Looking to build your own home, but scared that it might actually bankrupt you? You’re not alone. If you’re thinking about having a one-off custom home built for you, here are some reasons why it’s not as expensive as you think.
You Probably Have To Remodel A Used Home Anyway
When you buy a home on the secondary market, one of the most common things buyers do is remodel. It’s natural. You almost expect to have to dump thousands of dollars into the home to upgrade it.
The average costs for remodeling can set you back about as much as the cost to build new, too. For example, a home office remodel can cost upwards of $30,000. A major kitchen remodel may cost you $50,000 or more. A master suite addition costs over $100,000 in most areas of the country. Even a minor remodeling job in the kitchen or bathroom may cost you up to $20,000.
With just those remodels, you’re talking about $200,000 in job costs. And, much of your home would still be old.
Tear down the sheetrock, add insulation, redo the roof, redo plumbing, update the electrical, knock out a few walls for that “open concept” look, and your project could balloon to well over $400,000.
For that price, you might as well build a home.
You Don’t Have To Build A Big Home
When you think about building a new home, be honest. You think about these large mansion-type things, don’t you?
Most people do. But new home builders also build smaller homes – homes that are more reasonably sized for “regular people.” That’s how you buy a home that’s new, but that also only costs $150,000.
Rather than dump a bunch of money into renovations, you dump the money into new construction materials that will last for the next 30 years without needing to be replaced.
You Can Build In A Cheaper Neighborhood
Most new homes are built in nice neighborhoods, but not all of them. There’s nothing that says you can’t buy a plot of land out in the country and have a builder build something for you out there. Rather than be tied to one location, or thinking that you can only build in an established community, think outside the box. Ask your developer to build on a plot of land you buy. Then, you can live wherever you want.
Everything Is New
When you build a home, everything is new. You’re not spending money repairing stuff from the previous owners – that includes fixing their hack jobs and DIY projects.
Sometimes, moving into a home on the secondary market means that you have to fix things that you didn’t originally count on. For example, you might not have noticed that the roof wasn’t properly ventilated until summer hits and you get a bunch of mold building up in your house.
You might not realize that the insulation is nearly non-existent because the previous owner used blown in insulation 10 years ago and just ran the AC on high during the walkthrough.
When everything is new, you also get a warranty on a bunch of stuff that you don’t get when you buy an existing home.
You Can Usually Negotiate With the Builder
Take advantage of direct-to-consumer pricing when you work directly with a builder. He gets a discount, and so should you. Builders do make a profit, but it’s usually on the labor, not on materials. So, ask your builder if you can use his discounts in building your new home.
If he’s charging you a reasonable labor fee, then he’s not going to mind you doing this. In fact, if he does mind this, it almost certainly means that he’s profiting from a markup on the materials, which is easier to hide than labor charges.
Ask about everything from sheetrock to appliances to windows and doors. Every one of these things are sold to builders at or near manufacturer’s cost.
Your HVAC Can Save You Money
One of the biggest costs (besides the interest on the mortgage) of a home is the climate control system. This is where most people wind up spending way too much money because the windows and doors are inefficient on an older home, the HVAC is old or retrofitted, nothing is insulated, and everything else in the house is old and needs to be updated.
This all adds up to massive inefficiencies with an older home that don’t exist in a newer one.
Bill Beazley has been building new homes in the Augusta, Georgia, area since 1976. Bill Beazley is past-president of both the Builders Association of Metro Augusta and the Home Builders Association of Georgia. He has spent his entire career developing neighborhoods, plans and quality products that will be appreciated by the most discriminating buyer. Founded in 1986, his locally owned-and-operated real estate firm was built to serve all of the Augusta, Georgia metro area with a conveniently-located sales office in Columbia County. They specialize in all aspects of Real Estate marketing including Resale, New Homes, Lots/Acreage and Commercial/Investment properties. Over the past three decades, their commitment to professionalism, personalized customer service, and results have made them the CSRAs preferred real estate company.
Categories: Real Estate