There are many factors that go into building a home, but consider all of the factors that the Appraiser will not, give you any extra credits for, as I told you about in part one. Cost Does Not Equal Value! One might argue that “I have twice as much concrete in my driveway, therefore, I should get credit for the difference as opposed to the comparable house the appraiser used”. An appraiser will not see it the same way. I want to share with you some secrets of the high volume builders that saves tremendous costs, without affecting the Appraised Value. Knowing these secrets will promote the balance of cost verses value and you’ll never shop for a home the same way!
Thinking like a tract home builder will save you thousands in your building experience. I am not saying to use lower quality materials or labor, I want to show you all of the little ways you can cut expenses to stay in or below your home building budget as you approach each phase of your construction. In some cases it may seem a minimal amount. A hundred dollars does not seem like a deal breaker, does it? However, if you do that 20-25 times throughout the construction process, well, just “do the math”.
In part one, I talked about how to save money in your driveway, your building set backs- where you place your house on the lot, closing fees, what type of loan you should inquire about to your lender for maximum savings, and where you can save the most amount on your floor plans or blueprints.
Brick on a home is very big here in Texas, however the choices are many. You can save a tremendous amount in this category alone. I believe there are five sizes to choose from, so, think like a builder. Typically, the smaller brick are more expensive per thousand, that is how they are sold, and because they are smaller it will take more brick, and use more sand and mortar. The brick layer will also charge by the thousands he lays. So, using the larger brick will be much cheaper in the materials and labor! The less quantity of brick, less sand and mortar, the less the brick layer charges on the lower brick count. For the whitest mortar, order white mortar, and mix it with white brick sand. Beware, the white brick sand will cost a great deal more and in some cities it is not allowed.It has a weaker bonding strength. However, we use it quite a bit, and have not had any major problems that I am aware of. FYI, if you use the white mortar with regular brick sand it tends to have a yellowish tint, but is much cheaper to use. Which brings up another point, when choosing your brick, ask the Brick Company where it is used on an existing you can see what it really looks like on a home. Pay very close attention to the color of the mortar as it will change the entire appearance of the brick. The cheapest route is regular mortar with the regular brick sand. Just be aware, colored mortar can change the entire color of the brick and have a totally different look.
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How would you like to significantly cut the cost of building your own home without cutting the value or the Appraised Value? Does the Appraiser give you all of the credits you deserve or actual costs that you add or build into your own home or does he see only the items necessary for the appraisal process?
As a builder of over 200 homes in Texas, we developed ways to cut the building costs and still maintain the appraised Value and the overall Quality of our construction. Some of these are secrets of the higher volume Tract Home Builders that I am going to share with you.
In the planning stages of your build job, consider these Savings that DO NOT affect your Appraisal or resale value and in the mean time greatly reduces your costs when you build your own home:
The Driveway for your home is one place to save. A front entry garage will use about half of the concrete and labor of a side entry or a rear entry garage opening.
Place your home as close to the front building lines as the city and your deed restrictions will allow. This will shorten your driveway, and again saves you concrete and labor. The width of the drive and sidewalks can also add or deduct from the cost. On a 2 car front entry garage the minimum width of the driveway should be no less than 16 feet. That is the size of most garage double doors. However, that is a very tight and narrow driveway. I prefer to spend a little more and make it a minimum of 18 feet wide so you can get in and out of your car without hitting the car next to yours.
When closing on the construction loan, consider the One Time Close. Ask your lender about this type of loan. This type of loan will save you from closing on two or three different loans, your lot, interim construction loan and your final or Permanent 15-30 Year Mortgage Loan. It is all wrapped into one loan.
Do not close on the lot separate from your interim construction loan. If you purchase the lot ahead of time you will have a closing, transferring title to your name,Title Policy, filing fees, and etc. Then, you’ll close on the interim construction loan, and finally the final 30 year mortgage. You do not need to have three different closings and the closing cost on each loan. A one time closing will save you tremendously. I recommend that when you write a contract on your desired lot, make the contract subject to obtaining your interim construction loan and to close within about 60 -90 days, allowing you time to get your plans and financial information together to get your loan approved.
You can either buy Stock plans, (plans already drawn and for sale) which is the cheapest way, or take your ideas or floor plan sketch to a Plans Designer to have your blueprints drawn as opposed to an Architect. They are about one third to one half of the price of an Architect, and they can draw your full set of plans for your new home needs. Out of 200 homes, I have worked with an Architect only once. It was a customer who already had his plan drawn by an Architect before he spoke to me. They are very good to have in difficult lot situations or the more difficult houses to build. However, they tend to load the house with lots of trendy, unnecessary structure supports and items costing you more throughout the building stages.
