Considering to build instead of buying.

[CRMH Eagle]

So I'm at a juncture where I'm considering buying a home and nabbing the $8k tax credit, or continuing to rent cheaply and save money in order to build a home in about 2 years. I'm fully aware there are a lot more headaches involved with building, and a lot more homework. But I sense the reward could be more than worth it. Anyone here been through the process and can offer wisdom or help narrow down the plethora of web sites? Thanks.

 

[jekirby]

I was my own GC and did a lot of the work myself. Between the two I ended up with about 40% equity when done.

 

[bang-n-gearz]

I obtained a new construction loan and basically played the "builder" in getting it constructed. I did have someone on paper as it was mandatory in getting the loan.

Market value of homes is pretty cheap as you know. Cost of material is another story. What you could build for say $99.00 per sq ft. you can probably buy on the market alot cheaper.

Something to consider-

Buck

Dls.TX

 

[El Toro]

We've owned 9 different homes as primary residences over the years, and we built one of these (the 6th one). I spent half an hour every morning, and another half an hour every evening, checking the subcontractors work, and then arguing with the general contractor about short cuts and cheats. After a while they started doing mine right, and they shorted the one being built across the street even worse. An example is the stud lumber .... mine was pretty much dry and knot free. The load dropped off across the street added 10 squirrels to the neighborhood.

I would not build a house unless I had a really good contract, a really good contractor, and enough time to check the job site at least a couple of times a week.

 

[Bustanut joker]

One thing I will tell ya.. Don't move in until it's completed otherwise, You'll never get it done

:jester:

 

[Geezer]

I built my own house. It is a 3000 square foot log cabin. I contracted an excavator and someone to pour the foundation. My wife and I did all the rest, with lots of volunteer help from friends and relatives. It was a great experience and I'm glad we did it. The advantage of doing it yourself is that you can do it exactly how you want things. I used premium materials where I thought they were worth the extra cost. And we were able to change the location of walls and appliances and light switches and things like that if we didn't like the way they came out.

If you hire contractors to build your home then you will not have the same flexibility to make changes as you go. Contractors bid on a job as it is shown in the prints, and they charge a premium for anything you change later. So, you have to know exactly what you want at design time. A good architect is a necessity for this process. And you have to be able to envision what you want, down to the most minute detail, from the architects drawings.

If you buy an existing structure you can see what you are getting. The down side is that it may be difficult to find exactly what you want in the place you want for the price you are willing to pay.

 

[CAJW]

Think long and hard about building your own home. There are many horror stories out there with our new home completed (sort of) in March 2008 being one of them. There isn't enough life left in my keyboard keys to finish a story of the troubles we've been through, but I'm not here to discourage you, just to point out a few of the things that screwed us over. We hired a licensed/bonded contractor who was recommended by a co-worker. We had checked him out with the state contractor's board (no violations or complaints) interviewed past customers, previewed completed homes he had built and talked with some subs that had worked for him before. This guy still did shoddy work, most importantly the concrete work was a MESS and we spent a bundle out of pocket fixing his screw ups. He did not abide by the contract that specified all workers that set foot on our property were to be licensed/bonded with workmans comp and I was to see their documentation prior to work commencing. He got around that by saying "they work for me" and if you research your state's contractor laws you'll find (at least in CA) that if the contractor has certifications (IIRC) in two or more discliplines, then he/she can perform all labor necessary to build a home. This is a simple explaination of a complicated way that my contractor got around the licensing requirement for his workers. The result was shoddy work that the county inspector should have not (in some cases) approved. Another big deal was we specified Dupont CORIAN counter tops and showers in our home. Too late in the process (after the install and about a hour before I fired the bastard) we discovered that the CORIAN had been substituted with a knock off product called Avonite. This allowed the schumck to pocket an easy $25K to help him recoup some of the other things he'd screwed up. It was out and out fraud to which we reported him to the state board, went through arbitration and won, but still didn't get a dime of the award (about 1/4th of what he owes us) and the only saving grace is the SOB is out of business as his license was pulled. We had to dip into retirement savings to finish the extensive driveway (13% grade) and dirt work as the SOB had spent the funds elsewhere. We held the last draw to assure all suppliers and subs got paid, but he had ran out of cash prior to the last draw. We co-signed the draws and the bank had an inspector visit after each draw request to assure work was completed, but he didn't tell me he was short funds for blowing our draw money on a car for his daughter, paying off his own mortgage etc... Just writing this brings up some very deep seated emotions and it sometimes just makes me sick. We have a home that we are very happy with (now) as it's in a beautiful setting, is quiet and finally finished. It was WAY over budget with all the repairs (and grief), but we are happy with it now. Bottom line is you can't do enough due diligence, research or know too much about the entire processs. Would I do it again? Only if I was the GC as I really thought I had the bases covered, had a lot of detail in writing in the contract and we still got screwed. This post is not a slam on contractors (unless the shoe fits) nor is it an invitation for legal beagles or know it alls to tell me what I did wrong or how I should have handled a particular situation. It is in response to the request for someone who has built a home and this is how ours went. Best of luck if you go this route, but know what you're getting yourself into and at the minimum add 20% to the cost.

