Building a House

[Rodnik]

Grey,

Are you talking about a bonded GC causing you so much of a problem? Just curious---as I would find that most unusual.

[Kheprera]

Check how your builder builds homes. SD and I bought ours where some of the walls were "pre-built" elsewhere and dumped on-site, then raised. Not really a site-built home. Plus, at least here, most of the workers don't even know how to use a nail gun, and my son has better aim. I can show you pictures if you want.

 

This is our starter home and in about ten years we're probably looking to move to something else. Until then, we'll survive.

 

Other things to look for:

 

This is really gross: Before they put the toilets in, even though port-a-pottys are provided, the workers were using the pipes as their toilet. They'd remove the cover, do their business, then continue on. I had my construction-worker uncle doing inspections for me regularly, and he spotted this. I didn't even *think* they'd do something so nasty.

 

Do as others have suggested and know the building codes, or at least be familiar with them.

 

Check how they build the attics. If you want to use yours for storage, Texas (or at least the Austin area) building codes only require the roof trusses to be able to hold the weight of the roof. This means you can't put boxes of Christmas decorations and old clothes trunks in the attics for storage and leave the garage for its intended purpose. Also, ask how they build the walls. The walls for our house are built only so they can sustain the wait of the original design. If we want to add to our second floor or extend over the garage, we can't because the garage would collapse.

 

Taking pictures will help. Lots of pictures. Know the places you asked for outlets, phone jacks, and cable jacks and, if they aren't correct, make them fix them. We discovered that while the jacks were there originally, they sheet-rocked over one of them. Using the pictures we had taken, they were able to go immediately to the correct spot and didn't have to guess.

 

If you're choosing from a certain list of available materials, write down the code number on a small piece of paper with a short description (like: Cabinets: 1025D25, walnut, or whatever). Taking pictures and writing it on the pictures might help as well. This way if they install the wrong thing you can pull out the picture, compare the part numbers and shove it in their faces.

 

Don't accept excuses. "It's too wet," as an excuse for not grading the back yard is NOT acceptable. Seven months later, ours STILL isn't graded, and now we have to get rid of all the weeds before they can do anything. Scott's lawncare is coming out tomorrow to treat for weeds. If they say they can't finish even one part of the job before you close, then tell them you aren't closing until it's done.

 

Finally, check out every single available mortgage option that is open to you. If you have never owned property before, you can get some massive incentives. SD and I were able to get a fixed 5.625% mortgage with 0 down through a city (maybe state) government grant program. The only thing is we have to live in the house for nine years or pay penalties.

 

And finally, something I do: Even if you just add an additional $25 a month to the principle you can cut your interest payments significantly. Even with our mortgage on $150,000, we're going to be paying over twice that due to interest. By paying the little extra every month, we should cut that down. If you can manage to spread an entire monthly payment out over the year (for us it would be about an additional $104.00 a month) you can end up paying off your 30 year loan in 10. Just double-check your contract about penalties for paying off the loan too soon.

 

Clark Howard's website has a LOT of good information on everything from credit card advice to buying a car to buying/building a house finances. I pay a lot of attention to his advice, and listening to him really helped me know at least a few things to look for. My biggest error was NOT knowing the building codes. Lucky for me I have an uncle who does.

 

 

Note: If I had to do it over again, I'd try to buy an older home outside of a homeowners association area. Often you can find a really great home that way. I remember seeing one home in an old neighborhood where the previous owner happened to be a master carpenter. He custom-built bookshelves and the cabinetry, had gorgeous hardwood floors installed, and kept that house gorgeous, simply because he enjoyed it as a hobby. Unfortunately I wasn't looking to buy at the time (I had a friend who was doing electrical work on the house who needed to be picked up once because his truck was in the shop) and there was already a contract pending on the place. Also older homes tend to be slightly better built, better settled, and pre-landscaped (saves a ton of money). I'd love to have the attic space for storage and a real, porcelain tub. Unfortunately, for now, we've settled on the nasty fiberglass ones that are hard to clean. Then again, I'm old fashioned.

[fieldarchy]

I've actually seen some of the homes in progress at the site. They build on site. The house I saw was a raised frame that they were starting to flesh out a bit.

 

I just go pre-approved for a loan of $125k!

[eastman]

I just go pre-approved for a loan of $125k!

 

out here, you might just barely be able to buy a 2 car garage for that.

