In this article we're going to cover just what it really costs to build your new dream home with all the fixings.

Your new home. We're not talking about moving into somebody else's nest. We're talking about digging up the ground, laying foundation, putting up the walls and everything else involved in turning nothing into something. Almost sounds like magic when you think about how much work is involved. But there's nothing magical about the cost. Building a new home is expensive. We're not talking buying a diamond ring for your fianc expensive. We're talking astronomically expensive.

How expensive exactly?

The first thing you have to do is prepare the lot. You can't just put homes up any old place you feel like. The lot has to be laid out, dug out, everything has to be just right. The cost for this alone is a cool $97,000 as of 2005. And that's for just 2800 square feet. Back in the 1980s you could buy two homes for that amount of money. Now all you get is ground.

Then there is the total construction cost of the house itself. A lot of work goes into building a house, the foundation, walls, roofing, plumbing, etc. That's why you don't build one of these things overnight. It takes months to build a new home. The construction cost as of 2005? Would you believe $195,000? That was the cost of four homes in the 1980s. But we're not even close to being done.

Then there is the financing cost of building a new home. Unless you've got money laying around in your mattress you're not going to be able to build your new home without getting a loan from a bank. The financing costs are over $6,000.

But we're still not done. You then have your overhead and general expenses. This includes what you have to pay the workers. They don't work for free. Your overhead costs are not a drop in the bucket. We're talking over $21,000 here. That alone would have bought you a new home in the 1960s.

Then you've got what they call your marketing costs. Hey, you're not building a home just to look at it. Unless you're planning on moving in yourself, if you're planning on selling the home for a profit, which many people do, you've got to advertise. Marketing costs are relatively cheap but not a drop in the bucket. We're talking about a price tag of over $7,000 in 2005.

Then finally, if you're selling the house, you've got your sales commission. The person selling the house for you isn't going to do this for nothing. Sales commissions are huge, which is why many people go into this field. The sales commission for this particular house is about $11,000. The amount that's left over, if you're planning on selling the house is your profit. That comes out to about $36,000.

Yes, building a new home is not only time consuming but it is also very expensive. So make sure you know what you're getting into before you dive into a project like this.