 

[Auburn]

We built our house also. We spent a year and a half lookng for the land. Then another year getting the design ironed out, and the quotes needed for the construction loan. We worked with a local bank that specializes in owner-builder projects. Our construction loan was set up so that when we were finished it converted automatically into the permanent mortgage without incurring additional loan fees.

You will have to show all the detail to substaniatewhat you are going to build as they will appraise the loan based on the details of your package. The bank used a voucher system that you paid the vendors and subs with. That way the bank made sure they signed off lien releases to get their payments, so when you are done, you do not have any vendors or subs trying to get more money or make claims against you. For the vendors that didn't want to use the voucher, we used a visa and took a draws to pay it off each month. Just had to show the bank what materials charge was for. You will have to be absolutely anal about your record keeping as it will be your best friend to keep things straight.

I won't lie, it was hard work. But, as said above, it was very rewarding and we traded our labor for top of the line materials. How much you can do will depend on your skills. The only subs I hired were the septic system installer, the plumber, the flat concrete work and a taper for the drywall.

Some of the things we did, were run all the heavy equipment for clearing the land, the foundation (165 LF of 8" wide x 10' high), raised a timber frame, installed stress skin panels, tongue and groove pine on the ceilings, electrical, fire sprinkler system, radiant floor heating system, tiling, granite countertops (cut from slabs to size), site build all cabinets, hardwood floors, exterior siding, hang the sheet rock, installed all the appliances...you get the idea, just about everything.

It is one of the most rewarding things I have ever done. We started raising the frame Memorial Day 2004 and moved in May 1st, 2005. We did live on site in a 5th wheel because our other home sold very fast. I worked 4 tens so I had 3 days over the weekend to to work on it, plus evenings the rest of the week. I had family and friends help raise the frame, and my brother help with the foundation.

I'll get some pictures of the various stages when I can. I still have some small amounts of trim work to finish.

The biggest pain in the ass was dealing with the county to get all the permits issued. You would think for the $28,000 we spent on permits, you could get some kind of service instead of being jerked around all the way through it.

I would build another house again, just not in this county.

 

[Maura]

Yeah ,yeah lots of hassles, lots of headaches, can buy cheaper in the current market yada yada yada but building your own home can be one of the most personally rewarding experiences you will ever have.

 

[fljab]

I've only owned 2 homes, and am in the 2nd one now. We "built" this one which really means we got the construction loan and subbed it out through a GC. The GC was a friend of ours and well respected for his work in the area so we mainly used his subs. We did so some of the work like the painting and other things, but most were was done for us.

