Building vs Buying?

I hear that while the home prices have come down, the cost of building materials has not, so you can get more house for the money if you buy.

Building a new home can take 4 months minimum.

There are a lot of good things about building your own home. You get to make all of the decisions. You get to choose the materials, floor plan, colors that you like.

There are some downsides: You have to wait on contractors. you have to wait on permits. you have to wait on overloaded inspectors to get to you. if you are in a neighborhood and one of the first, there will be constant contstruction noise for at least a year as other houses are built.

When you buy, the process can be as little as 5 weeks. You can see what the neighbors look like. You can still choose your own colors in repaints. The taxes are already defined. You can research and get a good idea of what the electric, water bills will be.

M.

You get more house for your money if you buy an existing house rather than build a new one. But if you build, you can get exactly what you want (usually). Just be sure you budget for all of the extras. The base price of many new construction homes doesn't include a lot of the "extras" that you would consider normal in a house... like eggshell paint, different colors of paint in different rooms, nice counter tops, landscaping, nice light fixtures that aren't tacky brass ones, etc.

Unless you want something that is absolutely only available as a custom house, you're better off buying an existing one.

We've done both. We built the house we are in and had a great experience. We found a newer neighborhood that we liked and checked out several floor plans. We picked a floor plan and a lot in our subdivision. The builder built it. We were able to pick out cabinets, colors, floors, etc. We made a few modifications based on the floor plans we saw.

Our next house will be a built one. Why? Because as of right now, comparing to a friend of mine that did build their house, we are paying about the same amount in the monthly mortgage payment...except her's is newer, ours is not newly built. So based on that, our next house will be built so that it can be what we want, in an area we want and pretty much pay the same amount. Builders require a down payment. In my area, some require a $5000 down, others just $2000 down. Then you start saving money for the house tax or that can be built into an escrow account. We have found a house blue-print online that you can purchase and show it to the builder to see if it's possible to build a house this way or builder's have their own floor plans and if you want to tweak it, they can work with you. You pay for the lot, plus the cost of the house. You kind of want to time having your current house on the market and having it sold so that by the time the new house is complete, you can move in and not pay two mortgages. May sometimes consider moving in an apt temporarily for a few months, course depends how fast your house sells, but doing that will save you a few bucks. If our house sells fast, that's our back-up plan to our house will be built. It will be crampy and I'm not crazy about that possibility, but it is what it is. We plan to start the planning in a couple of years. I suggest attending home shows at event centers in your area for starts. Definitely will give you lots of ideas. If you want to be in your own area so that you don't pay that dreaded home owner association fees, check with a realator for people just selling part of their land. We personally don't want to be part of any home owner association (telling me where I can/can't plant a dang tree or what signs or decorations is allowed would be rather annoying). Good luck, this sounds like fun! I can't wait till we start doing this :)

My husband and I recently sold our home. I really wanted to build, but he was leaning more towards buying an existing home especially right now since it is such a buyer's market with the down economy. We did find a model home that was now for sale that we absolutely loved, but after looking at some other existing homes on the market we realized we would get so much more for our money. The model home didn't have a finished basement or a fenced yard and we were unsure what was going to be built across the street from us. A new high school had just been built and quite possibly it was going to be soccer fields and such which would mean much traffic and cars parked along the street adjacent to our yard where our small children would play. Long story short, we bought a home that was 5 years old, met most of what was on our list of "must haves", nicely landscaped, blinds already in place, etc. in a great neighborhood and got it for a great price too. Like Janet said below, just do your homework, know exactly what you want going in and then go for it! One other thing, building a home usually requires two moves as many builders will not start on a new build job until your current home is sold. Good luck!
A.

You live in Minneapolis and you can't find a small house with a basement to buy? Our definitions of small and not extravagant must be different :)

If we could sell our house, we could find a dozen homes in Minneapolis to buy. There are foreclosed homes, nice ones and fixer-uppers, all over Minneapolis and the surrounding suburbs. Plus, when you're buying a home for $85,000 - $125,000 you're payments will be pretty low.
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We built our house. If you do decide to build, don't start until you've had a chance to really study the plans.

We changed our master bath around and our laundry room and added 2 ft to the back of the house. We still ended up removing half of the hallway wall between the kitchen and family room, and we still wonder why we didn't remove the wall before the build :) Unfortunately, I can walk through our house and come up with other things that we should have changed before we built.

Good luck!

We just built our first custom home. I wish we had waited till we had agreed on a floorplan we both liked and researched our options more.

You need to have a budget predetermined and you need to make sure the builder's allowances are realistic. Our allowances were $40,000 less than our choices. The next time we build, we are going to list the exact things we want(appliances, windows, lights) and get a price before signing the contract. This builder would not do it so we should have moved on. Most of our neighbors have only $400 of bushes and trees on homes that start at $300,000. They are tapped out.

The most important thing about the builder is does he use the same, professional, skilled subcontractors or does he bid it out to the lowest bidder. Believe me, the workers take shortcuts and skimp on supplies. Plus they are reluctant to come back to fix something when they won't get paid by the cheap builder.

Both have advantages. We have built 2 homes. It was he$$ both times arguing to get things right.

Many builders, even custom, will do anything possible to cut costs where you can't see it. I left my corporate job when we built house #1 just to watch what was going on. We still had issues with the builder getting things right.

House #2 went better but still, we'd catch them with a lower quality or grade product vs the one promised. You have to watch them like a hawk and go back and re-check what they do.

That said, we are very picky and we believe in doing what is right. We are happy in home #2 for 11 yrs now but we have practically re-built it by upgrading and replacing things we find unacceptable.

Just be aware of everything and read the contracts closely. It is up to you to read the contracts. Also, hire an independant home inspector before you close to make sure you are not shortchanged somewhere.

I believe there are advantages and disadvantages to both. With an existing home, what you see is what you get. If you want to make changes, it takes money to renovate/customize it to your liking, and it takes time to make those changes.

My husband and I built the home we are living in. We did it "owner/builder" style which means that we hired all the people (sub contracted) do what what we needed: contractor to build the frame of the house who was also responsible for the roof and drywall installation. We hired the plumber, electrician, and cabinet people, the AC installation. We hired somebody to lay the ceramic tiles but we grouted it ourselves, we insulated the house ourselves, we hung the cabinets ourselves, and painted everything ~ yes a lot of work, especially when we were both working full time...and going to school at night. Would we do anything differently? You bet! It was a learning experience, one that I would most certainly do again...but yes, there were things that did not go as planned. From the time we got the okay from the county to begin construction, it took 4 months to get our home complete. Inspections are a hassle, yes, this is true but they are necessary when you choose to build your own house. IF I found a house with an awesome floor plan, one that met all of my needs and wishes, I would have no problem with buying but when you put your own blood, sweat, and tears (yes, you will put that much of yourself into building a house IF you opt to do a lot of work yourself), building your own house can be a wonderful experience.

Now, on the flip side, if you do opt to build your own home, you must, and I emphasize this strongly, you MUST research your builder very, very well and hire an attorney to make certain that a legal binding contract is written by someone who knows the laws AND finance through a bank, not yourselves. My mom and dad hired someone to build their home. It took this man and his "company" nearly 3 years to complete it. This man robbed my parents of thousands of dollars. They hired an attorney to help them during building process but by then the contractor filed for bankruptcy and sadly, my parents and several others were out of luck. It was a devastating experience for my parents. I share this not to scare you, but so you know that there are wonderful experiences of building your own home (like for me and my husband) and there are worst case scenarios (like that of my parents). They spent more money scrambling around looking for someone to complete what the first loser did not complete and there are so many things wrong with my parents home ; it's very sad.