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House plans first vs. buying land?


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By Mary Beth in Dublin, OH on 4/21/2007


I am desperately trying to figure out the best way to start this project.

We do not have identified land as of yet, so I am wondering how far I can actually get in my planning/bidding/estimating phase? How wise is it to draw up a set of plans, spec them out and then get bids in order to get your budget started for the project? What if the land you find does not conform to the house plans you have paid a lot of money for? How detailed should you get in your house plans if you don't know site placement, walkout, flat lot, width/depth issues?

What am I missing? I truly want to get the ball rolling in finding out whether we can even afford to proceed, but now I am second-guessing how to do it. It almost seems like if you spend the money and draw up the plans without a lot, that you are putting the cart before the horse.

Will appreciate any feedback!

Thanks!

Mary Beth


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By Dale in Richland, AZ on 4/21/2007


Welcome.

You are correct about getting the cart before the horse, getting too far into the plans before signing a contract for the land.

Unless you live in an area with uniform views and lot conditions, I would suggest roughing out a layout, then look for a lot that suits your house needs. Then after the lot is chosen, finish the design. Otherwise you will spend a lot of time redesigning.

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By Lori in Reno, NV on 4/21/2007


Mary Beth,

Welcome to OwnerBuilderBook.com. I suggest you read The Owner-Builder Book first, and remember planning is never a waste of time.

When we started planning to build our dream home (2001) we knew what we basically wanted in a home, for example, single story and approximate exterior size 60x60. At one time during the land search, we found a lot that would have been perfect for a daylight basement, but then my knees reminded me why I wanted a single story.

We finalized the plans and started building 2 1/2 years after we bought the land (not our choice at the time, but military obligations put the build on the back burner). Not much with the plans changed. We made it a little wider and didn't add the mother-in-law quarters (will do later if needed), but basically we kept the plan the same.

I wouldn't suggest buying a set of plans that you may not be able to use later (I had a friend who did that). Get some design books or look online; decide what you want in a home and plan from there.

When we were actively looking for property, we only looked at lots that would accommodate the size and style of home we wanted. Here in the Reno area that is still possible. We wound up buying farther out of town, so the house size was not a issue, as we bought a large piece of land.

Hope this helps! Lori


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By Doug in Lawrence, KS on 4/22/2007


Sounds like affordability is a concern, and rightfully so! Start the process by looking at homes in your area to determine an average cost per square foot. Then look at lots or acreage to determine average costs. This will give you an idea of what you can afford to build and allow you to begin the process of planning to build your home.

I would strongly suggest buying the land before you spend any money on house plans. While looking for land, you can buy a few "home plan books" and browse for floor plans that appeal to you. Once you have identified and purchased your land, the process of detailing your home can proceed at full speed. 

Doug


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By Mary Beth in Dublin, OH on 4/22/2007


Doug,

We have lived in the area for over 12 years and feel like we know the market pretty well. High-end custom homes around here probably go for around $180-$250 a square foot. We do not want to live in a subdivision after 12 years of doing so. Therein lies the problem. Finding land, 2-3 acres, is virtually impossible as all the builders have bought it up. We also do not want to leave our school district boundaries which makes our parameters even smaller. I have been dreaming and planning for this home for many years. I have purchased every plan book published. I have scoured every stock plan website. We have a largish family (6 kids), so most homes will not suit us the way they are represented. Modification is a given.

I have just finished The Owner-Builder Book. Very good read. It inspired what I already felt like I could do. For us to be able to afford this type of house we will need to build ourselves. I stay home and will be available during the day to be on site. I am a project person by nature. The home we currently live in was built by a small custom home builder. While it was based on a fixed-bid price, he gave me a lot of latitude to bid out suppliers and purchase in non-conventional ways so I could get more product for my budget hence allowing for more upgrades. I didn't have control over subs, but thankfully they weren't too bad - except for the plumbers. I realized that the GC's job was to schedule, purchase and maintain quality control with his subs. I knew I could do that, too.

As our children are quickly growing I don't want to wait another three years to get what we need right now. I basically know what style of house I want and that is why I wonder if it is prudent to start working with either a designer or architect so I will have a lot of the legwork done when we are able to secure the land. I'm figuring a designer would at least be able to work with ideas and planning thoughts to begin this project and may just need to modify right/left presentations or other issues similar to that. Since we know we don't want a subdivision that would have a lot of covenant and building requirements, I was thinking that we wouldn't be as restricted building outside those limits.

I am getting tired of laboriously poring over plan after plan and not really finding the "perfect" plan. I don't think it exists. I would have seen it by now. I want to be one step closer to doing this and be in the driver's seat once that elusive property is found. We will have to do some creative financing because we don't want to sell our home until we move into the built home. I don't want to carry interest on the lot any longer than I have to.

Thanks for all the input.