The big advantage for us at least was that as you may guess, I'm kind of a motorhead and wanted a big garage. At first we were looking for a decent house in the right area that I could maybe build a bigger backyard garage but just couldn't find anything we wanted/liked for a price I thought was reasonable.

We eventually bought 2 acres and then started pouring over plans books available at Lowe's, bookstores, and searching online. We finally found a house plan we liked and then took that to a "house plan drawer" - actually a non-licensed guy that worked for an architect (we had to pay an additional fee to get the architect to sign it). I fudged some of the dimensions and enlarged the garage from a 2 car to 1500 sq.ft. with a bathroom, plus a couple of other things our GC friend suggested.

We made a couple of mistakes, well not mistakes really, but things I would have done different if I was to do it again, but overall we got the house we wanted for a good price. Plus I was lucky as in dumb luck in that we did this just before the prices went crazy. I had ~140k into the house and lot and a year after I finished you couldn't find the lot for that. We thought about selling, but like it here and we would have still had to buy another one at the inflated prices so wouldn't have been ahead any.

My advice is do it; it was kind of intimidating to start it and going through the process, but for us being "not in the business" having a good GC that we could trust made it worth the while and the extra fee we paid him. The advantage of building is having what you want and it's all new!

 

[user 6393]

My ex and I built our 1st home, and did the majority of the construction and finishing ourselves. We saved a TON of money doing it, and it was very satifying in the end. We were young, had no kids and could spend all our free time on the project without much impact to the rest of our lives. A short time blip lost.

Would I do it with young kids? NEVER. Would I do it now that my kids are late teens? Probably not....

I could not give it the time necessary in order to reap the cost benefits, so....no net gain for me.

Do I plan eventually to have one more custom built home before I die? Yep.....

I want what "I" want, just once in my life, just to say I had it...*L*. NO compromise, just comfort. I wouldn't be as able to be as hands on this time around, but with a good trustworthy contractor I would have zero hesitation.

 

[FJRGuy]

It is important to make a distinction between "building your own home" and having someone build you a home. The latter is what most people that say they are "building their own home" are really doing. If this is your plan then I suggest you proceed with caution and don't expect to save money. It will take a lot of time and effort but can certainly be very satisfying when you have a finished home designed and built exactly as you want.

Actually "building your own home" requires a certain amount of aptitude, takes a LOT more hands on effort, but can be incredibly rewarding and create a boat load of equity. You control the quality and all the details. I'd recommend this to anyone who has the time and ability.

 

[bikerskier]

There are so many incredibly beautiful homes in financial distress all over the country that I think you would have to have a loose screw to basically pay 'retail' to have a home built. Unless you have the time and intense focus and no homicidal urges towards inspectors and do most of the work such as Auburn did then I strongly suggest a pass. Too easy to buy someone else's dream for deep discounts and there are probably a lot that look close enough to your dream.

 

[Bustanut joker]

Do I plan eventually to have one more custom built home before I die? Yep.....
I want what "I" want, just once in my life, just to say I had it...*L*. NO compromise, just comfort. I wouldn't be as able to be as hands on this time around, but with a good trustworthy contractor I would have zero hesitation.

What? "zero hesitation" to be hands on the contractor? How's he going to get and building done?

:jester:

 

[08FJR4ME]

So I'm at a juncture where I'm considering buying a home and nabbing the $8k tax credit, or continuing to rent cheaply and save money in order to build a home in about 2 years. I'm fully aware there are a lot more headaches involved with building, and a lot more homework. But I sense the reward could be more than worth it. Anyone here been through the process and can offer wisdom or help narrow down the plethora of web sites? Thanks.

If these credits work like in the past you will be paying taxes the following year on what the government gives you. Not sure but you may want to check that out first.