[PurityThruFire]

I just go pre-approved for a loan of $125k!

 

out here, you might just barely be able to buy a 2 car garage for that.

 

 

Try areas of CT, two-bedroom house, one bath (less than 1700 square feet).

$400,000 +

Not joking.

When I can, I'm getting the hell out of this state.

[Lastman]

I'd buy the worst place in the best neighborhood if I were you. It doesn't make sense to build during a buyer's market.

Over-building and foreclosures have created an abundance of property, and people who can get loans post-subprime meltdown (at the first-home/entry-level price point) are in relatively short-supply.

 

Gradually fixing-up the worst place in the best neighborhood will give you valuable experience with contractors.

[Qwyksilver]

I just go pre-approved for a loan of $125k!

 

out here, you might just barely be able to buy a 2 car garage for that.

 

 

Try areas of CT, two-bedroom house, one bath (less than 1700 square feet).

$400,000 +

Not joking.

When I can, I'm getting the hell out of this state.

 

Just as bad around here. Being able to buy a house with $125K would be a miracle in Mass. Heck, around here, that's coming close to what might be considered a respectable down payment

 

I would love to leave the Northeast, but family and careers are firmly cemented here. Even the talk of moving to Ohio has faded.

[M. Eversberg II]

Field, are you sure you want to build a house already? It's one hell of an investment -- you just moved into that palce, are you sure you like the area? Are you sure you like your job? What about if you get married?

 

And a host of other things.

 

With the housing market as it is, it may be better just to buy one -- if you build you may sell it at a loss, which is bad for you, and offensive to my beloved Capitalism.

 

M.

[fieldarchy]

Evers,

 

I do like the area, I'm not moving any time soon, I think I'd need a boyfriend first to get married and I've only just started seeing someone out here . . . even so I insist on being in a relationship with someone for YEARS before getting married. I don't mean one or two years I mean like 5-10 years. And the job, it's the same job I've been doing for a year, that's not changed. I just switched campuses.

 

This has kind of been my plan. I hate renting, I hate living in apartments and I want to get into a house. I'm pretty much looking at staying in a the same general vicinity as where I'm living now. I like it as opposed to being downtown. It's also just a starter home that I can call my own.

 

I'm at a place in my life where I can afford it. I'm afraid that if I wait I'm going to end up losing out on some deals. I come from the DC area where I can't even begin to fathom owning a house. My mom has a town house in the suburbs worth over half a mil. My dad and step mom's house is worth over half a mil and it's not in a nice neighborhood like my mom's house is. Even in Arizona I couldn't think of owning a home with the lowest prices at $250,000. I can afford half that with my job and I want my own space. I want to have a yard for my dog, I want to live in a neighborhood.

 

Last,

 

I don't want to buy a fixer upper as my first house. Yes, I know what I'm doing for the most part when it comes to fixing up a house but it's time consuming and can be expensive. I want to start with a new house that I will be happy with. I don't want the extra work right now.

[wildbill]

I don't want to buy a fixer upper as my first house. Yes, I know what I'm doing for the most part when it comes to fixing up a house but it's time consuming and can be expensive. I want to start with a new house that I will be happy with. I don't want the extra work right now.

 

Now, my story is set in Tulsa, not the Dallas metro area, but the principles still apply.

 

When I moved to Tulsa, I told my realtors that I wanted a house that was between $100K and $130K that required no work outside of routine maintenance. All I had to do was move in, put my stuff away, and start relaxing. Of course that eliminated a TON of potential homes, but I didn't care. It took a while to find my house, but I did. It was an older couple that were looking to retire and I bought an 1,800 sq. ft home that is almost the nicest on the block. There is one house that I would consider better than mine. It was built in 1983, so it had plenty of time to settle (hence, cracking foundation), the major appliances (water heater, a/c, furnace) had been replaced two years prior to my purchase, etc. I paid $125K for it. All I have had to do since is yard work.

 

Maybe before you totally settle on building a new home you ought to just do a search on a website or two and see what is out there in your price range that is currently on the market for sale. This will give you a good barometer for the size and quality of house you can get for the money. Then, go ahead and compare that to what you can get if you build your own. Is it comparable? Smaller? Better? Remember, do all of the homework up front and you'll be much happier in the long run.

