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You could always go with a modular. Floorplans can be adjusted to suit your needs. The overall size can be adjusted as well. With some manufactures you can also specify the manufacturer of mechanicals, windows, appliances and amount of insulation. With some you can design a unique build and it'll be delivered on as many trucks as it takes. All that remains is the groundwork for the foundation and landscaping. That way you can get exactly what you want for less money than an stick build or existing house and whatever rehab it needs. (and most will need some work). As always do your research.
Suggestion for real estate attorney seconded. Best wishes.
Just joining in the discussion, FWIW, and to clear up a few things from MY experience --
1. Before having our new custom home built, I have bought (with my husband) five previous homes, never needed an attorney, but got burned on one brand new home that was already built (not custom) to which we added a fireplace and a garage. That was our first experience with a MAJOR remodel, and we definitely should have used an attorney, as neither the fireplace nor the garage was built correctly. We also bought three older homes and one new home in a new subdivision. None of the older homes gave us more trouble than what we would expect to have with older homes, and all closed without a problem.
2. Our current new custom home was built out of state with weekly progress reports and photos being sent from the contractor, plus my husband made two multi-day visits to the site after the first walk-through (to lay out the stakes, discuss which trees would need to be removed, etc.). Even though we did not make daily (or even monthly!) trips to the site until the last two weeks before closing, in which we stayed at a motel to make almost daily visits to the site, the ONLY thing wrong was the placement of the dining area ceiling lamp! That was corrected without any fuss at all, and you cannot even tell that it was placed wrong originally. Also, our bank sent inspectors to inspect and approve each step as it was completed, so we had that assurance, also.
3. We were confident about our builder because we obtained references and actually met with some people who had used them before and were using them AGAIN. They raved about their experience, plus many of the reviews specifically mentioned the fact that they (the homeowners) were also out-of-staters, and that even though they could NOT make frequent trips, that they had encountered NO problems. (Btw, we live in an area in which second homes are common. In fact, only about 100 residences in our town are year-round residences!)
4. We financed the construction through our long-term Colorado bank that also had locations in Wisconsin. This particular bank has a list of building firms they will use and will not approve any firm not on their list. In order to get on their list, the firm must go through some kind of process that covers many different things. In fact, one of the firms we eliminated was because they were NOT approved by the bank and the owner told us that this bank was "a pain to deal with", and he would not build our home if that bank was financing our home! (Not exactly something to inspire confidence as far as that builder was concerned, right? This firm, btw, was the one that submitted the low bid.)
5. Our lot is part of a 16-lot subdivision, so it was not like we were buying acreage in the middle of nowhere in which who knows what problems we would encounter. (Ours was the 15th home built and one lot remains empty.)
So, in short, I would NEVER say "Don't hire an attorney" or "All builders are trustworthy", but I am just saying that in OUR experience in building a custom home, we did not need an attorney and our builder was very trustworthy. But, to emphasize, we are middle income people who were looking to build a modest (but nice) home and not anything that would be a candidate for House Beautiful or Architectural Digest! The only luxury touches were quartz countertops, soaking tubs in two bathrooms (and a walk-in tiled shower in my husband's bathroom), and an expensive wine cooler.
P.S. Oh, and just a few clarifications from my previous post. I neglected to say that the $471k included an attached two-car garage (not part of the 1,875 s.f., of course); and there was an "allowance" (the amounts we estimated) for each "discretionary" category, such as appliances, lighting fixtures, plumbing fixtures (sinks, faucets, etc.), that was put into the contract which we signed in October 2019. When we met with their in-house interior designer in March 2020 which involved three days of shopping (to the appliance store, the lighting store, etc. and going over the Kohler catalog, to name just three), she would keep us apprised as far as "where we were" on our budget. As it turns out, we did go significantly over budget in several areas and my husband added some more electrical changes, but that was not a problem because all we did was pay the difference through change orders, as they occurred. Just before closing, the builder did an "in-house" audit of all changes and we actually go a refund check of about $2,500 when we closed! (So, as I said, we used a very reputable firm.)
Oh, and one other thing (sorry). Btw, my husband is an electrical designer whose job is very detailed, and we had been working on our house design for years, so we knew EXACTLY what we wanted. So once we signed the contract, there was no change to our design whatsoever, except that the designer shortened one of the bathrooms by three feet in order to add a linen closet, which was a GREAT idea. That was the ONLY change he made to our design, which was a very simple one, btw: two bedrooms (one actually a combination guest room/office), three full baths, a sunroom, and an open concept great room with kitchen, dining area, and living area.