After waiting 10 months and getting pushed back during the housing boom I couldn't wait any longer. So I general contracted my house 8 years ago. I got financing & estimates from at least 3 sources for all phases of construction. Make sure you budget at least 20% more than what your original cost are up front. After spending lots of doe getting plans off the internet the building inspector rejected them. Not that they weren't right, he was just a prick and flat out told me they would stay at the bottom of his pile. I had to have them all redrawn by a local draftsman. Just one of many story's i could tell you. It's not for the faint of heart and will push you to your limits. In the end I have a custom house that you could drive a 10 wheeler over and the floors wouldn't sag.

Good luck,

Dave

 

[Solo]

As Dave said, "It is not for the faint of heart." I designed and built a passive solar house back in the late '70s. All I contracted out was the cement work (built on a slab), the electrical, and the plumbing. The rest was done with help from family members--and then 7 or 8 months when I worked at the site by myself on the interior. I built the cabinets and everything. When I finished up, I was exhausted by the project.

But I'm proud to know that my ex-wife still enjoys the fruits of my labor...

 

[L2M]

Lots of good input here already, but to add a couple points:

1. The fact that you're looking at your first home means that, no disrespect, you don't really know what you want. My wife and I bought our first home two years ago and thought we got what we wanted (large 2 car garage, 3 bedrooms, hardwood downstairs, granite counters, etc.) because it was such a contrast to our two bedroom apartment. Only after living in the house for two years do I know that we really should have gotten a place with more land, a 3 or 4 car garage, larger living room, and larger kitchen. Sure, I like the place, and there are times that I find construction shortcuts that irk me, but I'm already planning on my second home so I live with it. That leads to:

2. When you know what you really want then there's no substitute for building it yourself. I've worked on home construction projects for friends and family who knew what they wanted and the additional quality control of actually doing the work yourself is unparalleled, assuming of course that you know how to do that work.

 

[FJRGuy]

...But I'm proud to know that my ex-wife still enjoys the fruits of my labor...

:rofl: Been There! Done That! The X is in possession of the latest home I built too.

On the bright side, I get to do it all again! And by all, I mean almost everything. I design my own homes, prepare the drawings, do my own concrete forming; framing; roofing; siding; electrical; plumbing; heating; whole home audio and automation; insulating, drywall and finishing. I love doing that stuff! :yahoo:

 

[FastJoyRide]

We just (re)built our dream home and moved in this past May. I was on site every day for the nine months it took as the unskilled labour component and to make the myriad on-site decisions required constantly as construction proceeds.

The plusses: the GC is my best friend and someone I trust implicitly; we had a good architect who was able to translate our dreams into buildable drawings - with the input of the GC; we got exactly what we wanted and where we spent money for betterment we feel like we got great value; we hit a soft spot in the local home-building cycle with the result that most of my bud's trusted subs sent us their "A Teams" which was a great bonus in terms of craftsmanship and schedule. I have to feel that knowing the homeowner was on-site every day and was a personal friend of the GC also cut way down on any trades trying to cut corners on our home.

The negatives: as stated by many others above, were it not for our unique lot we could have bought an existing home for less than current "sticks and bricks" construction costs; the local municipality were an absolute PITA to deal with, were very expensive for permits, and cost us effectively 18 months of delays on many issues (prior to construction start); our neighbours got way too invested in "advising" us as construction proceeded, etc., etc.

I would do it again in a heartbeat with the same team - but not in this municipality! But with my personal lack of construction skills I would never tackle a project like this with a GC out of the Yellow Pages. If you don't know your builder I would heartily recommend that you watch a few episodes of Holmes on Homes! If you are thinking of working with a local homebuilder that you don't know I would recommend that you invest a long and liquid lunch in prying info out of the local chief building inspector. Believe me they know who they have to watch like a hawk because corners are constantly being cut - and who they don't...

I've spent my whole career in the construction bonding business (all institutional, commercial and industrial plus heavy) - about the only residential work that's bonded in Canada is multi-family projects where the lenders insist on a bonded GC.

Bottom line: as Barb says, if you know that you want exactly (and only) what you want, there is no other way to ensure that except to DIY!