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Building a new home

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robh1975

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Oct 30, 2006
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My wife and I are about to put our house up on the market and we are discussing whether we should buy existing or build our own. I prefer to build so we can build it like we want it, but I have some convincing to do.

For those of you that have built your home:

1. What advice would you give someone when talking to a builder?
2. What should we look out for / be cautious about?
3. Do you know if builders give you an allowance on some aspects of the house (example: If I were to do my own electric or have my uncles company pour my basement)?
4. Suggestions to help keep costs down?
5. Any other bit of information that would help a 1st time home builder.

Thanks in advance!
 
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krazykats

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1- Not much you can ask a builder except to see what they have built.
2- May want to do your own research for pitfalls, they can be anywhere throughout the job really.
3- Bestway a builder should do contract is Cost plus. It allows them to keep you in the loop and be honest. This way also allows for allowances and savings at every facet of the project.
4- Be careful of trying to save too much upfront in the project. Your goal should be to save on the existence of the home unless you want to sell in 5 years or something and take your profits.
5- take bids from several builders and feel them out. They usually use different subs and sometimes they actually use the same subs. Believe it or not builders aren't trying to screw you out of every dime but they do have to protect themselves in the process just like their subs and suppliers do too.
 
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dgtatu01

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Sep 21, 2005
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My dad's a banker. He says that the ratio of new home price to existing home price is as high as its ever been. That means the premium on a new home is higher than its ever been. IMO no value in building new right now, you can find an existing home that's 3 or 4 years old and has everything you would want size wise for 25% less than same size new home. That means you can change pretty much anything cosmetic you don't like and still come in much lower priced. I don't care how interesting or cool you think you are, you're wasting money if you think you can build something cooler than has already been built.
 
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krazykats

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I guess that could be true, but I am pretty sure you can save a lot of money building your house as opposed to buying a house that had a builder markup on it and now has an owners markup on top of that to cover the realtor fee.

Just saying.
 
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dgtatu01

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Within reason that's absolutely true. Sure you can hire an architect and design something out of the world, but you're talking about adding lots of $'s to the project. It takes 6 months to a year to build a home. Give me that long in the real estate market of any town and I can find a home just as nice as I could build for 25% less and alter it the way I want it and still come in %5-%10 lower than building.
 
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wildcat1973_rivals160373

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Dec 18, 2004
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Just a few thoughts off the top of my head...

1. Be realistic about your budget. Don't buy a house you can't afford.

2. Don't let your wife pinterest your builder to death. That stuff can get expensive.

3. "Hey, can we finish off that extra room in the basement? It's just a few studs and some drywall."o_O No, it's extra lumber, extra framing, extra electric, extra hvac, extra drywall, extra trim, extra paint, extra flooring, extra hardware, etc.

4. Making a change on a house can get expensive. As the above example shows, changing one item can trigger a tsunami of extra work orders for contractors.

5. See item #1. Don't be cheap. When you stretch your budget to the max, it causes problems. Every single time.
 
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krazykats

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Cabinets? That's your #1? Why not just set a budget like 12K or 5% of expected home value?

I'd imagine having a good lumber/window/door supplier that doesn't hold you up and burn labor dollars would be more important than cabinets.

But my father in law does custom cabinets which helps me a lot.
 
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krazykats

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Of course.

I can see what you mean by most argued about. There is so much detail in that part of the job I think a lot of my builders leave that for me in spec houses to figure or for the homeowner/cabinet guy on contract houses.
 
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80 Proof

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Jan 3, 2003
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dgtatu01 said:
Within reason that's absolutely true. Sure you can hire an architect and design something out of the world, but you're talking about adding lots of $'s to the project. It takes 6 months to a year to build a home. Give me that long in the real estate market of any town and I can find a home just as nice as I could build for 25% less and alter it the way I want it and still come in %5-%10 lower than building.
Click to expand...

You're talking out your ***.

I built my house and have nearly as much equity in it as I owe on the mortgage. No way I could buy a house like mine in the neighborhood I'm in for what it cost me to build this one.
 
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drxman1

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80 Proof said:
You're talking out your ***.

