Is she making a mistake trying to buyout this home vs. building? (Brentwood: house)

[luvz_Pink09]

a friend of mien fell in love with a 4,980sq.ft home(w/ pool) on a 10k sq.ft. lot over a year ago and before her company could move to LA the home was sold. The home was sold fore 2.5mil, but she is trying to make the current family that lives there a offer they can't refuse and last time I checked she was offering them 2.9mill but she can afford to spend 3.4mil on a home. Before she saw the homes shes trying buy from the owners she wanted build a home from the ground up, in the west LA area,as stubborn as she is, if the owners accept her first offer she will go up to $3.4mil, can she buy a residential empty lot that is atleast 10K sq.ft. and build a mediterranean home that is about the same size as the one she wants or maybe larger for 2.9mil in the West LA or nearby?

[jaypee]

The short answer is: probably.
But what does it matter since she already found the house she wants?

[Social Democrat]

If your friend is in that price range then she may want to take a look at the current inventory before committing to anything.

[smokingGun]

No.... you can't buy a decent level lot and build a 5000 sq ft home from the ground up in the prime areas of the Westside. The lot alone will run you $1.5m to $1.9m and construction costs on a "luxury" style residence of that size will easily exceed another $1.5m. In fact there are number of mini-estates in Brentwood & Palisades where construction came to a grinding halt when the market tanked because the developers either just ran out of money or realized they couldn't recoup their costs at this time.