Mary Beth


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By Michael in Cave Creek, AZ on 4/22/2007


Mary Beth,

Here are the steps I would take next.

1.  Decide how many square feet you need. Multiply by $120 to $180, to determine your overall program budget.

2.  Talk to a local banker or two and get him interested in financing your project. He will give you an idea of what kind of financing you can get. Some combination of a home-equity loan and lot loan may be the best strategy at this point. Just make sure the banker will later qualify you for a construction-to-permanent loan.

3.  Start shopping for the elusive piece of land that you are looking for.

4.  Write an offer with a long escrow and some inspection contingencies.

5. Once the offer is accepted, immediately verify availability of utilities (at a reasonable cost) and permits for what you intend to do.

6. Take pictures and mark-ups from your plan books to a designer and ask him to design a house to your liking on the lot you have locked up in escrow.

7.  Finish the plans and close on the lot.

8.  Apply for a permit the day after you close.

9.  Let the trades and materials suppliers bid your plan and get your construction financing in place. Adjust finish levels and details as needed to make the budget.

10.  Build your house.

11. Move into your house.

12.  Optional: Wait two years, sell your house tax free and repeat!! If you do this well a few times, you can have no mortgage in 4 to 8 years and you will never need a conventional job again.


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By Doug in Lawrence, KS on 4/22/2007


Michael has pretty well summed up the perfect plan. One point I might add, start working on your own floor plan. With 6 children, you will not find a plan to suit your lifestyle. My wife spent three years drawing our floor plan and detailed it down to every outlet, fixture, etc... She even went so far as to build a model of our home with foam board (so we could see it in 3-D). When it was time to go to the designer, everything was laid out and it saved us big money on our final plans. 

Good luck on finding land. The county we live in is very similar to your situation; few small tracts, and the ones that go up for sale are getting $12K+ per acre. 

Doug


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By Lori in Reno, NV on 4/23/2007


Mary Beth,

I would like to state that I would personally check for utilities on all prospective land before I buy it. This equation plays a big part in the cost factor.

Our home is on a septic, so we paid for a perk test before we bought the land to make sure we wouldn't need an above-ground septic. 

I agree with you about it being hard to find a plan that's suited to your family needs. We too had this issue, due to growing kids and aging parents. I bought a pad of graph paper and started planning what we wanted. Then I worked really close with a designer in Las Vegas. I knew what I wanted and he knew what engineering could do, but we got it hammered out. I can be very stubborn when I want to be.

After we had an approximate square foot for the house, I started pricing things and subs. Which I knew would change by the time we built, but it gave a number to work with. I even starting buying stuff when I saw it on clearance.

We will be in our home in another couple months. A couple of issues pushed us over our year mark. 

Lori


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By Kenneth in Lees Summit, MO on 4/24/2007


Mary Beth,

There has been some good advice given here, but I thought I might weigh in with a different perspective.

I would get the lot first, and as with a perc. test recommended, and reasonably priced utilities, I might also suggest a geotechnical evaluation just to ensure you can indeed put a foundation there before I finalized the purchase. However, this doesn't mean you can't have an idea book, or dream book of what you want the plan to be. These will greatly aid the designer or architect.

·        What exterior style do you like,  how do you want the rooms to flow

o       Do you want a ranch, 1-1/2 story, 2-story, walkout basement

·        Where do you want your laundry room

·        How many bedrooms

·        Do you want the master bedroom separate

·        How many bathrooms

o       Perhaps some Jack-and-Jill bathrooms for the kids, etc.

All of this information is critical to planning and developing a basic cost estimate, even without a final set of plans.

Architects cost money and I prefer architects to designers. You don't want to spend a lot of money on plans that need modifications; thereby costing more money. Yet, you want your architect to be efficient in their use of time. Therefore, having your idea book or dream book will greatly aid them in meeting your needs. You can develop specs and expectations without a floor plan, but the floor plan should be designed to the land.

 


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By Bryan in Springfield, OH on 4/24/2007


Mary Beth,

Dublin is a very expensive place to buy a home, but don't think that those prices are a good estimate of what it costs to build in this area. I'm building on the SE side of Springfield and am in the $75-$80/sq ft range for 3,700 sq ft w/a high level of finish. I'm saving a decent amount with a simple design (i.e. two-story w/o lots of gables, roof angles, etc.) but materials and labor in our area aren't that high. I'm even pulling some subs from Columbus.

Bryan


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By Mary Beth in Dublin, OH on 4/24/2007


Bryan,

I would love to know how you are getting $75 a sq ft!! Wow! That's great. Are you doing a lot of work yourself? I think prices are a little out of whack around here. Springfield is a nice place, too. I swear, as soon as some subs drive into our neighborhood they tack on an extra 100%. Many people never even blink at that. If I can't get my price around $150, I'm not sure we can do this project. I know we will pay a premium for land IF we ever find any! When I get a chance, I am anxious to check out your blog.

