit websites for communities and individual builders before touring models in person.

To find out more about a builder, you can visit communities where they have built homes, talk to residents about their experiences with the builder, and check reviews on a builder at TrustBuilder. Choosing the right builder has an important influence on the price and the quality of the home you build.

Line Up Your Financing

When you’ve chosen your builder and community, you’ll need to prepare to make a down payment and sign a contract. If your builder has a list of preferred lenders or a financing arm of their business, you’ll want to apply for a mortgage with one of those lenders.

You can consult another lender to compare rates and fees, but often you’ll benefit from using the builder’s lender with incentives such as paid closing costs and a streamlined experience. The builder’s lender will be in close contact with the staff to know when it’s the right time to lock in your rate and prepare for closing.

When you sign the purchase contract you typically need to provide a deposit that could range from a few thousand dollars to 10 percent of the purchase price. You could need additional cash to pay for upgrades that go beyond the norm for that community, and you may need cash for closing costs if your builder doesn’t pay them.

The good news is there are state and local homebuyer programs in Illinois for down payment assistance and financing.

Choose Your Lot and Your Floor Plan

The onsite sales professionals can help you decide which floor plan and which lot to choose that meet your needs and budget. Be certain you understand which features are included in the purchase price and which are optional. Some lots require an extra premium, so you’ll want to consider that in your financing.

The sales professionals can help you match the floor plan and the lot, since not every house can be built on every lot in a community. Ask about plans for the community that could impact your lot choices, such as future schools and shopping centers, and how much personalization is allowed.

Climate Considerations

While Chicago is known for its cold and windy winters, you could be susceptible to tornadoes, too. You may want to consider climate issues when you choose certain features for your home such as the roof style, windows, or siding. Your builder can help you make smart choices within your budget.

Permitting and Inspections

Before construction starts, your builder will need to obtain building permits. While there’s no statewide building code for Illinois, cities and counties have codes that must be met. Your home will be inspected multiple times during construction. You can also hire a third-party inspector, but you should consult your builder about when to schedule an inspection.

Timeline

The step-by-step process to build a house in Illinois takes an average of seven months, but your house could take less time or more time depending on the weather, the availability of labor and materials, and whether any construction was started before your contract was signed. Your best source of information while your home is being built is your builder. Communicate with them throughout the process, ask questions when you need to, and rest easy knowing your new Illinois home will be finished soon!