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Has anyone built or remodeled a home?

missy

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There's some really good replies here, lots of food for thought for my wife and I who are looking to buy our first family home soon.

We're kind of in a dilemma; we could build something that's exactly what we want, but we have to wait for it and pay a lot of rent that could go into a mortgage for a larger lot of land and an established house that's reasonably new and doesn't need renovating. The issue with the reasonably new, established option is every time we look to get more info on a place it's sold almost immediately. So trying to obtain one of those properties is a big gamble. Both options are roughly the same cost (within 5% of each other).

Open to any advice or preference over what someone would do in this situation.

That's a tough decision. I would go for the established house on the larger lot and save money on continued rent. I just asked Greg and he would build exactly he wants and wait for it. Haha so we are not on the same page here which is interesting because usually re real estate we are. I am a fan of paying your mortgage vs paying someone else's mortgage. Especially if you can get a larger lot of land and a nice house. One you want. And once you find it make the (full price) offer immediately. That's the key to getting the house you want. Good luck!
And continued healing dust being sent your way! Heal finger, heal!
 

missy

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Well thank you! I put pix up once in a while in the NIRDI thread and hopefully CFlutist will post pix when she starts her gorgeous home in the southwest.

over budget;

okay kitchen cabinets! he budgeted for us 27k which was absurd, first round came in at 90K lol, we got rid of cabinets, there are very few pull out drawer because they are expensive.

The pool, the first go round came in a 98k, we had built a pool with a raised spa in Austin in 1998 for 27k, this time 9same pool) was 98k, quite a big jump in 22 years, so we had to ditch the spa, we had budgeted 55k for the pool and it ended up being 77k

windows, we had to move down a notch or 2 because the windows came in quite a bit higher, not that i really care in one sense because we are in hotternhell Austin Texas so A/C is a lot more important.

our house is totally one of a kind sorta, we did say we wanted modern but I don't think i would ever do that again (frankly I am never moving again) the architect and fees were astronomical, like 50K redic.. but I do know people here in Austin who started at 100K that was the ante for a 5,000sq ft one of a kind house on lake Austin, they are mucho richer than us, 4 million dollar home.. so in the scheme of things guess my architect was cheap, but way more than we had budgeted. Our house is 3,400 sq. feet, 5 bathrooms, no dining room.. pretty basic really.

We have not even picked tile, wood floors, house paint, fans, pendant lights etc.

all the faucets, etc came in double and we moved down 2 notches to Delta, which are rated very well but average.

we paid 20k more for the lot than we wanted to.

on and on....

buyer beware but my home will reflect what's left of me ;-)

Dear @Bayek continuing good wishes being sent your way for your completed dream home. (((Hugs))).
 

jordyonbass

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That's a tough decision. I would go for the established house on the larger lot and save money on continued rent. I just asked Greg and he would build exactly he wants and wait for it. Haha so we are not on the same page here which is interesting because usually re real estate we are. I am a fan of paying your mortgage vs paying someone else's mortgage. Especially if you can get a larger lot of land and a nice house. One you want. And once you find it make the (full price) offer immediately. That's the key to getting the house you want. Good luck!
And continued healing dust being sent your way! Heal finger, heal!

Thanks Missy! Just hoping to get it back soon with some range of movement.

Interesting that you and Greg differ, would his answer change if he were renting and had these options? Or would he still opt to build?
 

missy

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Thanks Missy! Just hoping to get it back soon with some range of movement.

Interesting that you and Greg differ, would his answer change if he were renting and had these options? Or would he still opt to build?

He factored that into his decision. Ultimately he said it’s worth it to get exactly what you want. Greg said though only you can say that it’s worth it. Is it worth it to you?

My thoughts are nothing is perfect. But if the established house is near perfect ie what you want and the lot is larger that to me is a win. And no waiting and no wasting money on additional rent.
 

MRBXXXFVVS1

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There's some really good replies here, lots of food for thought for my wife and I who are looking to buy our first family home soon.

We're kind of in a dilemma; we could build something that's exactly what we want, but we have to wait for it and pay a lot of rent that could go into a mortgage for a larger lot of land and an established house that's reasonably new and doesn't need renovating. The issue with the reasonably new, established option is every time we look to get more info on a place it's sold almost immediately. So trying to obtain one of those properties is a big gamble. Both options are roughly the same cost (within 5% of each other).

Open to any advice or preference over what someone would do in this situation.

Buying your first home is so exciting! I would write down all the costs and pros/cons, and see what makes the most sense for you guys. The key thing is to be super on top of the market, use the Redfin app with notifications so you know instantly when homes hit the market, get pre-approved for financing, be ready to make strong offer immediately. The other thing I've learned is to buy a bigger house if you can afford it, so you can "grow into it" because buying/selling has significant transaction costs like realtor commissions and closing costs, etc.
 

