At what $ point is building much smarter than buying?

[JeremyH.]

Hey guys,

So despite my floor that needs some work... my place might be worth a fairly significant amount more than it cost when it was bought.

I've been looking at different homes in and within around an hour from where I'm at. What frustrates me is how much $ seems to be needed to have a quality home. There's some older homes made of brick that are nice, hardwood floors, but they're... not in neighborhoods that I'd be looking at. I'm more tempted towards a place on a golf coarse or such to feel more secure. I guess one other complication is the desire to not have a large home, the 1600ft with 3 car garage is actually plenty big right now, so all these 4-9 bedroom places are just wasted space.

BUT it's occurred to me, what can I have built for the same $? I'll give you an example, I've seen $900k homes that looks nice but I can't figure out where all the $ goes, when something that looks as well built is $550k in an area not too different, with a little less of a view.

I probably won't be considering much, if any, of my own hand being involved (I know, I know...). But I have to wonder if I score a lot at a reasonable price and can go at it... will I be looking at using quality materials. Here's an example of a place that I have to wonder about its price point being, well, attainable to build for half that or maybe even a bit less (probably minus some wet bars and other needless stuff). Maybe I'm wildly naive, since I haven't done anything but wood work...  but I imagine some of you are experienced in all the sorts to know about such and can tell me just how much of what I'd be getting into before I start making someone think I'm purchasing/building anything.

 

[Billy Bunter]

BUT it's occurred to me, what can I have built for the same $? I'll give you an example, I've seen $900k homes that looks nice but I can't figure out where all the $ goes, when something that looks as well built is $550k in an area not too different, with a little less of a view.

In Europe, i'm sure in the US too, estate agents say that the 3 most important factors are 'location, location, location', so probably the $ doesn't all go into the actual build.

 

[JeremyH.]

I suppose that's true, but peace of mind goes a long ways too. There are numerous cheesy "safe" places I would never consider.

But I'm someone who likes quality, so building is attractive to make something really good, instead of having to pay for $600k worth of "location" to get a quality home. (not that I think it's even possible to get a loan approval, or want to, for a place that cost a million)

The CDA area btw is desired so almost anything you can buy there is going to appreciate very easily. They can't keep anything on the market. BUT there's other areas I'm looking at too.

 

[Paul G]

Safe never goes out of style, especially when it comes to kids. It's a matter of what a buyer is willing/able to pay for it.

As for building your own, if you can't find what you want already built then what else is there to do?

 

[live4ever]

One of the most important aspects of location is quality public schools. 

And everyone has a different definition of quality when it comes to houses, but chances are it would cost more than you might think for higher quality high end custom finishes.  If you have high standards and plan to be involved in the design and build, understand that your penchant for quality will carry through from the framing hardware to the insulation to the windows to the roof to the HVAC to the appliances to the finish carpentry.  It adds up really quick when you demand quality at every stage.

 

[JeremyH.]

As for building your own, if you can't find what you want already built then what else is there to do?

Check with you guys if it makes sense. I've never seen the breakdown of costs for a home that's well built vs contracted out to every bone head that needs to be fired.  [blink]

 

[Paul G]

As for building your own, if you can't find what you want already built then what else is there to do?

Check with you guys if it makes sense. I've never seen the breakdown of costs for a home that's well built vs contracted out to every bone head that needs to be fired.  [blink]

Perhaps a good place to start is with finding a good architect in your area

 

[chupatngy]

Being somewhat local to the home you pointed out I can honestly say that the house you linked to is not a good representative for most of the homes in the area. Unless you are dead set on living in the BR development then you can find or build a much nicer home for a lot less money.
One of the few nice things about the housing bust in that area is that it helped to weed out a lot of the less than desirable home builders/ contractors. Most of the quality home builders that managed to stay afloat during the bust are reputable.

 

[JeremyH.]

What home builders do you recommend as being the best in the area? We live in the same city now.

Post Falls is "upcoming" but I guess their infrastructure is nearly buckling. Hayden has areas that are nice I've been told where Aspen I think is building.

 

[Jak147]

Hi jeremy
I'm in the uk so this may or may not be of any help to you.....
We are a high end one off house builder and as a general rule, excluding architect fees and the plot, Building a well built no thrills house runs at around £1000 /m2 of living space. To move to the level In the listing you posted would be closer to £2200 /m2. It's incredible how a granite work top here, pull out ironing board there, can add up but trust me they really do.
The most important thing that you can do if you do go down the self build route (after finding the perfect plot) is spend a long time with the plans and be decisive. Then spend some more time with the plans. The projects that spiral out of control nearly always do so due to last minute changes on the job. It allows contractors to add 'extras' not agreed in the original contract. These extra will never be priced at the same rate they used to win the contract in first place

Hope this helps and good luck
Regards

 

[Dane]

I moved from being a remodel contractor into building a spec home based on a lot of the same thinking that you laid out.  My experience has been that if you aren't planning on doing any of the building yourself, it is actually quite difficult to build custom for less than you are paying for a complete house by an established builder.  If you are going to act as the GC, you can potentially save 20%, but that comes with a lot of caveats.  One of the trickiest aspects of doing that is finding the high quality sub contractors that will work with you at a reasonable price.  As home building picks up around the country, the sub-contractors have a list of full time builders that keep them very busy and they are unlikely to get off the builder's cycle to do a one off job for a homeowner GC- or if they do, they charge considerably more.  Now, if you are going to be doing some of the work yourself, the costs can certainly come down- but then, you have to factor your time into the equation and whatever lost wages you are incurring for that time...