Mary Beth


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By Mary Beth in Dublin, OH on 4/28/2007


Michael,

Great list! Couple of newbie kinds of questions... If I determine how many square feet we want and can afford... say it is $120/sf... does that per-sq-ft price include all the fees (tap-ins, septic, gas etc.... permits and the like?) Or is this price the building supplies, labor costs only?

We may have identified some land, but it costs a bit more than we were originally thinking of paying. It is also a lot more land. Right now, we know it has to have a septic, well and propane tank. Have NO idea what all this could run into. Not to mention the setback would be quite a ways from the road, which would increase the costs of the driveway and hookups for electric and phone lines and maybe cable. I'm really nervous, because we would probably need to jump on this land pretty quickly to secure it, but I have only just started this process and not sure how we would commence from here. I don't feel like I have had a chance to do enough of my homework. I'm willing to do my due diligence but want to make sure I spend my time wisely and not end up on a lot of tangents that get me nowhere. Would appreciate your seasoned advice.

Thanks,

Mary Beth


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By Teresa in Martinsville, VA on 4/30/2007


Here is what I recommend: you should first and foremost decide the total amount you are comfortable spending on your project, including the average cost for land. If you have already looked at some properties, you have a good idea of what it may run. Subtract out the land cost and the remainder is what you need to focus on for your project. For example: you want to spend a total of $250,000 and the land cost is $50,000. Take the $200,000 and divide by $100 per square foot, giving you 2,000 square feet of house. 

The $100 per square foot should include everything for your Certificate of Occupancy. (Unless you are going to have Italian marble floors and high-end granite countertops.) 

Or you can figure your costs as an Owner-Builder by getting your materials/components quotes together. Then multiply that figure by 3.0 for a projected cost for your project. That would include your foundation, HVAC, plumbing, etc. For example: say your material/components come to a total of $75,000. Multiply that amount by three for a total of $225,000 for the structure. Then you will know if you need to go back and substitute OSB for plywood or use floor joists instead of floor trusses to reduce your overall cost.

Hope this helps!


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By Kenneth in Lees Summit, MO on 5/1/2007


How do you get your component costs together without a plan to do takeoffs? You can use a rule of thumb that X,XXX s.f. will need a certain-sized HVAC, and perhaps a certain-sized lumber package, but this is really preliminary until you get a plan together.

I wouldn't spend as much time as this. Go the the library, get the RS Means Contractor's Pricing Guide: 2007 Residential Square Foot Costs (or you can buy it, it is under $40). This gives you a good method of preparing estimates, adding or subtracting level of finish, adding or subtracting level of complexity, locality factors, etc., and really does provide a good estimating tool to determine what you can build for what cost. You don't need to have material takeoffs to make it work, it is all based on square footage, so you don't need plans to make it work either, which is why it is such a good planning tool.


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By Mary Beth in Dublin, OH on 5/1/2007


Theresa,

Is $100/sq ft about average for the owner-builder? What spec level are you including for that? This would be a custom home for us with many higher-end products. You mentioned "not granite", so that is why I am asking. Around here, a buyer would pass on a house in the price range we would build in if there weren't granite counters or something of equal value.

You always have to be thinking resale, too. I would love to get $100/sq ft! That seems really reasonable to me. The real-estate agent who has the lot listed told me she just built with a GC doing cost plus and came out at $125/sq ft. He took 12%. That doesn't sound unreasonable either.

I'm also not sure I am following you with the materials at $75K times three. What does the tripling represent?

Thanks for the good thoughts to ponder.

Mary Beth


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By Teresa in Martinsville, VA on 5/1/2007


Across the board, $100 per square foot is the average. Some areas can come in as low as $70 and some (like yours) may come in above the national average.

But even so, you can be savvy when shopping for the cosmetics of your home. There are many places to shop for high-end materials without busting your budget -- such as Lumber Liquidators, buying clubs, and internet close-out companies or auctions. 

You said the 'real estate agent just had a house built with a GC doing cost plus and it came out at $125 per sq. ft.' If you are going to oversee your project as an owner-builder, you will be better able to control that square-foot amount. A general contractor takes everything and adds margin to it; such as the lumber materials, subcontractor bids, windows, doors, finish end products, etc. 

You also can get a 'rough' idea of your materials cost by taking your total square footage (including garage and bonus room) and multiplying by $35 - $40. That would be the structural materials; subflooring, interior frame walls, exterior walls, windows & doors, and roof materials. This is where the x3 number comes in. (I work with a bank and that is a national average to project total cost to complete the project.) The x3 includes the completion of the structure: finish floors, insulation, sheetrock, interior trim, cabinets, HVAC, electrical, plumbing, etc. This should give you a general idea of your total cost to build. 

