How to Build a House in Maine

Maine is a picturesque state with coastal views, brilliant fall foliage, and, of course, delicious lobster rolls. Whether you’re looking to move there or build a vacation home, here’s how much it costs to build a home in the Pine Tree State.

The average cost of building a house in Maine is estimated at $187,222, which is a little higher than the average for most states, according to GoBankingRates. However, labor costs in Maine are lower than in most states, at an estimated $14.93 per hour.

Location is a major factor in homebuilding costs. Approximately 40 percent of the population of Maine lives in a rural county, where it is cheaper to build a house.  But Maine is known for its coastline, charming towns, and resort communities, so the price to build a house there can vary according to how close you are to the coast, and whether you choose to build in Portland, its largest city, or Kennebunk, a popular summer vacation spot.

The size and style of the house you’re building also impact the price you’ll pay to build a house in Maine.

Custom vs. Production Homes

The average cost to build a house in Maine also depends on whether you’re building a custom home or a production home. A custom home typically costs more because you’re paying for the land, preparing the site, obtaining permits, and hiring an architect and a builder.

When you build a production home, all those costs are combined into one price established by the builder. A production home is usually built within a planned community or alongside several homes built on land the developer owns. Production homes are usually less costly than custom homes.

In this article, we’re talking about how to build a production home in Maine.

Step-by-Step Process to Build a House in Maine

The step-by-step process to build a house in Maine usually takes about seven months.

To build a house in Maine, you’ll need to take the following steps.

Budgeting for your New Home

The first step to building a house in Maine is deciding your budget. First, review your finances and decide your comfort level with a housing payment in the context of your financial goals.

Generally, lenders recommend that your housing payment be 28 percent or less of your gross monthly income. That payment includes your mortgage principal and interest, property taxes, and homeowner’s insurance. More than likely, you’ll need to pay homeowner’s association dues, too. You may need to pay mortgage insurance if your down payment is less than 20 percent.

Besides reviewing your budget, you’ll need to decide how much cash is available for your down payment, closing costs, and cash reserves. You may want to talk to a real estate agent to get an estimate of how much your house is worth if you plan to sell it and use some of the proceeds to build a house in Maine.

Next, meet with a lender for a mortgage preapproval to realize how much you can borrow based on your fully documented loan application. Ask the lender if you qualify for any homebuyer programs or special loan programs.

The price per square foot to build a house in Maine averages $115 to $171, which would be $287,500 to $427,500 for a 2,500 square foot house. In most cases, 50% of the cost to build a house in Maine is allocated for materials, and labor costs are 30% to 40% of the price.

To calculate your monthly expenses, you can get an idea of the property taxes and homeowner’s insurance. Homeowner’s insurance in Maine is lower than the national average, while property taxes are higher in Maine than in many other states.

Homeowner’s insurance for a $300,000 home in Maine costs an average of $1,833 per year, which is 20% below the national average of $2,305.

The average property tax rate is 1.30% in Maine, compared to the 1.07% national average. The typical annual property tax bill is $2,597, which is above the national median bill.

To get an estimate of homeowner’s association dues, you’ll need to ask each community where you may want to build a house. Dues vary according to amenities and services that are included.

Choose your Builder and Community

Your next step will be to narrow your choice of communities and builders. It’s easiest to start online to develop a list of places to visit in person. Your online search helps you identify communities and builders in your desired location and price range.

You can look at floor plans, photos, community descriptions, virtual tours, and more to see if the homes appeal to you. You can also find reviews of builders at TrustBuilder®.

When you visit communities in person, you can ask about amenities, floor plans, optional features, and the construction timeline. This is also a good time to look for residents and ask them about their builders and the community.

Line Up your Financing

The next step is to sign a contract to start building your home. Typically, you’ll need to deposit with your contract.

Often, your builder wants you to finance the home with a preferred lender and close the transaction with their preferred title company. You’re not obligated to do this, but it makes sense to work with someone that knows your builder and is experienced with the new home building process.

You can also compare rates and terms with other builders before you decide which one to use. Sometimes builders offer incentives such as help with closing costs or to add an upgrade so you’ll finance the house with their preferred lender. Be sure to factor those incentives in before you make a choice.

Your lender will tell you how much cash you’ll need for closing costs, usually about 2% to 5% of the sales price, and help you decide on the appropriate down payment. Those payments are due when the house is finished.

Choose your Lot, Floor Plan, and Upgrades

There are multiple important decisions to make once you’ve chosen your builder and your community. You can work with the sales professional to decide which lot and floor plan fit your wish list and your budget. In some cases, specific lots will cost more money.

Not every floor plan can be built on every lot, so you’ll need to consult the sales professional to discuss your options. Ask about building plans to know what will surround your house when the community is complete.

You’ll also need to decide if you want some optional features available for your floor plan. Some builders offer packages of choices, while others allow you more personalization. Don’t forget that your budget will drive some of these choices. A sales professional and an interior designer can help you determine where it’s best to spend your money when you build a house in Maine.

Permitting and Inspections

Maine has a statewide building code that your builder must follow. There may be some additional building requirements set by local jurisdictions, too.

Your builder will manage all the permitting and inspection requirements while your home is under construction. If you want to have a third-party home inspection, your builder can tell you when to schedule it.

Climate Considerations

Some climate conditions to be aware of in Maine include hurricanes, high winds, heavy rain, snowfall, and rising sea levels. Depending on your proximity to the coastline, you’ll want to choose materials that are resilient to salty air and windy conditions. Your builder can help you address these issues with appropriate design choices and building materials.

Timeline

While your house is under construction in Maine, it’s important to talk with your builder often to see if the typical seven-month timeline will be met. Weather issues and material and labor shortages can cause delays, but sometimes a house is built more quickly. You also want to stay in touch with your lender to ensure your financing is ready when it’s time to move into your new home in Maine.