First let me tell you why we decided to build. We live in a small town in the Pacific Northwest. Our town is located on a small strip of land sandwiched between the ocean and a mountain range. The difference between north and south here is a matter of a few short miles. To the east and west, we are virtually isolated by state and private timber land. There is one smaller town within 30 minutes, after that there is nothing for over an hour. As idyllic as it sounds, it makes purchasing a starter home here a nightmare. The housing market crash did not really reach our isolated town. Home prices stayed relatively high, although interest rates were low. After two years of home shopping and watching home prices rise rapidly in our area, we saw that the only homes left in our price range were manufactured homes, a route our real estate agent strongly advised us against. So, we thought about building.
I spent hours trying to research building a home, but found almost no information. You can't find any information on cost or pricing because it all "depends". Contractors won't give you a cost until you have a set of plans and you've chosen your finishes. But how do you know what size of a house you can afford to make up plans for? Let me help you get started.
We shopped several local contractors and home builders in the area. We quickly learned this was more of the luxury home route. These homes are designed, built, and dictated exactly to your specifications; and you pay for every penny of that. You first need to find a set of plans (which you have to buy) or hire an architect/engineer to design for you. Then you hire a contractor who will then help you pick out finishes. We didn't chose this route because there was no easy way to determine price for us. Because everything "depends", we couldn't tell if we could afford to have an architect design a 1,000 sqft home or a 3,000 sqft home. These contractors were very reluctant to give any sort of idea as to pricing, but when we asked what the cheapest home we could possibly build would cost, they gave a price range of about $85-$200 per sqft.
Another option of course is to build your own home. We did not chose this option for several reasons. First, it is very difficult to get financing. Banks want to know that the home they might inherit if you foreclose is built correctly! Most will only lend if you use an "approved" licensed/bonded contractor for the entirety of the job. The other reason we didn't want to build was time. We had one child and another on the way, and my husband didn't want to spend the next five years building. Every weekend, every holiday, every vacation, every night after work would be spend building. We wanted to build our home, get in it and be done, move on to other things. Finally, we were advised by many people who had built their own homes that one of their big struggles was finishing. Meaning, once you get building, you can't wait to get in. If there's no bank holding you back, you will most likely move in before the house is even finished. Then once you're in, you lose your motivation and start moving on to other projects. This is where you find homes with unfinished trim work, exposed wiring in the ceiling, rooms that were sheet rocked and taped but never textured or painted. For many families, this was a stress in their family and in their marriages. We decided this wasn't for us.
Seemingly new to the market are home builders who advertise what I describe as "Costco houses". They offer a select set of plans to chose from at a SET PRICE which you can fully customize (at a cost, of course). They claim to be able to build these houses inexpensively because they build the same houses over and over, and therefore can buy the materials in bulk at discount prices. These builders also have the homeowners do a large portion of the work, either themselves or they can hire out. Usually the Homeowner To Do's (HTDs) include excavation, getting roads,electric and water in, painting and landscaping. Most of these homes range in price between $40-$60 per sqft. We chose this option because it was easy to determine what size house we could afford and what finished we could afford to put in it. We could have a relatively set price on a set plan BEFORE we put any money down or signed any contracts. It seemed perfect for a young starting family.
Of course there are also housing developments, where developers sell you the land and the house which you are then able to customize. These houses do have relatively set prices (unless you chose upgrades), but you will have to live in a neighborhood of similar looking houses on the land that the development is in. You obviously can't chose your own location or build on land you already own. Since we already owned our property, this option wasn't for us either.
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