Don't think because you build your home for $100 per square foot that it won't have any equity or value upon completion. I built mine for about $90 per square foot and have Silestone countertops, kitchen cabinets in cherry, and beautiful hardwood floors. I had 30% equity in my home when we finished.


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By Kenneth in Lees Summit, MO on 5/1/2007


It's Parade of Homes time in Kansas City. The single easiest way to see what you get for the money is to go out and tour brand-new houses. When you do this during planning, you can quickly realize your square-foot costs in your area, including land. Land is about 20% in my area. The Parade is about selling build jobs, so you can find out land costs easily just by comparing lot prices with house prices. You also realize what features you get for the price, and more importantly, what upgrades you don't get that you may want to get if your budget allows.

Remember that Parade houses have 6-7% Realtor commission right on top, in addition to a GC OH&P fee of anywhere from 10-30% depending on how hungry they are (and Parade homes, probably towards the higher range since these are feature-laden advertising homes). So take your $400K Parade home, reduce the price by $24K because you aren't paying a Realtor to sell it for you, reduce the price by another $60K because you aren't paying a GC, and your bogey price is $316K on a similar house with similar level of finish.

Now then, sort your design to maximize use of materials, start shopping, actively manage your project to minimize costs through your planning, hire better subcontractors (the volume builders use different subcontractors than O-Bs. Typically, O-Bs pay more but get better value), and chances are real good that you will end up saving an additional 10% off of this number, without lifting a hammer or getting your shoes dirty. This is either instant equity, or more likely upgrades you are going to buy because O-Bs don't actually save money (we all have a budget) but we certainly get much more for every dollar we spend.

I paid $75-$80/sf a couple of years back (not including land) and got a custom design from an architect, ICF construction, stout interior structure (no standard floor joists for me), upgrades everywhere, efficient HVAC with five zones, hardwood and tile throughout on the main level, all custom cabinetry including bathrooms, solid-surface countertops (Corian) in kitchen and bathrooms, fiber-cement siding, level-5 sheetrock, fiberglass windows, basically anything that could be upgraded was upgraded. I saved $60/s.f. over a quote I got from a GC, and realistically he wouldn't have provided the same level of finish that I ended up with. I just toured a $2M Parade spec house (about $200/s.f.), and quite honestly I have nicer structure and/or finish in most areas than this house (although for $2M you get nicer kitchen appliances and a better view, nicer trimmed-out stairs [I guess they put the experienced trim carpenter on the hardest area] but little else). 

Also included in my price structure is that I did a lot of work myself, but this truly wasn't where my cost savings were. My guess is that all of my trades combined saved me about $10-12/s.f., which is relatively small compared to my partner, who expended less effort and ultimately saved much more money. She is a ruthless shopper and subcontractor screener.  However, she probably got a callous or two on her dialing finger ;-).


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By Mary Beth in Dublin, OH on 5/1/2007


Teresa,

Good feedback. Your total square-footage formula (sq ft x $35 x3); does that include the labor costs and all other extraneous fees like permits, septic, wells, hookups, etc.... etc....? Because I don't speak fluent "contractorese", I find that I am often left thinking, "but?...." I'm trying to hasten my learning curve, but only experience is going to get me there, I fear. I just don't want to make any horrendous mistakes in the process. Square-feet formulas are often thrown around and I don't always know if we are talking about "total" costs of everything rolled into one price per sq ft or if the number is only describing materials only, and you would have to add other costs on for everything else. Quite confusing!

I also talked to Ownerbuildersolutions today, and they are ballparking me a quote for the framing package for a 5,000 sq ft home of roughly 25 to 30 dollars a sq ft. Right now I have NO idea if that is a good ballpark or not. I have only described to him the type and finish of the home we want. We do not have plans yet. But so far, I have appreciated the customer attention I have received from them. The rep says they may be a bit more expensive up front, but I like the fact you don't pay them any extra for them to be there to answers questions throughout the job. I also just like the quality-control aspect of the panelized-housing model. So much to think about!...

Thanks,

mb


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By Teresa in Martinsville, VA on 5/1/2007


It sounds like you are doing your research. My formula is for you purchasing the materials and having a framing crew assemble the walls on site along with installing windows, building the floor system, building the roof system, etc. The x3 should give you a rough idea of what materials should project out to total cost. This would be everything from the driveway to the landscaping. But you have to be a good shopper and get multiple quotes for materials and labor. And make sure the vendors/contractors you are soliciting quotes from realize they are not the only ones submitting to you. 

The panelized system is a great way to streamline the building process and give you a great handle on the structural expenses. If you have an attentive representative, all the better. Just ask lots of questions!