If these ideas are useful to you or if you have questions regarding the above please leave a comment and I will try to answer them in a separate article. Also keep checking back for part 2 of this article in a couple of days. As they say, Stay tuned, more to come! For more information and tips go to http://homebuildingtips.info
Doug Leavitt has been in the home building business since the early 80′s. He started with a Local High Volume Home Builder in the State of Texas. He began in sales but kept watching and learning as much as he could about construction and dealing with the subcontractors on a daily basis. After ten and a half years he began to build Custom homes for customers and friends and eventually built approximately 200 homes in his own building company. He seems to have a natural talent and skill to work with the customers and the contractors alike and answering their many questions as they came up. Doug is now retired and desires to help anyone who wants the challenge and the rewards to build their own home, through his websites.
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By Doug Leavitt
That is a Great question. It is a one that really requires many more questions behind it and should not be answered with a simple “unrealistic number.” Anyone quoting you a price per square foot without knowing some perimeters of the build job is simply just “Blowing Smoke”. They are just trying to get your attention with some low ball number, knowing they will be adding extras on the top. As a home builder of 200 + homes in Texas, I found it incredible when other builders would quote a price per foot. The lot, or building site, itself, raises many questions. Are there trees to be removed, how much lot grading, rocks on the lot, retaining walls, the levelness of the lot are just some of the unanswered questions.
Subdivisions,or building sites, require certain deed restrictions or covenants that may call out specific details of your building. Requirements such as roof pitch and roof materials, exterior cosmetics (brick, siding, stucco, rock or?), foundations, building set back lines (how far back from the street you must build-as this may increase the amount of concrete for your driveway, side walk etc,) sewer systems, water connections, utility service requirements, permits, impact fees, city requirements, floor plans (a square box is less to build than an elaborate roof system) how efficient your heat and air, (seer), how elaborate your electrical requirements are & the brands of fixtures and supplies, the amenities and the list goes on and on.
On the other hand if you are visiting a house or a model home and you ask the Sales Rep how much “this” new home cost per square foot to build, they can tell you because all the perimiters or questions have already been answered. You might ask about square footage price in this manner. But be sure to ask what the upgrades are and how much they cost. I hope this helps you to understand from a builders point of view that the question “How much is to build a home per square foot?” is a very “Loaded Question” could get you a very misleading reply. If you are a General Contractor, a Subcontractor or Construction Materials Supplier, check out top10contractorssubsandsuppliers.com and become a TOP 10 for your area!
I’ve been Volume Builder of over 200 homes in Texas. Currently coaching people to build their own home with my web site http://www.builderowner.net This is a work in progress but should be live in about 30-45 days. We have beta tested the program in it’s current form “Microsoft Excel Workbook” Please go check it out. I am also writing a blog at http://www.homebuildingtips.info. With this blog I want to help you save you thousands on building your own home and saving you not only Money but the Timely/Costly Mistakes I made as beginner. Tips, advice and suggestions from my own experience will enhance your building experience with better net results! I only wish that this would have been available when I started building 25 years ago.
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If You are building or plan to build your own home… You have to see these Home Building Tips!
How to $ave Thou$and$ of Dollar$ On Building Your own Home, Before You Ever $tart Building or Breaking Ground. . .
THE HOME BUILDING TIPS YOU “MUST READ”!
How can you save any money on building your own home before you ever break ground? How can you avoid the costly mistakes or surprises? As a retired Home Builder, I want to pass along several tips and recommendations you MUST Know. Even if you get a “GREAT DEAL” on the lot, there are many things to consider before you get started!
THE LOT:
Buy a flat lot! Some of the savings will be in the lot or land you intend to build your house on. The flatter the lot is, the cheaper it will be to build on. If you buy a sloping lot, your tractor operator will spend more time leveling and moving dirt, which will cost you more money in hourly fees. Their fees are one of the most expensive hourly fees you will pay a contractor. Additionally, depending on how much you have to cut to level the lot, it may become necessary to retain the soil at the top of the cut. A retaining wall! There again, it is very expensive to have to install a retaining wall, not to mention the many different types of wall to install. From expensive to VERY EXPENSIVE, it could be a deal breaker!