 

Wild Bill

[vutpakdi]

I doubt that you're going to lose out on any deals for some time yet because the housing market is going to continue to soften for at least 6 months. Mortgages may be a touch harder to get, especially the riskier alternative ones, but the starter home market, especially in an area that is still being built out, is going to continue to be soft and prices are likely to remain the same or decline.

 

I really do suggest looking at a "lightly used" (1 to 5 year old) home in the area that you are considering, especially if you have some skills in reworking things if needed (which is unlikely in a 1 to 5 year old home except for doing some repainting). You should be able to find something that has the same floorplan (or close to it) to the one that you are considering, comes with curtains/blinds, comes with some appliances, and landscaping (including possibly sprinklers), for about $5-10k less (or more) than the house that you are considering building from the ground up.

 

Waiting for 6-12 months may prove even better deals as people who have adjustable rate mortgages see their monthly mortgage payments skyrocket and find that they have to sell their houses (or the houses go into foreclosure).

 

If you do get a previously built home (whether lived in or not), thoroughly inspect the home, especially the attic, before committing.

 

If you are still intent on buying a new house, the book Your New House was very helpful to me when I had my first house built from the ground up.

 

For my current home, I bought a 5 year old home last year. I have had to do some rework; the house isn't as well built as my previous home; and there are a number of annoyances that could have been avoided if I could have spec'd out the home and supervised, but doing so would have entailed a $30k-$50k premium on the house (at least, if not more).

 

I do plan to eventually be able to design and build a home from the ground up, but that will be a long time from now.

 

Ron

[GreyHorde]

Grey,

Are you talking about a bonded GC causing you so much of a problem? Just curious---as I would find that most unusual.

Yes, the first guy was a licensed, insured, bonded builder at the time we shook hands. Right before and many times after pen met paper, though, the reality changed; partnership dissolved, new LLC created, new jobs started and given higher priority, hooking us to pay subs directly, a never-ending litany of excuses, LLC allowed to dissolve...

 

This is really gross: Before they put the toilets in, even though port-a-pottys are provided, the workers were using the pipes as their toilet. They'd remove the cover, do their business, then continue on. I had my construction-worker uncle doing inspections for me regularly, and he spotted this. I didn't even *think* they'd do something so nasty.

Oh, the stories I could tell you...but then, my wife doesn't even know what I dealt with on-site. Buckets, paint cans, drink cups, soda bottles, beer cans...yep, you read that right...the back yard, the front yard, the brick on the front of the house, the basement pipes... I was just glad the roofers did not do what they did at a friend's site...the chimney. <wince, shudder, gag> It didn't matter that I had service on site, or trash cans or a dumpster for other stuff. The actions revealed the attitude: two steps was too far, two seconds was too long. Work fast in a sloppy manner, get done for the day so the real drinking can get underway. Get off this job as fast as possible to keep up the per-hour rate and move on to the next one. Leave the trash for the next crew. Any tools, materials or supplies left unattended by a previous crew are fair game.

 

Don't accept excuses. "It's too wet," as an excuse for not grading the back yard is NOT acceptable. Seven months later, ours STILL isn't graded, and now we have to get rid of all the weeds before they can do anything. Scott's lawncare is coming out tomorrow to treat for weeds. If they say they can't finish even one part of the job before you close, then tell them you aren't closing until it's done.

With a construction loan, you're already 'closed' and locked in, making payments. It's not the final mortgage, but that's just semantics to the builder, who doesn't see it as a problem. Contract enforcement by withholding the last little check has few teeth; they've already got enough money to walk away and get on to another job. If they feel they've made enough money and don't care about their rep or your last few $ in the grand scheme of things...emphasis on scheme...they'll walk, contract or no. They've got their money and it's not worth it to them to pull a crew off a new job to finish up an old one, so they make excuses. After all, the house passed occupancy inspection and you can move in, so their work is done, right? Making you happy about dirt in the back yard is not their concern. Civil litigation after the fact is almost impossible to enforce, and builders know it. The court believes 'too wet' not as an excuse, but as the builder looking out for the health & safety of his crew and the integrity of the site. That sounds harsh, but I've seen it first-hand and second-hand, happening to co-workers and friends.

