Uncategorized January 14, 2015

To Buy or To Build; That is the Question

Our Straw Bale Cottage

To Buy or Build; That is the Question

by Shellie Moore, EcoBroker, CRS with Windermere Real Estate South Whidbey

I often have clients who start looking for a special kind of home, and when they don’t find what they are looking for, start considering the option of buying vacant land and building. Another scenario is a skilled, energetic  person or couple who wants to build some sweat equity by building their own home.  Both are good options for some people but I thought I’d outline a few pros and cons (as Jimmy Fallon would say).

On a personal note, my husband and I have designed and built two homes from scratch and have benefitted from the process in many ways. On the other hand, there were some drawbacks we have to admit to when honestly looking at it. If I hadn’t have been so hell bent on DIY (do it yourself) I might have ended up with some standard features most designs have like adequate storage and room to slide a washer and dryer in without having to remove the trim from the hall way.  Building unique homes ( a log home and a Straw bale home) was cool and fits us well, however, we realize if we ever have to sell we will have some hurdles because of our owner builder style.  We were however able to build with very little debt and a lot of fulfillment. 

Let’s look at some general Pros: Building from scratch does allow you to perhaps get closer to what you want as far as style and floor plan, if you can afford your taste.  When we were building it was nigh impossible to find a 4 bedroom floor plan within 1500 sq ft, but designing and building our own home, we were able to get the rooms we wanted without going over budget.  Other considerations that may be hard to find already built are layouts that allow for graceful aging in place, with Masters on the Main, ADD friendly and wheel chair accessible. This hit home for me this fall when I was wheel chair bound for 3 months with a broken leg and found myself unable to access a bathroom or my bedroom.

Finding the green features one wants in an affordable ready built home can be difficult as well. In our area, though we have some builders that are very conscientious, not many jump through the hoops to build a Built Green Home.  The Highlands is a major exception;  thank you Langley Builders. Building can allow you to choose finishes and ventilation to improve Indoor Air Quality (especially important for the chemically sensitive and those with allergies.) Features like solar orientation, sustainable building materials, and energy efficiency are often neglected even by today’s builders, let alone those in the 70’s. If environmental concerns are paramount for you, DIY may be your way to go.

If one has skills, they can save some money by doing some of the work themselves. For some, this is a creative process they really love- even a rite of passage. For my husband, I always equate building our log home for him with having natural childbirth for me- a very challenging but satisfying experience.  Some couples thrive through the give and take of hearing each other’s ideas and working out a mutually acceptable plan.  Working together on a common goal- especially one so close to our hearts as a home- can be relationship strengthening.  Watching each other’s gifts bloom can build mutual respect and watching your own can build self-esteem and satisfaction.

Sometimes building is the best option when you have found an ideal location, like on a lakefront property or a place with an awesome view- but there are no homes for sale in that area.  If the cost of the vacant land pencils out when you add the cost of development and building to fit your budget for a finished product, you have found the sweet spot. 

Let me move on to the Cons now. Remember that thing before about relationship strengthening? Not so much for all couples. I don’t know the statistics for divorce in the building process, but I imagine it takes a toll on many. A few years after my husband and I built our second home we were simultaneously telling the story to a friend; suddenly I realized we were telling two separate stories. His about what a nightmare it had been, me about what fun it had been working together as a family.  Oh well, at least we made it through.  Remember that thing about the Creative process?  For some, nit-picking their way through a thousand decisions about everything from central to zonal heating, crawl space to slab to basement, solid core or hollow doors, a dozen countertops materials and after that a hundred colors or patterns, etc. is just plain exhausting and aggravating for some people.  Now one can delegate a ton of that to an architect, contractor and a designer, but you do have to give some input which requires time, energy, money calculating, communication and likely compromise, not to mention added cost.

One issue many folks encounter who would like to build is that the money needed upfront is more than may be needed to finance a home.  On Whidbey Island, and other rural areas, many folks can get a zero down USDA loan.  To get a loan to purchase the land and build the home, one will need 20% down payment reflecting the value of the vacant land and the finished home.  Owner builders that are going to get a construction loan still need to get bids from contractors for all the line items for the project, even if they will be doing the work themselves.

Another financial consideration is that one can nearly always get a ready built home for a lower cost per square foot than to have a similar one built.  To hire a contractor one could expect to pay somewhere between $100 to $200 a sq ft and up from there for a luxury home.  There are often bargain priced homes on the market due to the Seller’s circumstances and other factors that are hard to beat if dollars is the deciding factor.  Things like wonderful mature landscaping that would take years and thousands of dollars to achieve on a blank slate piece of land can be just “thrown in” with an older home, as appraisers can’t assign much value for them. 

A home that has stood the test of time can eliminate certain surprises (like a wet crawl space) if you are lucky. On the other hand, you may inherit certain long standing issues like mold in the heating ducts if you aren’t lucky or thorough in your due diligence and inspections.

One final consideration is TIME.  It could take a year to purchase land, put in a road, clear a site, drill a well, bring in utilities, get a permit and install a septic system, find an architect or a design, get bids, hire a contractor or sub-contractors if you will be the general, and then to actually build and landscape.  And where will you live in the meantime.  All workable, but this will not meet everyone’s timetable.

Well, this is just an intro to get you started in the decision making process.  If you are thinking about building (or buying) please contact me.  I can help you find your land, get a construction loan, connect you with contractors, resources and referrals.  I am happy to be at your service and on your side with all things concerning South Whidbey Island Real Estate.