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By Kenneth in Lees Summit, MO on 5/2/2007


When people throw around square-foot pricing, they are talking mainstream-style houses. You build out of the ordinary, or out of proportion, and square-foot pricing no longer applies. For example, square-foot pricing normally would include exterior appurtenances such as driveway, deck, garage, etc., but these are obviously not included in the square footage of your house, so how are they included? Build a 600 s.f. deck on a 1,200 s.f. house, and suddenly you are outside the model and square-foot estimating no longer works. Now add a three-car garage and blow it out of proportion that much more.

Which is why I recommended the RS Means Manual. Rule of thumb and standard square-foot pricing only work within a very limited range. Start adding septic systems, wells, run long lines of electrical service, long driveways, extensive land clearing, larger decks, level of finish, upgraded materials, and square-foot pricing suddenly gets blown out the window. The simplest model is frequently not the most accurate, although it will usually get you in the ballpark, which is all it was ever intended to do. You are building 5,000 sf, around here that could be anywhere from $500K to $1M+. There is your ballpark; it is a pretty big range, but I bet I captured it somewhere in there - that's what s.f. pricing will do for you. Now sit down with the RS Means Manual, and I bet you could get your estimate within $25K of what it would actually cost for a GC in your area to do the job as opposed to +/- $250K.


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By Teresa in Martinsville, VA on 5/2/2007


FYI: I am not 'throwing square-footage pricing' around. I happen to do this for a living and assist people every day with calculating (ballparking) their cost for materials and working up their budgets. If you go back up the thread you might take note I said to include garage and bonus room in the total square footage before using the multiplier. 

Believe it or not, there is more than one way to work up your projected cost to build. When I am working with someone, I am usually looking at a cut sheet or a set of plans. And there are different multipliers for different foundations (excavation, block, concrete vary depending on foundation type). Most of the houses I am calculating have complicated roof systems and uneven footprints with lots of glass -- so I wouldn't call them 'mainstream' plans. 

The absolute best thing to do is work up your preliminary budget and spending limits for the house and decide if it is even 'within' your desired range. So, if you found a 5,000 square-foot house that may cost anywhere from $540K to $600K to complete, but your limit is at $500K; you might want to look at scaling back the square footage of your plan. I have advised people to reduce the size of the house to stay under their spending ceiling.


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By Kenneth in Lees Summit, MO on 5/2/2007


OK, you caught me, I have never done any project estimating before ;-). Perhaps that’s why I recommend (and use) the most widely sold, quoted, and respected unit price guides on the market, also used every day by people who do project estimates as their only job. And you recommend what as your source?

 

You use a set of plans to take quantities from, a valid technique that has little validity here, because as Mary Beth has identified she doesn’t have land or plans yet, and is still trying to figure out if she can afford to undertake such a project. If she can’t afford to proceed with her O-B project to build her house, there is really no sense in expending funds by hiring an architect or designer to draw up a set of plans. In fact she is undertaking her O-B project so she can save money to get what she wants, as opposed to paying $180-$250/s.f. for custom construction in her market. So your estimating alternative of using construction materials and components is relevant here how? And your alternative estimating technique of using $100/s.f., when she has already identified that custom houses are costing $180-$250 in her area?


Based on her continued responses, she is a clearly a novice trying to understand the limitations on square-foot pricing, when it is appropriate, and what might be included in this figure. And you are familiar with the building trade in Dublin, Ohio because you loan money there? I certainly am not and never claimed to be. Working through the appropriate RS Means Manual, all of this is explained and the limitations are clearly set out. There is no magic number, as an estimator you know it simply is not that easy.

 

I apologize if you took my message as a personal affront, as I merely meant to explain that using a square-foot pricing model leaves a lot of gaps and potential for misuse, especially for a novice. A good cost estimate is critical in the planning process, as it really drives her decision points in her design (can I afford this), her land acquisition, her financing, and a whole host of other critical elements that would ultimately lead to reduced stress as the project proceeds.


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By Teresa in Martinsville, VA on 5/2/2007


I am not aiming for a p****** contest here. But since you ask about my source, I have about 28 years of experience.
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By Dale in Richland, AZ on 5/2/2007


There is a wide range on what construction costs, and most of it is a local labor difference. A better than medium-quality home with above-average finishes can be built for about $50/sf on material costs. Everything else is labor, profit, taxes and fancy add-ons.

The difference between a $100K home and a $500K home of the same size is not, for the most part, the cost of the basic structure. Sure, that 16' ceiling adds some wall cost, but not that much over a 10' one.

Some of us here who are professionals have tried to cut the baloney and others have tried to make it thicker. Let's face it, if construction were that difficult, states would require a formal higher-education degree as part of the contractors' requirements and exam process. The majority of the workers on my job sites never finished high school or speak good English (or any), but they still do a great job and get paid very well for their experience and knowledge.

Could I do the whole project myself? Sure, but why? I can make more money at my job than I would save by not having a tradesman do it for me.