ROCKS
Know as much as you can about the lot and the soil conditions to build on. Go to your city or county extension office and request a soils map for your desired area. They will know, before hand, the “general” makeup of the soil conditions. That is not to say that you will not run into lots of rocks or, perhaps even a rock shelf. It is just a precaution and a general condition of the area soil. You will want to inquire at the same time to make sure it is not or never has been a land fill. They should have this information. In most cases landfills will not be stable to secure your foundation. However, a structural engineer could engineer a foundation for you to construct on most any soil, but again, there is a considerable fee to hire an engineer. They are good at what they do, but they tend to “overdo” what they deem as necessary for a secure foundation. They seem to add more steel, piers, and whatever they can add to protect themselves against liability. If you feel more comfortable hiring an engineer to draw your foundation plans, have the extra funds to spend, and want the liability of the foundation structure to fall on the engineer, it may be worth it to you. Also check with your neighbors and find out if they received a soils test for their lot. This information may help you decide to buy or cross this lot off the list before you spend any money researching.
(See “(PIERS)” below, about a soils test)
Trees
Although we love the look and feel of trees and the shade they provide, it is more expensive for the tractor operator to plow down trees. In the area where I live, tree trash and vegetation haul off is also very expensive. There aren’t many places for the operator to dump tree debris. Sure you hire someone to cut them up for future firewood (Consider the time too. Remember you are paying daily interest fees on the construction/ building loan.) but, there again, that expense for someone to cut up the trees and stack the firewood out of the way can be a hefty fee. One word of caution: If you decide to CUT down the trees yourself you may be doing yourself a disservice. “Cutting” the trees down, leaves the roots and the entire root system under the area on which your house may be built. Your tractor operator can not easily, knock down the trees if the stump is the only thing left. Leaving the tops of the trees, helps the operator use the weight of tops to knock them down with ease, in addition to getting rid of a major part of the root system, thus, saving you time and money with the tractor operator. I have experienced a number of occasions when our tractor operator has shown up on a job site only to find the owners had spent their entire weekend cutting the trees thinking they were helping. NOT GOOD! Save yourself the time, money and a tremendous headache and let the tractor operator do the work. After the trees are down, then you might want to cut them up for firewood, but only after the tractor operator has done his work.
Utilities
Bringing in all the utilities can be an added expense. Depending on if you are using overhead or underground electric, water, gas (natural or propane or?), cable, etc, this could be an enormous expense. You should request a meeting with a representative from each of the utility providers and know the expenses or estimates before you buy the lot. If you are building in the city, the electric service usually supplies the services to your building itself with no fees other than normal building fees and permits. Underground sewer lines or sewer taps, and water supply is usually NOT taken to the building. The City or coop water is usually responsible for the line up to the meter and you will be responsible from that point on. The water line and sewer line up to the house is usually is included in your plumbing fee. If you are building in the country and water services are not included, then you may need a water well. You should call a reputable well driller and get an estimate on how many feet they may have to drill or average drill depth for the area. (Check the website top10contractorssubsandsuppliers.com to if one is listed in your area). They usually charge by the foot in depth and can give a pretty good estimate on how many feet they will have to drill. (For example, if they drill 6000 feet and the charge is $1.00 per foot you would pay $6,000 for the drilling, in addition to the expense for the pump. (The size or horsepower on the pump will also be extra.) The example is not representative of any actual drilling fee, you should discuss a quote with two or three providers before choosing one.
PIERS
In some non stable soil conditions, you may have the need to stabilize your slab by having pier holes drilled into the ground and filled with concrete. A soils test from a geotechnical engineer may be required. A soils test is a process where as the engineer will come to the site where you intend to place your new home. In order to obtain average soil information, they will drill down several feet in 2-5 places and take samples to determine your particular soil conditions.
This test and their report will tell you:
1) What type of soil you have at certain intervals in depth.
2) What type of foundation is best suited for the type of soils.
3) Whether you should need piers and about an average depth of the piers.
4) Whether or not there is water seepage or underground water flow or water table under your soil.
5) What size and depth the piers need to be for a stable and secure foundation.
6) Whether you can get a solid base (like bedrock or Shale), or maybe you need to bell the bottom of the pier. (Bell- where the pier gets wider at the bottom and shaped like a “Bell”.) You can imagine that could be a good base for your foundation.
7) And more…
Will you always need a soils engineer on every site?