MRBXXXFVVS1

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He factored that into his decision. Ultimately he said it’s worth it to get exactly what you want. Greg said though only you can say that it’s worth it. Is it worth it to you?

My thoughts are nothing is perfect. But if the established house is near perfect ie what you want and the lot is larger that to me is a win. And no waiting and no wasting money on additional rent.

It depends if you build if you are getting a construction loan, or buying a completed new construction. For construction loans, you want the one where you only withdraw what you need as the construction happens, ideally one that converts to a conventional loan at the end.

Rent vs. non-deductible interest on a mortgage is also something to consider. Paying rent might actually be cheaper in some cases. Most of the mortgage at first is going towards interest anyway. So I would break down the math and quantify it.
 

metall

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@MRBXXXFVVS1 - It sounds like you're about to embark on quite an adventure. YMMV but my experience was very good, I quite enjoyed the work, and I would 1000% do it again if presented with the option.

Personally, I would love to purchase a plot of land a build my dream home on one day - however, the way taxes are appraised in my area after a new build made it more cost effective for DF and I to purchase our first home with the bones we wanted and gut reno.

Over the last three years I have taken two apartments down to the stud and renovated them. One is the apartment I'm living in now and the second was an apartment in my father's house. Between my father, DF and I - we did most of the work ourselves except for removing two structural walls.

Some take aways from both experiences are:

1) know your limits - this goes for mental and physical, although DF and my father were happy to rip out the wall on their own - I was not comfortable enough so we hired someone. Physically I am a fairly fit, but my 115 lb body can only help lift so many 100lbs items around before i break something

2) research, research, research - moving from a more strictly regulated area to a more lax area, I was surprised by how much money I could save on simple materials - i.e. BX v. Romex, but after more research - we still opted for the more expensive BX because it gave everyone more peace of mind

3) if there are options, always go for the upgrade - I now reach for things and not even realize how much nicer having x feature has been i.e. kitchen faucet with the pull down hose or outlets with USB charging ports built in, the aforementioned BX v Romex above is an unseen upgrade but one that does give me peace of mind

4) when it comes to outlets, if the breaker can handle it - more is better - One of my regrets now is realizing that I should have added one more outlet in each of the bedrooms. When we did the electrical - we didn't think about all the electronics we use these days the usb outlets really are our current saving grace.

5) shop around, review your budget often and never tell anyone your actual budget - this happened to us while cabinet shopping - we went into two different stores and got quotes for the EXACT same set of cabinets (same manufacturer etc) and were given quotes that were 5 figures apart. After some haggling we walked away with an extra 20% savings - countertops included

6) phone a friend - you will be surprised how many people in your immediate circle have probably done x before, and how many are willing to help. We have a couple of friends in trade jobs and anytime DF had a question about products - they were always two text messages away. One of my best girlfriends got sick of not seeing me for a month straight - so she came over in her most fashionable overalls and we had a girls day wiring outlets and arranging flooring

7) know which tools are a splurge on - For example, we got a second hand jack hammer when we had to dig up my basement bathroom to redo the toilet drain because it was a 1-2 time use item, but we splurged on the brushless cordless hammer drill because it was a tool we used every few minutes. Referring to point 1. we also ended up with a number of "metall-friendly" items so that I was able to contribute more (i.e a small wheelbarrow for hauling, smaller shovel etc.)

8) forget disputes quickly, relax, enjoy the moments, music helps - DF, my father and I work very well together and I cherished the time we were able to spend together working through issues together. That said there were still disagreements about dumb things. On those occasions - we pulled out the old boombox and blast music for an hour while we each took care of our own tasks and then regroup. We learned early on that if we just stood there disagreeing, then continue to work together - nothing would get done for the remainder of the day.
 

metall

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@chrono I agree completely about wood floors. While it’s a personal choice I think wood floors are amazing and nothing looks prettier. And it wears well too. Not to mention it’s the cleaner choice I think.

Since I mentioned my DH building things for our homes here are 2 of his own creation.

Here’s the stone bbq my DH built at our first beach house. It’s gorgeous.
IMO.


636BA48F-7FFA-4EFC-8652-D0F72A041D2C.png



And here’s the outdoor table he built for our current beach home. It seats 12 comfortably. Though these past few months no company has enjoyed our house besides us. Covid blows.

90AEBE03-EA9B-4297-A75E-359DAF2C528C.png

@missy

WOWOWOWOW - your husband is VERY handy! I love what he did with the legs of the bench, and the barbeque is amazing.
 

MRBXXXFVVS1

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Ok, this might be a controversial question, so no judgements please as I have best intentions and am trying to get advice...