 

[JeremyH.]

Sweat equity, hard to beat except if you are needing somewhere to live! Builders that also are GC, and do a bunch of the work make out pretty darn well but they aren't building to live in.

Thanks for the advice. It does seem that just finding the right builder might work best. People are selling homes they had built for a good $30-50k on top it seems like, in some of these developments. Steep price to pay for not being able to wait 8 month in current home or rental.

 

[Stephen B]

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I can not speak here of any Northern American or UK and European Experience.

However, as a Owner Builder, with Ms Untidy we have designed and constructed our rural house. Fortuantly in our area there are plenty of excellent trades who were willing to assist between their engagements with major building companies. Thus we were able to employ a carpenter with whom I worked untill lock up. I then assisted a plasterer and plumber. The electrician I let do his thing solo. This was as much due to regs as anything else. The decks, final fix, kitchen installation I did myself. Ms Untidy did the painting and tiling. A professional painter did the ceiling.

For the most part we paid at an hourly rate. Where we did get quotes such as the roof, we got three. A lesson here as the roof quotes ranged from $A 30,000 to 65,000.

With materials we established a relationship and accounts with a plumbing supply company and a timber yard. Sure you could shop around, but when a company knows they have the potential to be the only supplier a good discount should follow.

We believe we saved a bundle.

My only warning, is that an owner built house is seldom finished quickly. As others have said, your schedule will have to accomodate your sub contractors. Although our house has a Certificate of Occupancy there are a pleather of small tasks to complete, and this includes minor maintenance. After all it is six years since the foundations were poured. Another delay has been that we have been renovating our city house as well.

My final  advice would be to set up a warm but professional relationship with your building inspector. Set out your schedule with them and ensure that you are aware of their expectations within and beyond the codes. We had a great relationship with ours and found his advice  helpful rather than a problem.

Festool, Makita  and Metabo tools have made this for the most part an enjoyable process.

Oh and don't be sucked in from watching television shows. Also what is your relationship with your partner like. One of you will have to manage the project. Can you accept that the manager might be your partner? This process will stress you both. So far we have survived..

 

[southrider]

17 years ago we decided to sub out our own home. Our budget was tight. We decided to focus our money on things that couldn't easily be changed later.

We spent extra on foundation, windows, roof, and high seer heat pump. We went cheap on electrical fixtures, plumbing fixtures, formica countertops, fiberglass tub/showers, etc. (10 years later we slowly upgraded those items).

Building instead of buying will get you the house that you want, and everything will be new and work like it is supposed to. Energy bills will be substantially lower for the entire time you own it. It will be worth more if you ever decide to sell. Brand new homes are cheaper to insure. New home discounts are as great as 40% the 1st year and slowly go away over a period of 5-10 yr. depending on the insurer. This is because new homes have less problems with leaks from plumbing stacks, flashing, bathtubs, etc.

Buying existing homes will get you more sq. ft for the same money. It will also get you into neighborhoods with mature landscaping and longer term homeowners where there may not be vacant land. Older homes often have more character.

Buying new homes is the highest price option. Price per sq. foot is the highest. Kind of like buying a hot new vehicle the first month it comes out. You can get it exactly the way you want it, and pick all the finishes, all for very little effort except for paying full retail. It's a choice based on your budget, and work and family situation.

We had the time, energy, and willingness to do it. You may not.

As an insurance agent I had friends who were appraisers and builders who recommended subs to me. You can get this info from your local lumber yard. Talk to the guys who do lumber take-offs for plans. Talk to the roofing supply company, the window supplier, drywall supplier, etc. The counter guys know exactly who is responsible and who is not.

By subbing out your own home you can earn a substantial savings. Notice I said EARN. Builders earn their money. We were there every morning before work, every afternoon after work, and many work days. Include most weekends too. We cleaned up every evening after each sub would leave (amazing that they don't!), and made sure materials were there for the next day.

I ended up doing all the trim work myself, my wife painted every inch of the interior, and we put down the flooring together (except kicking the carpet!). It took 7 months to complete and move in, and would have been 5 if we had hired subs for the trim, paint, and flooring!

Sometimes you can hire a builder who will sub-contract for you as a paid consultant. He will hire and manage the subs for a fee or percentage, while you pay the bills. This is a half way step between subbing out and buying new turn key, and in many areas becoming more popular. Semi retired builders often do this part time instead of having to front the money for your build. It works for both parties.

Feel free to ask any more questions. Best of luck!

 

[Holmz]

[member=42863]SouthRider[/member] nailed it.
There is basically a psychological value of having something more along the lines of what you want.
But that may go counter to the $-cost.
I do not know how to weigh them up.