Buying vs Building... some questions

[Ed Pawlowski]

Building a custom house is great if you can do it at an affordable cost. You already realize the time frame is going to be longer than the end of May so your expectations may be realistic.

Assess your wants and needs. Are you willing to show restraint to fit the house to your budget? Often, once the house is underway, people want to upgrade to fancier tile, better appliances, wider driveway, second floor on the garage, and find they are way over their heads in debt. Do you have the time to be at the job site frequently? That is a must to assure you are getting what you want and that plans and drawings are properly interpreted. Be aware that you pay for changes along the way too. When you say, 'yes, the sink should really be on that wall, " it can cost you hundreds of dollars to move it.

I'd like to build the house of my dreams, but I can't afford it the way I want it. The house would not be huge, but it would have top quality materials and cost double what a comparable average house would cost. So, I'm happy where I am and I've done upgrades along the way. .

If you buy an existing house it is what it is and can be modified. If you contract for a house to be built, it will probably cost a bit more than the original contract because of changes along the way. If you build it yourself, it can be a crap shoot.

I know of one couple that built their first house themselves, moved in to it and six months later started on their second house to avoid the errors of the first one. They sold the first at a nice profit though, a winning situation.

One of my friends built his own house 15 years ago. It still does not have doors on a couple of closets. Initially ran short of money then never found the time to complete.

Every custom house ever built has some stories to it. Listen to some so you can avoid the really dumb ones and take advantage of the good tips.

[Tony Hwang]

Hi, It is so right there is no perfect house. I have custom built 6 houses plus a cabin in the woods. Every time it got closer to perfect but never 100%. At least in this house We have PLENTY of closet space and lots of light throughout during the day like green house. When we ordered window coverings, they couldn't believe how many windows we have, LOL! I am in early 70 so ran out of time to try again. My lot(7 house Cul de Sac) has a view of mountains, river/wilderness park in the front and golf course next to it. Schools(K-9) are at walking distance.

[Tony Hwang]

Hmmm, Instead take the allowance and go do your own shopping. Don't limit yourself to builder designated supplier. Usually need quite a bit of upgrade to do for your need.

[Robert Neville]

My rule on options and allowances is to never pay the builder for an upgrade to something that is easily changed after closed. Lighting fixtures, plumbing fixtures, flooring can all be redone afterwards, usually for far less than the builder wants.

And it's not always the builders fault - On my last new house, I wanted a specific plumbing fixture. The sub added $200 over his cost to the builder. Both I and the builder were not impressed and the sub lost the upgrade.

[hallerb]

I had to comment.

first you have what you describe as a nice ranch home on 1.5 acres, in a convenient location.

now when your young living in a multi story home doesnt matter, but as you age or get ill / hurt for any reason steps can become a real PIA. you or your wife probably want a multi story home. one kids and adults can fall down steps in, harder to get on roof for minor stuff. ranch homes have LOTS of advantages:)

plus you fixed up your home. its all nice and pretty today.

now first consider the tax break.. always nice when uncle sam gives you something. however the realtor fee to sell your current home will be around 7 grand per 100,000 sale price. so if your existing home sells for a 100 grand your alreeady out 500 bucks. plus whoever buys your home may beat you up for problems you didnt even know your home had.

I would hire a home inspector to check yours out before its on the market. that way you can fix whatever the inspector finds wrong however you want. once you have a buyer they can demand registered costly contractors for even minor stuff. assume you will spend at least a few grand fixing a even perfect home..... dont believe me?? get your existing hme inspected and you will understand better.

now it appears you may have to move twice, thats costly and lots of work.

say 3 grand for two moves? now your out the rent for how many months your short term rental is, and such places often charge high rents to cover wear and tear of frequent movers. everyone wants fresh paint and nice carpet, tenants must pay for that:( so 3 grand? just a guess?

now your happily moving in your brand new home. guess what? you will find things you want or need to change or upgrade. that bathroom fan works fine but is kinda noisey wakes the baby 250 bucks later its taken care off.

new homes can be money pits, 5 grand guess perhaps more of feature creap as its built.......

theres likely more but if you took all the money your about to spend on moving you could likely do some really nice addition to your existing home with a lot less hassle.

add a big family room, a detached 3 car garage, heck you could add a partial secnd floor or bedroom addition.

just had to point out you do have that option, and its espically good if you like your existing neighbors.

new plan may bring you a neighbor you just cant stand and worse many newer homes are on s,maller lots to help keep homes affordable.

now go buy your spiffy new home and help our economy buying all the new stuff you will want for your new home.

[cshenk]

Ya think? (grin). In fact, we notice it.