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By Mary Beth in Dublin, OH on 5/2/2007


Well, guys (and ladies!), it seems I have opened a septic system here! I do appreciate all the great thoughts and musings. Keep them coming! Gosh... did I give away my newbie novice status so easily? ;-) I realize I've not owner-built my own house before, but I am college educated and run a busy household with 6 kids. I figure that has to translate into a learning curve here soon. I know my questions kind of sound basic to so many of you who have been down this road time and again, but thanks for still being here answering them one more time.

I spent some time today doing some cost analysis with some higher-end spec homes around our area. I've been through them, and they have all the bells and whistles. Maybe not ultra luxury, but very nice standard custom features. When I back out the cost of the lots (which I know because I looked at them, too), knock out 6 percent for the Realtor and take off 20 percent for the builder, I am coming up with some interesting figures that range from $115-$130 a square foot. That's more palatable.

If I were building a small bungalow I wouldn't worry, but we are talking about the house for our next 10-year era, and we don't have a large margin of error - so 100 dollars a square foot I could do, but 130 dollars a square foot would sink the ship. There are certain design elements of the new house I am not willing to compromise on. I already live in a home we built with a GC five years ago that has most of the features we need that you can't buy standard in the market. It just isn't worth it to move into a scaled-down home just for the experience of building by owner. I just have to be darn sure before I take on this herculean task and ask my family to stand on their heads that I know we can get what we want and be able to pay for it when it's done. I can already imagine the wild dreams I will have during the process. One money-pit dream after another...

I know this forum crosses over many many market areas. Theresa, when you are estimating budgets, is the 100 dollars a "mean" for the square-foot price nationwide, or just your area? With your experience I would think that you have a handle on margins of material costs and labor throughout. I understand it is not a "simple" calculation. That is why I want to know how much money to lay out right now to get some hard plans down in order to do a tighter (very much tighter) budget breakdown. It just may well be that the money I spend on getting some decent working plans is the investment I have to make to take this to the next level. Hopefully, it will pay off in the end.

I've talked with ABS about using their architect-design services. The plus about that is they refund that cost back to you if you build with their system. The downside is you don't have an architect who can come to your site and do a visit or have a face to face with them to come up with true personal-design issues. It might work out fine, but... the local guys all seem more expensive, but are, well, local. That's a big plus, too. Since I've never used an architect, I don't know how much everyone depends on theirs once the project gets going.

TIA,

Mary Beth


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By Lauren in Bedford, VA on 5/5/2007


Mary Beth,

I kind of lost track of some of those replies, but I strongly encourage you to get your lot before you hire an architect or designer. 

You basically know what you want. Your amenities, style, square-footage requirements, etc. are going to remain the same no matter which lot you end up with. What you cannot predict are the views, lot layout, neighbors, maybe even topography. These are absolutely crucial when it comes to planning your floor layout. You may want to capture a view of the west, but still need an approach to the house from the north and have to keep your privacy on the east. All of this will determine your room layout. And how these rooms relate to each other and to traffic flow inside your house could mean a life of annoyance or a life of planning brilliance and satisfaction. 

A good example is our situation. We have bought a large, rural lot with wonderful views. I, too, have scoured every house-plan site, bought way too many home-plan books and magazines. But we could never have picked out a plan that would have suited. Because of the size of our lot, we will be adding a pool. The placement of the future pool is determining the location of a powder room on the pool side of the house. This restroom has affected our entry, living-room areas, and traffic flow into the kitchen. I could go on and on about all of the manipulation of floor plans that we have done since having the lot. 

But the point is this: why pay an architect or designer for work that will almost certainly involve LOTS of changes? Yes, it is cheaper to do it on paper, but it is even cheaper to do it on your own paper, not the architect's CAD software, and certainly not on his or her time. The more you can decide before you even go to the architect the better. 

Good luck,

Lauren


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By Mary Beth in Dublin, OH on 5/6/2007


Lauren,

Wise advice. I think we have found our land. Probably putting an offer in today or tomorrow. While exciting, still very scary. We are "extending" ourselves a bit, and that is why I'm trying to be as prudent as possible because there just isn't any room for costly mistakes. I am still interviewing architects. I have found one who has moved to the top of the short list. He really seemed to connect with my ideas, and even when showing me his portfolio, it had an elevation of a home style that I was already mulling around in my head.

We are considering using a panelized-home company for quality control and turnaround time. I know if you use the design architect at their company they will refund the money back to you, but something in me says having a local architect could really pay off for all the reasons you stated. Seeing the actual house placement with privacy issues and best use of sunlight and windbreaks. This architect says his work runs about $2-$2.50 a square foot (living space) He also does not sound unreasonable about giving needed advice or help during the process if needed. He said he generally doesn't even charge for that if it isn't complex.

Your home sounds really neat. Do you have a construction journal? I would love to see it.