For selling a multi million dollar home, do you think it's appropriate to negotiate for lower real estate commissions to 1.5-2% for each agent? Do they add enough value to justify the 6 figure commissions? I had to work so hard to earn, save, and invest that cash myself. I would honestly just sell and do everything myself, but don't have time to get my real estate license. These days most buyers just find houses online anyway.

I got feedback that buyer's agents may steer buyers away from properties that don't have the full 3% commission, but to me that seems like a conflict of interest. Good agents should be helping their buyer find the best house for their needs vs. maximizing their commissions. If you do the best for your consumer, customer, or client that should lead to profit, but I know many may favor a quick buck. Thoughts?
 
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jordyonbass

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Thank you @missy and @MRBXXXFVVS1 for your replies!

We're thinking that the established house we're looking at is the one we'll chase at this point as it's big enough for us to grow into if we choose to have another bubs, also it's really luxurious and pretty close to what we would build anyway. The only problem is we can't actually inspect the building before making an offer due to Stage 4 lockdown, so we're going to try use that as a bargaining chip to bring the price down.

This is how fast the market moves in Australia; it's currently lunchtime and we received the legal documents this morning for review, sent them to our conveyancer immediately and she's currently reviewing. If she says to proceed we will make an offer.
I'm not confident it will still be available by that time.
 

MRBXXXFVVS1

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@jordyonbass I'm not sure how real estate works in Australia, but are the legal documents standard? Would you feel comfortable make an offer without legal approval? Can you also make the offer contingent on inspections and financing?
 

jordyonbass

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@jordyonbass I'm not sure how real estate works in Australia, but are the legal documents standard? Would you feel comfortable make an offer without legal approval? Can you also make the offer contingent on inspections and financing?

Yes they are standard as they outline things like rates and other information about the property that may not be standard. For example, no sub divide until 2025 for the property we're looking at (no problem for us). Another property we were looking at required an additional $2k per year on top of our mortgage and council rates for 20 years as the development was still being looked after the civil contractor and they do not receive any council rates to look after local parks etc. We decided against that one due to that.

We will make our offer contingent on finance and and a building structural inspection as well, but we can only view by photos at this point. It does look quite luxurious and it's something we'll be very happy with as long as there's no hidden surprises.
 

ringbling17

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[QUOTE="

We're kind of in a dilemma; we could build something that's exactly what we want, but we have to wait for it and pay a lot of rent that could go into a mortgage for a larger lot of land and an established house that's reasonably new and doesn't need renovating. The issue with the reasonably new, established option is every time we look to get more info on a place it's sold almost immediately. So trying to obtain one of those properties is a big gamble. Both options are roughly the same cost (within 5% of each other).

Open to any advice or preference over what someone would do in this situation.
[/QUOTE]

We were in the same situation. We priced out a few different homes with builders and we could just build what we wanted on a smaller lot but it would take a few months to a year and we would have to rent.
Or we could buy a fairly newish home on a larger lot. The problem was every single home we saw would sell within a day. We would see a house listed and the same day, even before we could make an appointment, it was gone. And most had multiple offers and/ or back up offers.
Prices were actually higher to build a home bc with all the upgrades I wanted, the price went up.
Finally I found a house in Dec that was in the exact area and school district I wanted, had almost everything I was looking for but on a smaller lot than I had wanted. I didn’t love the house but I knew I could make it my own with a little work.
We went to see the house and then the same day we went to the builder of a development we liked and priced out the same house we just saw. We had them price out a house with a similar floor plan, finished basement, we added a deck, wood floors, extra bathroom, etc, basically everything the house had, we added. To build a similar house it would cost us at least $100k more. And this house was on what the builders would consider a premium lot (and charge more for) bc it was on a culdesac and backed up to a 1/2 mile wide farm. Plus it had a pool and fenced in yard.
So we bought it! The house was a little overpriced and had only been on the market for a few days when we saw it so I think we were the only ones making an offer.
I honestly prefer a resale to building a new home. I think the process would drive me crazy. I’m too much of a perfectionist and I’m too indecisive that I would be so stressed the entire time. I wouldn’t buy a home that needed a total renovation though because that would stress me out as well, but a fairly newer home would be my choice.
Find yourself a good agent and make sure they know exactly what you want so when a new house comes up they can get you in the door ASAP.
Good luck!
 

doberman

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We've built one house and are renovating another. It's a giant headache.

If you can, go for wood floors. I hate carpet, it's impossible to clean. Carpet + pets = stains.
 

jasper

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For selling a multi million dollar home, do you think it's appropriate to negotiate for lower real estate commissions to 1.5-2% for each agent? […]

I got feedback that buyer's agents may steer buyers away from properties that don't have the full 3% commission, but to me that seems like a conflict of interest. Good agents should be helping their buyer find the best house for their needs vs. maximizing their commissions. […] Thoughts?