I built my house and have nearly as much equity in it as I owe on the mortgage. No way I could buy a house like mine in the neighborhood I'm in for what it cost me to build this one.
Click to expand...

How much did you pay the builder?
 
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sg24_

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Just sold a home and bought a home that was under construction. We had look around for months and got what we wanted. Only the ground was broke when we agreed to purchase so we designed what we wanted.

We had our financing done first and knew what budget we wanted. During the planning stage we had our must have items that we did not budge on. The builder shot a price we thought was too high so we walked. He made concessions to his price and came back with a better offer and we accepted. We asked anything and everything during the process.

To keep cost downs you may want to consider what materials you want inside your house such as flooring, appliance options etc. Or if the builder will allow you to do some of the work yourself.
 
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krazykats

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Not saying a builder won't allow you to do work, but you have to understand the headache that can cause the builder.

One of the guys I sell to uses that exact strategy. Pours a foundation and sticks a for sale sign up ASAP. Once he is rolling he usually sells the house and it allows the owner to pick out the finishing touches and removes a lot of his headache from homeowners changing everything along the way. It's amazing how indesicive people truly are when it comes to somethings like this that is one of the biggest decisions they will make in a lifetime.
 
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sg24_

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krazykats said:
Not saying a builder won't allow you to do work, but you have to understand the headache that can cause the builder.

One of the guys I sell to uses that exact strategy. Pours a foundation and sticks a for sale sign up ASAP. Once he is rolling he usually sells the house and it allows the owner to pick out the finishing touches and removes a lot of his headache from homeowners changing everything along the way. It's amazing how indesicive people truly are when it comes to somethings like this that is one of the biggest decisions they will make in a lifetime.
Click to expand...

We just had two changes to his plan on our home. We moved a room from the back to the front was the main one. It was also what he suggested that he was thinking of doing. My wife chose all of the colors and finishes. Seemed to go very smooth.

Our only issue was he over priced the sidewalk and driveway. That is why we walked at first. He quoted a different price on what the written proposal stated.

Overall thought it was the way to go. We got into a great neighborhood with the house we wanted.
 
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ndk_rivals308474

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This has been hinted at a couple of times, but I don't know if it has been said directly: have a written contract that is clear and unambiguous. You and the builder should both know exactly what you are getting and how much it is going to cost. There will always be some things are unforeseeable that have to be addressed. But iron out as many of the details and specifications as possible in advance and have an indisputable price set for those things.
 
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krazykats

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sg24 said:
We just had two changes to his plan on our home. We moved a room from the back to the front was the main one. It was also what he suggested that he was thinking of doing. My wife chose all of the colors and finishes. Seemed to go very smooth.

Our only issue was he over priced the sidewalk and driveway. That is why we walked at first. He quoted a different price on what the written proposal stated.

Overall thought it was the way to go. We got into a great neighborhood with the house we wanted.
Click to expand...

That's not bad, I've certainly seen worse and heard a lot worse!
 
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BBUK

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May 26, 2005
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dgtatu01 said:
My dad's a banker. He says that the ratio of new home price to existing home price is as high as its ever been. That means the premium on a new home is higher than its ever been. IMO no value in building new right now, you can find an existing home that's 3 or 4 years old and has everything you would want size wise for 25% less than same size new home. That means you can change pretty much anything cosmetic you don't like and still come in much lower priced. I don't care how interesting or cool you think you are, you're wasting money if you think you can build something cooler than has already been built.
Click to expand...

Not sure what kind of lending he does. That may be in Kentucky but not many other places. Many factors go into housing prices. It's not that cut and dried. BUT, if you want to cut costs keep a realtor out of it. Do your own business. That will save 3 to 8 percent at least. If you buy existing try to buy from a for sale by owner. No need to pay a realtor without having to and DON'T let any realtor tell you the buyer isn't paying the costs of the sale. I have walked away from a ton of realtors who tried to argue that point. It is a real joke if you think about it. Just make an offer taking the realtor's commission off the price and see where you end up. I could go a lot further but I'd charge for more information. Yeah I've bought and sold, built a few, and done several other type deals... Be Good
 
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