4 Reasons Why We’re Building Our Home From Scratch
If you have a specific vision for your dream house, building a home gives you exactly what you want – but it comes at a price.
My wife and I have bought two homes so far. Both have been typical resale transactions in which we buy a “used” home. However, we’re about to buy our third home, and this time we are buying brand-spanking new. Here’s why:
Get What You Want (Almost)
We picked the lot, the floor plan, and all of the particular finishes in the house from the flooring to the paint color. However, it is not going to be 100 percent custom built.
Our home is part of a new development, so we are limited to a list of floor plans and other customizations that fit within the neighborhood guidelines.
Luckily, this new neighborhood fits our housing desires almost exactly. But having it built your way comes with a price tag.
Weigh The Pros and Cons
We looked online to see what was for sale in our area and investigated every listing that met at least part of our criteria. None of them matched our picture of a dream home.
Besides, after doing extensive renovations on our last two homes, we didn’t want to be burdened with a long to-do list for our next house.
The resale homes we looked at were a bit cheaper than new construction, but the price difference wasn’t much once we factored in the renovation expenses we would do in the resale homes.
For instance, one home we considered was listed for $40,000 less than our newly-built home and we probably would have negotiated another $10,000 off the purchase price had we made an offer.
But we would have had to remodel the kitchen completely to get what we wanted, which – based on Zillow estimates – would have cost about $28,000. We also would have changed some of the floors for about $10,000, and painted many of the rooms at the cost of about $2,000. Not to mention the stress and time it would take from our lives.
WE WOULD HAVE SAVED PERHAPS $10,000, BUT WE WANTED OUR HOME TO BE NEAR-PERFECT.
Of course, the decision to buy a resale home or build a brand new one will be specific to your local real estate market.
Negotiate Where You Can
We were able to negotiate a bit, but builders normally have their prices pretty firmly set in advance, especially in new neighborhoods. Some builders may offer money toward upgraded finishes or a premium lot, but don’t expect builders to negotiate much on the sale price of the home.
In the end, we were able to negotiate an additional $5,000 of upgrade incentive money beyond what we were initially told they offered. We got the builder to pay for our owner’s title insurance – a cost of about $1,600 that we didn’t have to pay.
According to our real estate agent, building homes is their business, so they know exactly what they need to sell each home for before you even walk in the door.
Another common question is,”Can you drop the real estate agent and save on commission by dealing with the builder directly?”
Based on everything I’ve read, it depends on the builder. With ours, I learned that they would not negotiate a lower price with or without an agent. And I’m glad I did end up using my agent because she was able to alert us to many factors we wouldn’t have considered otherwise.
Get a Warranty
The builder will warranty their work for periods ranging from one to 10 years. The one-year warranty is the most comprehensive, but the 10-year warranty will cover us on some of the more expensive structural items.
Building a home instead of buying resale made more sense for us. The amount of money we would have spent changing an existing home, headache included, was just not worth it for us.