Building a House or Buying New (Teton, Hope: real estate market, to rent, loan)

[oakread2]

We've been looking at the real estate market and have pretty much decided that we'll either need to build our own house or buy new. Everything we've seen has changes we would want to do that would push us over budget.

How is the building process there? Is it super expensive or could we do a 3/2 at least 1500 sf house for under 200k?

Alternatively, are there any new subdivisions that we could look floorplans at online?

[oregonwoodsmoke]

Just the cost of the house, or do you want the house, land, and building permits to all come in under $200K?

[oakread2]

We could possibly buy the land before we move, so the 200k would be for house and building permits.

[IdahoBroker]

What did you finally opt to do? Would appreciate an update.

[oakread2]

IdahoBroker, we haven't decided yet. We're visiting this spring and moving in the summer. Still have to get jobs there as well.

[Clark Fork Fantast]

Originally Posted by oakread2

We could possibly buy the land before we move, so the 200k would be for house and building permits.

You also need to include septic and a well, and power to the house, if those facilities are not already available, and a well alone can cost you 20K or more. We opted for buying land first and then build as we could afford it (in North Idaho), and we still think it was a good solution, but it has forced us to be off-grid, with no well, until we can afford those little items of luxury!

[IdahoBroker]

Typically, even though it is legal for people to build their own home in Idaho without a contractors license, it typically can cost more than having a builder do it for you due to the economies of scale. For example, a larger volume builder will have more purchasing power and buy materials at a better rate. Even though they they mark these materials up to build for you, the savings get factored in.

One example is on the floor plan and designs. I production builder will have stock plans that you can approve and apply for a building permit almost immediately. Otherwise, you would have to find an architect/designer to work with and spend lots of time and money figuring out the design before you can even determine the price.

Another factor is scheduling. Most of Idaho is growing like crazy so good quality subcontractors are already working full speed. That leaves new, less experienced (or more expensive) contractors available to work on one off projects like a single home for an unknown boss (you).

There are some companies that advertise you can save thousands by doing it yourself, but they typically don't factor in ANY value for your time and finance and carrying costs. They don't factor in that you would have to rent or buy all the appropriate tools.

Take a very serious look at your financing options. That can also make or break a project. For example, what if everything looks great and you start but then during the process interest rates jump . . . how would that impact you if you have to get a loan on the finished house?

Hope this helps.

[nm9stheham]

The above iis a good list of things to consider. But as a contractor, I respectfully cannot agree with all parts of the cost picture presented above.

Any materials savings may get factored in.... but in a demand market, sorry, it will tend to get factored into the profit side for the builder, not the savings side for the buyer. (It is simple in contractor-land... you ride the up-markets when you can, in anticipation just eeking out a living in the lean times sure to come later....) Lots/land, materials, and the cost-risks of materials, will get passed through by a builder to the buyer in a market like this; the volatility of lumber commodity pricing right now is going to end up with builders factoring in a near-worst case lumber price.

Stock house plans ready-to-go can be bought in a lot of places. (But more on this below when foundations and soils comes up.) Manufactured homes are cut and dried and only the foundation is variable. Local permitting can be a big variable; some areas require little, but some areas require a lot. (On the extreme high end, Teton County WY requires drawings signed off by an architect or engineer, AND a county review that typically runs $5,000 or more! On the other end, Custer County requires a hand sketch of the outside dimensions and footprint LOL)

As far as value for time, it depends on the individual's circumstances. Part of the point is to convert one's time to $$ by making self-building a part time job. For almost everyone in a fixed wage job, working a standard work week, this can become a good paying part-time job. The real value problem comes for those who are in a business, where you potentially CAN make more money by working your job/profession rather than building a home.

However, the realities of being a 'one-off' builder, and having less access to sub contractor resources is very true. And if you do not live locally, then the cost to rent in the meantime is real. You have to take your time and be ready to do a slow build in an high demand market like right now. That may or may not fit the individual's circumstances. But the idea of the builder's always having access to the best subs is not true... in high demand times, getting the present houses built NOW and getting to the next ones on the list is essential for any builder to make the most of this golden opportunity. As a result, sometimes any sort of sub will get employed, and build quality very often goes lower in high demand building booms, especially in large tract projects. Control of build quality is a factor that may accrue to the self-builder, if he/she knows what to look for (which indeed can be a big 'if').

Financing is properly brought up as another very real issue. It depends heavily on the individual's circumstances and resourcefulness.

One thing not brought out so far IIRC, is the soil and suitability for building. The first order of business is to examine the soil to make sure you do not have soil problems that will cause foundation problems. This ought to be done before the land is purchased, and may invoke a soils engineer to visit. If that is OK, then in a cold climate like ID, some knowledge of any required insulation of the foundation is important. And a foundation design suitable for the house is then needed. That is one thing not included in stock house plans. The individual builder likely will need help here, but not all builders are so-qualified either.

Having said all that, IMHO the biggest question mark is the individual. There are some folks suited for this, and many more who should never attempt it. Being a project manager of some type, dealing with a variety of people and work disciplines, is a good start to be ready to do this. Being hands-on and mechanically or electrically adept helps a lot too. But I never say 'never' anymore on things like this; some folks' ability to figure things out and learn and adapt is pretty amazing.

[CAHntr]

Excellent information. The wife and I have several years to go but can readily relate to the issues oakread2 raised and the information you provided. You would be a good resource for anybody considering building to consult before making that decision.

[banjomike]

If a buyer has the time and ability to hang sheetrock and do the painting and trim work, a lot of money can be saved in purchasing new construction.

As long as the work meets code, it can be done under the general contractor's license. Sometimes, the construction materials can also be purchased for less under the contractor's license as well; it is all in the contract agreement.

These days, when contractors are all busy, home buyer's do-it-yourself can also speed up the move into a newly-built home.

During the housing boom of the early 90s, I worked for a time as a sub-contract painter for home buyers who were doing their own interior finishing.

I also used a contractor to build a custom-designed shop building I finished on the inside myself. The shop cost just under half of the estimate when finished, and I did the work during the winter when my business was normally at its slowest period.

It's a lot of hard work, but it can save a lot of money, and new construction often runs over budget.