I recommend against negotiating to lower your counter-party's agent's commission. If your counter-party wants a discounted commission, she can negotiate that herself.

In Seattle, some of the discount real estate agencies do a great job. And some of the full-price agents do a great job that is well worth their commission.

During slow markets, it can be worthwhile for a seller to increase the commission, and provide those extra funds to the buyer's agent. It works, if the home's price is reasonable. And the conflict of interest that you perceive probably does not cause the buyer's agent to do any worse of a job of representing the buyer. The extra point of commission likely causes the home to go to the top of the list of suitable homes to tour.
 

TooPatient

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Ideas? Feedback? Things I am missing? (Including what does it cost to build a house as I see huge range of answers? I am working at finding out from local groups too. Just tossing that out as I definitely need to know ballparks to expect and what compromises we could make to have this be a possible option including leaving part unfinished and getting around to the finish work later.)

I just talked with a realtor I really like. He understands what we are after and is going to be great to work with. We are considering several options. My favorite would be to build our own home on a big piece of land. I am trying to figure out those details and see if we could do it.

1. Buy a house at a price that is less than we are in now, and take a slightly smaller mortgage while using a bit of the equity in our current home to make changes as desired to the new one plus pay off my student loans and the car. No new build. Just updates/remodels as needed. (This only works if we can qualify for a mortgage that is large enough to cover full purchase price as contingent on selling our current home is NOT an option for several reasons. (Great realtor talked with me about what is happening with contingent sales in the area so we decided it would be expensive and risky.)

2. Cash out refi current home. Use $$$ to buy a lot and build. Very risky. Not an option I like.

3. Buy a very low price home and finance that. Move into that house. Sell current home. Cash from current home buys land plus much/all of build expenses. Build. Move into new home. Sell low price home.

4. Buy a piece of land with barely liveable home. Move in. Sell current home. Build new home on land as we are living on it. Convert barely liveable house to workshop/hobby area later.

5. Buy land on land mortgage. Buy big motorhome. Sell current home. Live in big motorhome on land while building.
 

voce

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@TooPatient I think the cost of land varies greatly depending on the location. Labor and materials costs can be lower or higher depending on local conditions as well. However, if you're looking for a ballpark maybe you can use a web calculator such as the following one I found?

 

TooPatient

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@TooPatient I think the cost of land varies greatly depending on the location. Labor and materials costs can be lower or higher depending on local conditions as well. However, if you're looking for a ballpark maybe you can use a web calculator such as the following one I found?


Thank you! I will give it a try. Just a ballpark range for the area would be nice. One blog put it at just shy of $1,000,000 to build a 2,000 sqft house not including price of land! The house insurance person put it at $200,000 or less when I talked with them 10 years ago. That is a huge difference...
 

voce

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Thank you! I will give it a try. Just a ballpark range for the area would be nice. One blog put it at just shy of $1,000,000 to build a 2,000 sqft house not including price of land! The house insurance person put it at $200,000 or less when I talked with them 10 years ago. That is a huge difference...

Well, I would estimate the build cost for a 2,000 sqft house to be $300,000 this day and age. But, depending on the options, it can probably get as expensive as you want. Maybe the $1M house includes a rooftop deck, a backyard deck and a swimming pool plus marble in kitchens and bathrooms...
 

TooPatient

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Well, I would estimate the build cost for a 2,000 sqft house to be $300,000 this day and age. But, depending on the options, it can probably get as expensive as you want. Maybe the $1M house includes a rooftop deck, a backyard deck and a swimming pool plus marble in kitchens and bathrooms...

Super helpful calculator! That looks in line with the materials I had looked at. It also matches what insurance recommended for coverage. The blog guy is the next county over (where we currently live) where prices double just by crossing into the county it seems.
 

Big Fat Facets

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Yes, we have renovated and remodeled numerous times. From personal experience, I learned:

a) if funds allow, live off site

b) if funds do not allow off site living, then TARP TARP TARP with very strong tape because renovation dust gets EVERYWHERE. Then tarp some more.

c) designate a seperate entrance/exit for tradesman and household members to keep sane

d) visit site DAILY, multiple times daily is ideal, to catch mistakes before they become even more costly to fix

e) seek out specialists and licensed tradesman for that particular job. sure your framer could paint and lay your floor because he wants the extra wages BUT its not a good idea.

best of luck and hang in there
 

rocks

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Super helpful calculator! That looks in line with the materials I had looked at. It also matches what insurance recommended for coverage. The blog guy is the next county over (where we currently live) where prices double just by crossing into the county it seems.

It’s called a “zip code” premium.
 
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