“Building your own home,” has been an American dream for many prospective home buyers over the years. With the coronavirus pandemic causing stress on the housing market by reducing the number of homes for sale (because many people are staying where they are, and others are improving and adding to their homes rather than moving), is new construction an option for today’s buyer? Your Realtor can help you analyze the facts to assist with your decision.
When states issued lockdowns in 2020, many U.S. sawmills shut down even though it was a great time for homeowners to tackle home renovations and additions. This accounts for the rising demand for timber and an increase in price. In February, lumber pries were at an all-time high. Robert Dietz, chief economist of the National Association of Home Builders, reported, “Builders report concerns over increasing lumber and construction costs, and delays in obtaining building materials. Rising interest rates will also erode housing affordability in 2021 as inventories of existing homes remain low.”
It likely will cost more money to build a new home than to buy an existing home, yet watching your home from conception to move-in is exciting and compelling. There’s nothing quite like choosing the blueprints and layout of your dream home, seeing the foundation laid, watch it appear above the ground from nothing, and finally, choosing your finishes such as lighting, flooring and colors. But there is so much to know and watch out for – here’s where your Realtor is invaluable.
You should educate yourself on how to read a blueprint, a plat, be aware of construction costs and trends, appraisals, inspections, etc. You are the best person to protect your interest in probably the biggest purchase in your lifetime. These are things your Realtor is familiar with and can help you understand. It is not true buyers can get a better deal without having a Realtor involved. Your Realtor can recommend the right builder for you. Your Realtor can write the contract with, negotiate on your behalf and stay with you through the process.
A building contract should protect both of you and the builder and bot be to the builder’s advantage. Most Realtors will check in periodically with the builder and even send you progress photos. When considering “building your own home,” there are a few things to remember:
» First, take your time. Interview several builders your Realtor recommends.
» Make a list of wants and needs, and “walk” through the floor plans until you’re confident you’ve chosen the right one for you.
» Be sure you stay within your budget and have open communication with your builder about the costs, and the possibility of rising prices.
» Allow for setbacks when planning your timeframe because of delivery delays, weather or unforeseen issues.
Don’t forget, building your own home typically is more expensive than buying a home already built, but it can be very rewarding.