Mary Beth


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By Lori in Reno, NV on 5/6/2007


Mary Beth,

Good luck with the land. Have you looked at our construction journal yet? We are in the process of building a panelized home, as are several of our friends. We are the only family who built custom.

IHE normally gets their panelized packages from Nu-Fab, a company out of Canada. All our friends got their homes this way and Nu-Fab's work is outstanding. We got ours from a California panel company, because Nu-Fab could not do our home for the right price and IHE was already locked into a contract price with us, so to save their butts we got the short end of the deal. The difference in quality was significant.

Because of your location, IHE would probably use Nu-Fab. Check out their website; you may be able to go direct with them: nufab.com.

The $2-$2.50 is a good price. We paid $6,196, which included the engineering fees. Our home is 2,508 sf of living space, a two-car garage, and we have just under 1,000 sf of covered patio.

Our package is $122,187, which works out to be $48.71 a sf, but if you include the covered patios, it is $34.83. Included in the package was paneled walls (sheathed on Nu-Fab packages), drywall, insulation (walls and roof), floor joists, rim joists, trusses (patios are under trusses), cabinets (kitchen and bath), siding, OSB for roof and subfloor, shingles for roof, all windows, and doors. I think that is all. I could send you the worksheet they used for our budget if you want. It may help you out.

We have learned so much during this process and wish we would have bought two pieces of land when the prices were down. But, you know what they say about hindsight.

If you would like to call our contact at the bank, it's Peter Grabowski at 877.415.1020. I am sure he could answer a lot of your questions. They do a lot of paneled O-B loans.

Good luck. Hope this helps at least a little!

Lori


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By Mary Beth in Dublin, OH on 5/6/2007


Lori,

I'm so glad you mentioned IHE. I just talked to a rep this week. Apparently, they are trying to get the Columbus, OH market area going. As of now, they don't have any homes here yet. I have only talked to Ownerbuilder Solutions out of VA which I believe is part of ASB Systems. I'm trying to get a good feel for how these two groups are alike and different. I'm thinking they are more alike than different.

That's good that you have had a good experience with them. I would love to see your budget-sheet breakdown and how custom you went with your home. I think I am going to have an architect go ahead and get started on the plans. That way I will have something to submit to these companies for budgeting purposes. Is there anything to keep in mind plan-wise when giving panelized companies like IHE your plans to do their takeoffs? What really busts the budgets with the panelized companies? Did you say you went with Superior Walls, too, or am I thinking of someone else?

If I could be guaranteed to get $100 a square foot, we would be fine. What do you think your final square-foot total will be? The name of the banker you gave me... is he affiliated with IHE?

Thanks so much for the input.

Mary Beth


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By Lori in Reno, NV on 5/6/2007


Mary Beth,

I have attached our spreadsheet and a copy of the house plan. I put the designer I worked with through the ringer. We had a few heated moments over the phone. My husband and I knew that we wanted a big kitchen and a big master suite. All of our children are grown and our youngest son still lives at home, but when we move to the new house he is staying in the old house, so we designed the house with the two of us in mind with a future in-laws addition if needed.

The only thing I wish was different about the design is, I have always wanted a large laundry room. We have a 6x11 in the house we live in now and it isn't big enough, so I am unsure why I didn't insist on a bigger one in our dream home. I can only guess it had something to do with its location in the house.

We designed the house so it could be added on to in the future without any roof modification, which will save money. The large covered porch will be a nice place to sit in the summer.

Because the house is only one story and wide, our attic space is really big. This is something we didn't know about before we finalized the plans for the trusses. If we did, we would have asked for an open-beam truss system (I think that is what it is called) so we could have knee walls and finish out the space. As it is now, we have an 8' wide by about 40' long and 12' high center (see picture) space that we access by a pull down ladder in the master closet. If we had known there was going to be so much space we would have definitely utilized it better. It will only serve as storage now.

Our budget busters had nothing to do with IHE. We went over budget on the well, septic, power, and the foundation. When I have time, I will send you just what each line actually cost us if you would like.

Because my home didn't come from Nu-Fab like most IHE packages, I know exactly what all my materials cost, because I got the bids and ordered materials from local companies (all but the panels, but I know what they paid for them also).

Hope this helps.


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By Mary Beth in Dublin, OH on 5/7/2007


Lori,

Did IHE generate this budget spreadsheet, or did you do it on your own? Just curious how you got all those numbers. Is it a working spreadsheet whereby you can plug in the numbers as they are firmed up and it will change the total values?

I'm surprised your designer didn't pick up on the attic trusses. That seems like a pretty obvious thing considering you have so much roofline and now dead space. Did you use their designer or find your own? I wonder how much more it would have been to have re-engineered the trusses to accommodate the attic room? I so wish we weren't constrained to a really tight budget!! I could get really creative! We already know that we need at least 5,000 sq. ft and that is going to have to be done efficiently. We really want 6 bedrooms as we have 6 kids. Although the twins can share a room.