Here's a little one that can bite, and hit home with several at my workplace. Goverment Contractors. These tend often to be retired military seeking work at age 40-55 with specialized skill sets. The current set thinks it's cheaper to pay someone like me what I make now but also assume all the extra expenses of my retirement plan, medical needs, etc. Sure they pay my company a little more than I make, but they dont have to pay the Social security, workmans comp, or retirement plan or a host of other things. I'm *cheaper* this way for them.

It's pretty hard to start over in a second career at age 40+ yet military 'retirement' income normally *mandates* this because it's only 50% of base pay at year 20. Unless you get to be more than E6, 20 is your max (about

1/2 fit that as there arent quotas for more). If you are lucky and never have been divoreced and had 1/2 your retirement delivered to your ex plus have to pay max SBP out of your portion left, you might see 1400$ a month which may be state taxable and is federal taxable. Try it when chances are you are still with HS aged kids.

I'm like many. I have disabilities, partly from age, partly from military service connection. I am largely 'unemployable' except in a workplace willing to accomodate and able to accept such. I *cant* be a cashier, walmart worker, McDonalds, waitress, bartender, or anything like that so those 'willing to do anything to make it work for a bit' are closed to me. I can't stand more than 15 mins (if able to walk around, can manage 45) or sit more than 45. I can't lift more than 20 lbs. Not whining mind you, but you just do not get bites for non-military related jobs the second you have to disclose you have a 50% disability VA rating.

So, who are we hurting? Reduce 'contractor support' and we both reduce jobs for retired military and raise the cost overall the government pays to get the same job done while also att he same time, reducing the market our disabled vets use for second careers. Unless the diasabled vet hits 50% or more, they do not get more income from that E6 pay above. It comes out of their 'retirement' and just becomes tax free. That's a whopping 40$ a month for my husband, retired vet with less than 50% disability which prevents: Driving, night work, loud environments, high stress, lifting more than 30 lbs, standing more than 1 hour, walking more than 1 mile, visual accuity better than what normal would see at 20 ft and he sees at 10ft (with max correction applied).

Sorry, dribbled on here. It's just frustrating.

[Ed Pawlowski]

plus you fixed up your home. its all nice and pretty today.

*******************************************************

Two story homes have the advantage of smaller roof, cheaper to heat, cheaper to build with less foundation, take up lass space on a small building lot. You also have a bit more privacy in the bedrooms from the living space.

We bought our present two story house when we were in our mid-30's. Today, approaching our mid-60's, I'd much rather a single story. My wife is limited to how many times a day she can take the steps and coming down in the morning with arthritis in my knees is no fun. It is not practical right now to move, but I'm considering it, just to have a one story house.

[hallerb]

you can get a elevator or chair lift, the elevator is nice if you happen to have 2 closts one on each floor directly over one another.

on the netork news recently they said the average new home buyer spends 20 grand in ther first 2 years of new home occupancy, on furnishings decorating etc. couch doesnt fit, dining room set wrong for room.

the government tax break is really like a store offering a big discount on your first purchase with a new credit card. both store and CC company make long term profits.

government hopes housing stimulus gets the economy moving again.

but neither are free lunches:(

[hallerb]

how large are the lots on your perspective new homes? around here lots have shrunk a lot to try and keep costs down. frankly its nice to have plenty of room between you and your neighbors.........

[gpsman]

You're asking. Buy.

You probably won't be glad you did, but you'll be wondering if the education was worth it if you don't. -----

- gpsman

[hallerb]

people having homes built report all sorts of hassles,..

I guess its nice to live in a never been slept in before home.

years ago i stumbled onto a brand new hotel on opening nite, no one had slept in it before

[hallerb]

I hope the OP if they decide on a new home update this thread with home inspection, sale, moving reports, how the new construction goes, and reports once there in their new home.

Hopefully it will all go great!!!

[Alex]

Hi,

That's me :) We've decided on building and we're looking at an 1800 square foot floor plan with a layout we love. The builder has canned floorplans, but we can make changes if need be since they don't do the 'assembly line' buildings like DR Horton --- but we're only making minor tweaks. Here is a short list of what we've tackled thus far:

- Preapproved for financing, and though they can't lock in the current market rate they did say at closing they'll be using whatever the current rate is. Closing in 4 months (give or take a few weeks) hopefully it'll still be around 5%.

- We did a garage sale this last weekend, which did surprisingly well given it didn't get above 35F all day. Plus some of the bigger ticket items are on EBay and doing well.

- There was an available 10x20 slot in a storage space up the road so we've got that and are moving boxes and furniture over to it daily... plus taking stuff to Salvation Army that we won't be using.

- We've lined up an excellent Realtor who's put us in contact with handyman to get what we need fixed/updated on the house completed, and with luck that'll be done by next week with the house going on the market afterwards.