No, not necessarily. If other houses are built close to your site or in the general subdivision/area, ask your neighbor what type of foundation they used and if they obtained a soils test on their lot. You might ask if they used piers in their foundation so you can gage your decision based on their information. Go to several neighbors and ask the same things. Piers and soils testing can get very expensive. Know your facts and conditions about your lot before you purchase! You’ve probably heard, as I have, all your life “Location, location, location” In most instances that is true, however if you have to go overboard to secure your foundation, it may be in your best interest to find another location. As a Home Builder, I would say it’s “location, location, LOT CONDITIONS.”
YOUR BLUEPRINTS
There are several ways to save in this category. One is to go to a plans store or online plans outlet, and search their “Stock Plans” or their Plans already drawn section. These are plans that they have already drawn and available for sale as is. This way if you find a set of plans that you like or will work for you and:
1) You can get them in a hurry without having to get Custom Plans Drawn. Saving you a lot of time and frustration.
2) They are about ½ (or less) the price of “Custom Plans”
3) There is no confusion between you and the drawer.
Another Money Saving Tip will be to use a “Plans Designer” for your blueprints and not an architect. The “Plans Designers” Usually charge Much Less than an architect. I have seen less than one-half the price of an Architect. Out of over 200 homes that I have built in the past, I can think of only ONE home that had “Architectural Plans Drawn” These plans were drawn for the buyer long before I got involved with the Buyer. I used a “Plans Designer” exclusively throughout my building career. I was very happy with that arrangement and would recommend it for anyone. That is not to say that I wouldn’t use and architect in a situation where the building was challenging, or the house was multi level or there were special or difficult request from the buyer. There are instances where it is necessary to use the services of a professional Architect. But to save cost and still have a home design you love, a plans designer is more than sufficient. However, if you are currently working with an architect I would recommend that you continue working with him/her if you like their work or ideas. There is value in that too.
CONSTRUCTION LOANS AND CLOSING
There are a number of construction loan possibilities (aka Interim loans). (Not as many options in this economy.) However, I have found it economical to use what is called a “One Time Closing” A “One Time Closing” is when a Mortgage Lender will include the construction loan or make it a part of the final or permanent loan. (Your 15-30 Year mortgage). So, the construction loan, together with your mortgage loan, is generally closed or partially funded in the front end. Leaving a simple modification and finalization of the loan documents after the house is completed. Typically you have a certain amount of time to complete you construction and draw funds on the loan. When you are finished with the construction, you simply let the lender know. At this point, they will send an inspector (usually a home appraiser) to verify that the home is completed. The inspector/appraiser will verify completion and provide and updated/final appraisal. Next, the title company prepares a modification agreement and you will be notified to come in and sign. You may be required to pay a small modification fee as required by the lender. Once you’ve signed the modification documents, you may move into your new home!
For Clarification, your “One Time Closing” is just that! A “One Time Close”. That also means that your closing fees are also “One Time”. You do not have to pay for all the closing fees to close on the lot then the interim construction loan separate. It is all “One Closing” = “One Time Closing” FEES! You will not pay twice for the closing fees, title policy, survey, appraisals, etc! You pay only ONCE, saving you the majority of the cost of the second closing!
Remember each Mortgage Company has their own set rules or arrangement from a one-time-close loan, so be sure to ask your loan officer. Additionally, shop around for the best loan and rate for you and know that you may get a better rate over the life of the loan, but, it can make your upfront fees cost more. At this time, Mortgage Companies are hungry, so shop around and compare. Share the information you’ve received with different loan companies as they may be able to do even better. Also note, that if someone is quoting you a low rate, check their closing fees. A very low or non competitive rate could mean that they have higher closing fees. As with any major purchase…“BUYER, BEWARE!” So, get all the facts to compare.
I hope this little bit of tips and information helps you save a ton of money, time, and frustration in your building endeavor. The processes of building a home/house is in most cases just using logic. You know you can’t put sheetrock on before you install the electric in the walls or the insulation or you can’t install the roof until the decking is on. Logic, communication and scheduling the subcontractors is the key to a successful build job. Ask all and any of the questions you have. Most of the subcontractors will be glad to help. There will be more helpful tips coming to you in the near future. In the meantime, check out these helpful web pages builderowner.net , newconstructioncontracts.com , top10contractorssubsandsuppliers.com
Probuilder
Build Your Own Home – Considering Building Your Own Home? Build Your Own Home is the site for you, the Owner Builder! Strategies, resources, and hard earned lessons! To help You Build Your Own Home!