Your floorplan didn't come through. Did you try to send that, also? I so agree about the large kitchen and laundry room. Those are the two places I spend my life! I have a decent-sized laundry room now, but it would look a whole lot bigger if I could keep up with the laundry that spills all over the floor.

You didn't mention if the banker referral was associated with IHE. Did you do a lot of talking to banks? I'm starting to think that most of them are all the same - just repackaged in different wrappings. We would love to stick with the bank that we have our mortgage through now, but they are requiring 20% down and we have to make the interest payments throughout the draw process. Plus, you have to have a GC, and their criteria is pretty sticky.

Thanks,

mb


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By Lori in Reno, NV on 5/7/2007


Mary Beth,

Yes, IHE sent us the spreadsheet. Do you like it?

Just curious how you got all those numbers.

  • The material package price was priced by sf $46 and the upgrades added to that.
  • I got bids for the other items. I got bids based on an approximate sf size.

Is it a working spreadsheet whereby you can plug in the numbers as they are firmed up and it will change the total values? Yes

Did you use their designer or find your own? I am not sure IHE has designers; I do know they have their own plans. The designer we used a friend found online and we went with them because they are in Nevada.

I wonder how much more it would have been to have re-engineered the trusses to accommodate the attic room? I didn't bother to ask. It would have probably been affordable and I would have regretted it longer.

I so wish we weren't constrained to a really tight budget!! I understand the budget aspect.

I tried to attach the plan. I will do it again.

You didn't mention if the banker referral was associated with IHE. MidCountry is used by IHE, but we were free to use another bank. But as you have found out other banks aren't as O-B friendly. We didn't have to have a GC or any $ down. What we did have to do is write a letter explaining how we were going to build a house, (what jobs we would do and why we felt we could do them).

Did you do a lot of talking to banks? Only a couple, once I started to hear what you have heard and I stopped looking and went with MidCountry.

We would love to stick with the bank that we have our mortgage through now, but they are requiring 20% down and we have to make the interest payments throughout the draw process. Plus, you have to have a GC and their criteria is pretty sticky. I want to let you know, just because you use MidCountry for the construction loan doesn't mean you can't flip it into a mortgage with your own bank.

I'm starting to think that most of them are all the same - just repackaged in different wrappings. I don't think they are. It's what's inside the package that is important and it was all about the bottom line for us. We had trouble finding a local bank that allowed O-B. That is what sealed the deal with MidCountry.

Also, we didn't have perfect credit. We have never claimed bankruptcy or lost a car, we were just slow payers in our past. The building loan is in my husband's name only. I was going through my third company closure, didn't have a job and I had another 1 1/2 semesters left of college to get my Special Education Degree. So we weren't prime for banks. What we had going for us was we owned our land. Had no other bills but the mortgage on our present home, and it was only at 50% loan to value.

So I guess we're a good risk. Keep your chin up!!!! You can do it.

Lori


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By Jeb in Martinsburg, WV on 5/9/2007


Well, previously I had good things to say about MidCountry Bank. But let me give you the lowdown:

My project has been full of frustrations and I'm now three months past the maturity of my loan. So take what you want.

A few months ago I was submitting some of my last draws from MidCountry when the loan processor came back and said I didn't have enough money. Now, I keep duplicate records of everything and knew I had the money. Turns out their accounting never credited a check that was returned and unused. Even though they had received it via UPS and received a PDF of check with VOID written on it.

This was at the same time as I was trying to MOD the loan to extend it a few more months. In the promissory modification they had tacked on $35,000! They did eventually correct it.

Now, they did try and appease me by not charging me for $1,250 in fees for the loan extension. But really that was a small compromise considering they were keeping poor records and not communicating among themselves.

I will say that when I did look to them for closing my loan, all of a sudden they could only get a me a loan with a 10% interest rate. I went into this project with a credit score in the mid 700's; now I'm mid 600's because of all the overages and credit I have had to use. How very nice of them.

I got a nice loan from a local bank with a 7% rate, and they are using the equity in my home to pay off the excess.

But because I'm not staying with MidCountry Bank they are now charging me 1% of the loan amount as a fee!

In the end, it would have been far better for me to have just saved up money for a down payment and gone with a local bank from the beginning. I would not have been nickel and dimed in fees along the way.

Look at the whole picture. MidCountry and Landmark have very poorly (cheaply) designed websites. Really gives the impression of fly-by-night operations.

My advice is, plan. Don't expect things overnight, and research the reputations. Also learn how BBB.org works. The BBB is supported by the companies they report on. The only true information you can get from them is the number of complaints. The resolutions tell you nothing about how well the company responded.

Good luck. Read everything and take your time.


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