- This same Realtor will be representing us with the contractor building the home so we're sure we have everything on track there, and she's looking over the contract now which should be ready to turn in this week.

As for the builder, we've continued to do research and I've talked to three people who've had homes built by them... all of which were totally happy. Plus our Realtor has worked with the builder and financier before and has good words to say about them.

So at this point things are going along smoothly. Next week we're picking out the colors of the house with a design consultant, and after that the only thing left is to get our house sold. The Realtor did say on average houses in our area take 4-5 months to sell, which is longer then we'd like, but she said that's on average and thinks ours will take closer to 2 months with the aggressive price we've set. So we'll see.

So all and all I'm happy where we're standing now, though at any point something could knock the wind from our sails. I'm keeping my fingers crossed though that things pan out because even though if this house falls through due to not getting our house sold, we can still build on another lot -- just would suck having a house we've already designed up the street since even if we do build on another lot we'll go with the same floorplan and options.

If anyone's interested I'll post some more updates as the process goes, or if someone wants more details email me and I don't mind sharing more.

Take care --

Sam Alex

[Alex]

Hi Everyone...

Here's a follow-up to the post I made about 6 weeks ago. Lots has happened! We did tie-up some projects around the house and had it on the market the last week of December. The first week of January was busy, we had a number of people check out the house, and last week we got a contract --- after two weeks! The home inspection was last Saturday, which didn't turn up anything major, and the septic inspection was yesterday, which we haven't heard back on yet. The buyer's Realtor should have a contract amendment to us this evening with what they want us to fix, but I don't anticipate any deal breakers. The home inspector was very vocal about how well the house was built and maintained, and we've done LOTS of updates over the last

2-3 years.

As for the new house, they're pouring the foundation this week, and we've already lined-up an apartment for February 1st. The closing isn't until the end of February, so we'll have a few weeks to finish moving things to storage or to the apartment.

Right now the only things we're worried about are the buyers asking for unrealistic repairs or their financing falling through. If that happens we'll be screwed since we'll be locked into an apartment lease as of February and we can't afford both the house note and apartment rent/utilities. But they seem to have all their ducks in a row, so we're keeping our fingers crossed.

It's like a game of dominoes... right now we're going great, but it only takes one wrong piece to throw-off the entire thing. But at this point everything's going as well as could be expected.

Sam Alex

[benick]

Hi Everyone...

Here's a follow-up to the post I made about 6 weeks ago. Lots has happened! We did tie-up some projects around the house and had it on the market the last week of December. The first week of January was busy, we had a number of people check out the house, and last week we got a contract --- after two weeks! The home inspection was last Saturday, which didn't turn up anything major, and the septic inspection was yesterday, which we haven't heard back on yet. The buyer's Realtor should have a contract amendment to us this evening with what they want us to fix, but I don't anticipate any deal breakers. The home inspector was very vocal about how well the house was built and maintained, and we've done LOTS of updates over the last

2-3 years.

As for the new house, they're pouring the foundation this week, and we've already lined-up an apartment for February 1st. The closing isn't until the end of February, so we'll have a few weeks to finish moving things to storage or to the apartment.

Right now the only things we're worried about are the buyers asking for unrealistic repairs or their financing falling through. If that happens we'll be screwed since we'll be locked into an apartment lease as of February and we can't afford both the house note and apartment rent/utilities. But they seem to have all their ducks in a row, so we're keeping our fingers crossed.

It's like a game of dominoes... right now we're going great, but it only takes one wrong piece to throw-off the entire thing. But at this point everything's going as well as could be expected.

Sam Alex

A game of Dominoes , huh ??? More like a house of cards.....You're either alot braver than I am or more stupid...Can't really decide which though....Good Luck...You're gonna need it...LOL...

[Alex]

Hi Benick,

Either way it's going good thus far *knock on wood*. We moved to an apartment about a mile from where the new house is being built, and it's coming along great. We're expected to close on it early April. As for our old house, we close on it this Thursday, and thus far everything's on track there. The buyers did a walk through yesterday and we're good on all counts.

But honestly we went into this knowing there were lots of places it could fall apart. The biggest hurtle is/was selling our current house, and unless something happens in the next two days that part will be done Thursday afternoon. Yes our plan was rather ambitious, but we went into it knowing if something didn't work out we'd be fine. I think that's where the line between 'brave' and 'stupid' fell. It would've been stupid if we couldn't afford to loose, which for us if any part fell through we were fine in the old house. Even if the new house falls through for some odd reason we can always find someplace else. Our plan was ambitious, but we did all our homework and prepared for every contingency.

I'll post another update after Thursday in-case anyone is watching this thread.

Take care,

Sam Alex