Last edited by katharsis; 08-26-2021 at 04:07 PM..
Having built custom homes and spec homes with builders, here is my advice:
1.) Have a clear idea of what you want. Work out the details with the builder or architect (if you're using one.)
2.) READ THE CONTRACT. KNOW THE CONTRACT.
3.) Inspect the site daily.
4.) Ask questions if you don't understand.
5.) Document deficiencies and report them in a timely manner.
6.) When it's time for a draw, make darned sure everything is completed. Period, no exceptions or no money. Money will be the biggest motivator for your builder.
7.) Document, document, document.
8.) Refer to #3.
9.) Don't make changes after the fact unless it's absolutely necessary. They will cost you substantially.
10.) If you do want to make changes to the design or layout, make them up front. It's far cheaper and easier to add that additional three feet to the pool deck in the design process that doing it after the fact. And - you'll pay for less for it.
11.) As with #10, realize that a minor change such as described might add $5,000 or $10,000 to the cost. That's pennies on the dollar when it comes to your mortgage, and far cheaper than trying to do it after the fact. Yes, you're spending more, but it's something you'll amortize over time and not have to pay out in a lump sum.
If you've never built a house before, you MUST prepare yourself for a roller coaster ride that will last months. It's stressful as heck, and will occupy a great deal of your time if you do it right. That being said, building a house means you get things the way you want them, and not some cookie-cutter spec home setup that you may end up being unhappy with.
If you're not willing to devote a great deal of time to the process and be actively involved, don't do it. Period.
RM
Lots of good input.
However, regarding #6, most builders in the $500,000 range should be happy to fund construction themselves if they own the land.
With capital as cheap as it is, why would a stable, successful builder want to worry about negotiating draws and slowing progress?
And, if the OP would use a Big National Builder, it is almost a sure thing they will self-fund and there will be no draws.
You could always go with a modular. Floorplans can be adjusted to suit your needs. The overall size can be adjusted as well. With some manufactures you can also specify the manufacturer of mechanicals, windows, appliances and amount of insulation. With some you can design a unique build and it'll be delivered on as many trucks as it takes. All that remains is the groundwork for the foundation and landscaping. That way you can get exactly what you want for less money than an stick build or existing house and whatever rehab it needs. (and most will need some work). As always do your research.
Suggestion for real estate attorney seconded. Best wishes.
I had about 20 years in the industry, and mods are not a panacea. They operate at the same whims of the supply chain and shortages as conventional builders.
And:
Quote:
Originally Posted by MikeJaquish
Ask about a firm date for delivery of any factory-built house.
Good factories are totally overwhelmed with orders. Can you wait 8 months or a year? Some are that far out.
Ask about surcharges for building materials.
Lots of good input.
However, regarding #6, most builders in the $500,000 range should be happy to fund construction themselves if they own the land.
With capital as cheap as it is, why would a stable, successful builder want to worry about negotiating draws and slowing progress?
And, if the OP would use a Big National Builder, it is almost a sure thing they will self-fund and there will be no draws.
True, however, I was speaking of a custom home builder, who may very well do draws against a construction loan. Certainly national builders will self fund, and will often provide financing through their associated lending arm.
In one case where we used a custom builder, we did draws as they did not self fund because we owned the land as you described.
You can expect a proprietary contract from the builder, so you might like an attorney to review it and note any red flags or vagaries.
You may be able to negotiate some details, but builders who have been around and successful track record know what they want in the contracts in terms of time, payments, and risks.
If you end up with a Big National Builder, you can expect 50+ pages, much of which are banal disclaimers about wind and rain and natural flaws in wood and stone finishes, but after that the devil gets buried in the details. You may want some legal advice on that. You will also find that your choices with Big National Builders include the following options:
1. Sign it as it is and get the house.
2. Decide to negotiate and not sign it as it is presented, and don't get the house.
True, however, I was speaking of a custom home builder, who may very well do draws against a construction loan. Certainly national builders will self fund, and will often provide financing through their associated lending arm.
In one case where we used a custom builder, we did draws as they did not self fund because we owned the land as you described.
RM
I just doubt the OP will get a custom home as desired @<$200/SF including land.
I think we're talking about a land/home package from a regional builder/developer.
I just doubt the OP will get a custom home as desired @<$200/SF including land.
I think we're talking about a land/home package from a regional builder/developer.
Agreed.
RM
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Best wishes.
