This paper proposes a method to reduce error of reconstruted image by changeing domain block search in IFS image coding with the cost function. The IFS image coding with the cost function reduces error of the image by considering errors and bit-rates when a range block is divided. On the other hand we have proposed a method to improve the image quality by the extent of similar region search for domain blocks before the range block division. The proposed method improve further the image quality by combining the above two methods. The experimental results show the effectiveness of the proposed method.