 

Something else to think about: if you're not on city utilities and will have a septic system, the clearing, excavation and construction equipment can cause compaction of the soil and hold up permits until the site is fixed. Even if septic is one of the very last things to be done on the site, the builder may use it as an excuse to get busy elsewhere, like the next big, fast-moving cash cow or gravy train. Getting and complying with the permits is the builder's responsibility. Part of that is the builder supervising excavation and protecting the septic site. Failing that, if damage does occur, it can be fixed by the builder meeting with the health department and engineers to come up with a solution. On the other hand, if the builder doesn't bother to honor the contract and pull/follow/supervise permits, or supervise the excavation and prevent damage because it really is too wet for that area, or follow through with site remediation...you're in deep trouble. But I wouldn't know, because nothing like that has ever happened to me. No sir, not me.

[Heisler]

The area she is looking is very new. After touring Anne's house and knowing what that cost with some pretty amazing upgrades she will do fine with 125K. The home market in that area is not nearly as soft as it is else where so homes are currently retaining their values and builders are quite in the build as fast as possible mode. Its a reputable builder that is concerned with their reputation in the area.

[fieldarchy]

Heis thanks for being a positive voice in all of this. Several of my good friends are the only ones being supportive about my decision to even buy a house never mind build one. My parents aren't too happy with the idea only because they worry too much.

 

I know there are horror stories out there and I know people get taken advantage of. I always do my research, ask questions and get everything in writing before I agree to any big purchase.

 

I've gotten a pre-approval through the preferred lender for Fox and Jacobs (working through Centex Homes). I also have an appointment with a Real Estate Agent. Anne referred me to her and apparently Kit had referred Anne to the agent. I'm also going to check with a credit union out here to see what i can be pre-approved for through a different lender. I want to stay in the 125 range but I want to see if I can get a better interest rate.

[Kheprera]

FYI - We have a Centex home, so the experiences I had you can expect.

 

 

For the most part, we had great people working with us at Centex, and if we wanted to do a spot, surprise inspection, it generally wasn't a problem. I still recommend getting an outside person to do inspections for you as well (as I did my uncle). Most of the people they hire for the building part aren't super-good with the tools, so take lots of pictures and be nit-picky. Don't expect them to use the best wood. You won't be able to use the attic as storage due to how the trusses are built. It's not exactly site-built, as portions of the frame are pre-made at a factory then drop-shipped to the site where they are raised and put together like a puzzle.

 

If you can afford to get the rain gutters, do it. I wish I did, but we had to keep costs down as much as possible.

 

See if you can save and shop around for a fridge. The cheapest one they will install in the house isn't worth the $1K price tag. I got one that is a side-by-side 25 cubic foot for the same cost at Home Depot. I'm much happier with my big fridge.

 

Make CERTAIN they grade the yard before move-in. I and other people in my sub-division have had problems with getting them to grade our backyards. This shouldn't be a problem if you pay them to lay grass in the back (if you can afford it).

 

Centex is one of the better builders in the area and work hard for you and will help you get the best deal. Ask about possible grants in the area for first-time homebuyers or, if they don't have those, about buying down the interest rate. If we hadn't gotten the grant we could have bought down the interest rate a full point for only about $1500. Well worth it for the savings you can get.

 

When inspecting the house drywall (before they plaster over it) make absolutely certain to double check the ceiling as well. I have some nails poking through that I need to get fixed. I assume you're going single-story, so you shouldn't have to worry about screws in the upstairs floorboards.

 

For the most part I never had a problem with the mortgage people or the office help at Centex. They were always nice, friendly, and would bend over backwards to help. We also got a great bbq set at closing with knives, spatulas, kabob skewers and other things. If you can, go for the larger slab patio in the back. The "stoop" is nothing more than a tiny square step. I'm going to have to get some paving stones.

 

I think it's great you're looking to buy a house now, and are able to. The way I look at it is if you can do it now, don't throw your money down a black sinkhole of an apartment that earns you no equity. By investing in a house you're saving for the future, and doing it earlier is better. If I had looked into buying a house back when I originally thought about (fresh out of high school), I would have over $70,000 invested in the house, which would have probably paid for it considering house prices then were about $40K. That's how much in rent I had been paying over the past 19 or so years. The younger you are when you buy your first home, so long as you can keep up with the payments, the better your investment will be. I just wanted to share with you my personal experiences so you know what to look for.

 

Look again at how much they will charge for buying down your interest rate. It's a wonderful option for you, and the bank will be happy to have your business. I know when I talked to the first guy about it, he seemed surprised I even knew that could be done. Of course, my ex-step-father was a banker.