Pros and Cons of buying a lot and building a house

[r_p]

Originally Posted by OutdoorLover

What are you saying? Are you saying people should build houses without a builder? How does that work? I have heard of a few people being their own general contractor, but that is supposed to be the most difficult/riskiest path, and certainly wouldn't be for the OP.

Adding a project manager to an existing project being run by a builder/general contractor won't cost anywhere near that price. They really don't need to do that much. Even the builder themselves shouldn't cost anywhere near that, unless it's one *really* expensive house. The builder I spoke with who will likely build my place when the time comes will do it on a "cost plus" basis for 7% of his costs.

And you're saying that custom building a house is cheaper than buying one in a development?

The owner becomes the builder which I think is the route OP is planning to take. This approach is actually the least risky as you directly pay subcontractors for the work that's done. Don't like something, hire another crew and move on.

Typical builder overhead in the area is ~15-20% which given OPs budget of 1.25 million is ~200-250K.

FYI, the actual cost of building an SFH home in the US before COVID was 80% of the sale price, the rest being overhead and profit. See the NAHB report for details.

[OutdoorLover]

Originally Posted by r_p

The owner becomes the builder which I think is the route OP is planning to take. This approach is actually the least risky as you directly pay subcontractors for the work that's done. Don't like something, hire another crew and move on.

Typical builder overhead in the area is ~15-20% which given OPs budget of 1.25 million is ~200-250K.

FYI, the actual cost of building an SFH home in the US before COVID was 80% of the sale price, the rest being overhead and profit. See the NAHB report for details.

The OP knows very little about home construction, that's why he is asking for advice. Loans for owner/builder construction projects normally have higher interest rates, because they're considered more risky projects.

[Beachcomber4]

Originally Posted by Basic2020

Hello,

I am interested in buying a plot and building a house from scratch. I am worried about the pros and cons of hiring general contractors as I have heard from the media that they are often corrupt and take advantage of an ill-informed client such as myself.

I am currently looking in the Middlesex County (price range not exceeding 1.25 million for a single-family house). Any aspect of building and designing a house that I should be concerned about would be greatly appreciated.

Thank you

I'd be concerned you don't have any experience and are going into it blind and frankly with an attitude that makes you suspect of those who work in the industry because of what you "heard from the media".

Save yourself the time, aggravation and money and either buy an existing home or hire a GC. At that price you are building a custom home, not a basic Cape or Colonial. You are not equipped for this job and no one is going to want to give you their expertise for free. Nor should they. In addition, you will not be a priority for busy contractors who work as subs for the bigger GCs. Staying on time and budget is the why you hire a GC.
I saw this in play out in our neighborhood. THere is one custom builder who builds most of the homes and an architect that does the design. Those jobs are seamless because all know that there is more work in it for them. The one guy who decided to do it on his own, it was years for completion. How much did he save in the long run?

[expo25]

No one will take you seriously, as previously stated buy something already built or hire a professional

[MikePRU]

Originally Posted by OutdoorLover

The OP knows very little about home construction, that's why he is asking for advice. Loans for owner/builder construction projects normally have higher interest rates, because they're considered more risky projects.

OP is far better off buying a spec build that's in process or early in the process. If they've never built before they need someone to guide them.