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Started By
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re: Building a house - looking for some advice
Posted on 12/18/14 at 8:15 am to guttata
Posted on 12/18/14 at 8:15 am to guttata
quote:
Do you already have a lot, or is the house going to be put on one of the builder's lots?
One of the builder's lots
Still haven't picked out a lot yet...in the very early stages here
Builder builds in 4 different neighborhoods in town. I'll need to select an available lot and a plan that I want built and then move forward.
2
Posted on 12/18/14 at 8:44 am to Powerman
I'm going off of the little info you've provided, but here's my thoughts. These deals have a few pros and a lot of cons...
pros:
- usually get a decent price b/c the builder already knows exactly what it will cost and he should have eliminated construction waste
- also cheaper b/c the builder will keep you from over spending on the finishes.
- faster process than a true custom home b/c you aren't waiting on plans, bids, etc
cons:
- That's not really much of a 'custom' home. It's sounds like a tract home or at best a pre-sold spec (or custom spec).
- little room to negotiate anything, b/c the builder probably has many things already picked out for you.
- resale value can be lower if this is more like tract building. you may have a the same house built 5 doors down from you
- builder has all of the control and leverage which bring me to the next point...
- in my experience, builders in this situation will almost always cut every corner they think they can get away with. I'm not saying it will have structural issues, but you'll get cheaper finishes than you would normally choose for yourself.
Builders offer these deals b/c they can make very good money on them. Most buyers going this route have never built a house before and don't realize all of the 'builder grade' materials going into the house.
I've seen homeowners actually take a custom set of plans with a decent amount of detail and get bids that have a $80k variance from one another ($400-480k). This difference isn't really in the profit, but in the finishes. I built my house for about $110 sq ft. I could have built it for $90/ft or I could have spent $150/ft by only changing the details (type of windows/doors, flooring, plumbing & electrical fixtures, appliances, trim, ... the list goes on.
pros:
- usually get a decent price b/c the builder already knows exactly what it will cost and he should have eliminated construction waste
- also cheaper b/c the builder will keep you from over spending on the finishes.
- faster process than a true custom home b/c you aren't waiting on plans, bids, etc
cons:
- That's not really much of a 'custom' home. It's sounds like a tract home or at best a pre-sold spec (or custom spec).
- little room to negotiate anything, b/c the builder probably has many things already picked out for you.
- resale value can be lower if this is more like tract building. you may have a the same house built 5 doors down from you
- builder has all of the control and leverage which bring me to the next point...
- in my experience, builders in this situation will almost always cut every corner they think they can get away with. I'm not saying it will have structural issues, but you'll get cheaper finishes than you would normally choose for yourself.
Builders offer these deals b/c they can make very good money on them. Most buyers going this route have never built a house before and don't realize all of the 'builder grade' materials going into the house.
I've seen homeowners actually take a custom set of plans with a decent amount of detail and get bids that have a $80k variance from one another ($400-480k). This difference isn't really in the profit, but in the finishes. I built my house for about $110 sq ft. I could have built it for $90/ft or I could have spent $150/ft by only changing the details (type of windows/doors, flooring, plumbing & electrical fixtures, appliances, trim, ... the list goes on.
This post was edited on 12/18/14 at 8:55 am
Posted on 12/18/14 at 9:08 am to Powerman
You in Texas?
A friend of mine built a "custom" home in Richmond. When I think of custom, I think it means you get your plans drawn up by an architect, buy a lot, hire a GC, get a construction loan, and go to town.
Custom out there means basically a tract home in which you just get pre-approved for a loan and put down some deposit money plus option money. You just buy the house from the builder at closing. I guess what made it custom was that she had a lot more options to choose from than typical tract housing.
Not saying this is bad at all - this is an amazing 550K house. But, for the first six months I kept going over there and finding mistakes the builder made and telling her to call the builder to fix. For how much she spent on the house, I was surprised at some of the mistakes made.
A friend of mine built a "custom" home in Richmond. When I think of custom, I think it means you get your plans drawn up by an architect, buy a lot, hire a GC, get a construction loan, and go to town.
Custom out there means basically a tract home in which you just get pre-approved for a loan and put down some deposit money plus option money. You just buy the house from the builder at closing. I guess what made it custom was that she had a lot more options to choose from than typical tract housing.
Not saying this is bad at all - this is an amazing 550K house. But, for the first six months I kept going over there and finding mistakes the builder made and telling her to call the builder to fix. For how much she spent on the house, I was surprised at some of the mistakes made.
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