Buying A Home
Dear Community,
Our tech team has launched updates to The Nest today. As a result of these updates, members of the Nest Community will need to change their password in order to continue participating in the community. In addition, The Nest community member's avatars will be replaced with generic default avatars. If you wish to revert to your original avatar, you will need to re-upload it via The Nest.
If you have questions about this, please email help@theknot.com.
Thank you.
Note: This only affects The Nest's community members and will not affect members on The Bump or The Knot.
Our tech team has launched updates to The Nest today. As a result of these updates, members of the Nest Community will need to change their password in order to continue participating in the community. In addition, The Nest community member's avatars will be replaced with generic default avatars. If you wish to revert to your original avatar, you will need to re-upload it via The Nest.
If you have questions about this, please email help@theknot.com.
Thank you.
Note: This only affects The Nest's community members and will not affect members on The Bump or The Knot.
Thinking of building.... any advice would be very much appreciated!!
My husband and I are in the early stages of buying a new home; we still have to sell ours and save the rest of the down payment, but our goal is to move this year. We've been going to open houses for the last few months just to get an idea of what area we want to be in and what we would like/dislike in a house and last week we found a neighborhood we really love. The house we went to was too small for what we're looking for but we found out there are a few lots left in the neighborhood. We never really thought about building before but are liking the idea more and more. We are meeting with the builder tomorrow just to start researching and learning more (as I said before we're not really at a place where we can move forward with anything) but I was wondering if anyone who has built has any advice or anything they would do differently? Also, how does the loan work? The price of the lot would be included in the purchase price of the house, but other than that I'm not really sure how it works. Any thoughts would be great!
Re: Thinking of building.... any advice would be very much appreciated!!
Is this neighborhood almost completed, or is it just beginning?
Three places to start:
1. The county or city's zoning maps. What are the long and short-term development plans for the land nearby?
2. The sex offender registry.
3. Google the builder's name and use the work "complaint" in the search. Yes, there are a lot of complainers out there, but you might also get some good info about the builder's reputation from others' comments.
If, you decide to build, be sure you get and pay for your own independent building inspection. See PPs from yesterday or today about this on BAH.
We built and closed on our house last June. It was a relatively easy process and to be honest, I don't know that I would change anything at this point.
As far as the loan goes, we went through our builder who has their own mortgage company. They offered the same products (convention, FHA, 15 vs 30 yr, etc) like any mortgage company would. We did not have a preapproval when we started the process. We were required to put a deposit down on the property which would be contingent on the preapproval and returned it for some reason our loan application was denied. I know some people go through their own bank or credit union so I have no experience with using an outside lender. It made it very easy to use our builder's lender because they were all communicating with one another.
One thing we found was that it was easy to add a lot onto the base price. The base price of our house was $240,000 which included the standard exterior (basic looking front of house and siding), carpeting throughout except linoleum in foyer, kitchen and bathrooms, basic lighting, an unfinished basement, and standard landscaping package.
We added alot of upgrades - changed the exterior of the house, brick front, put the garage in the back, hardwood throughout first floor except living room and family room, added 4 feet onto the living room, upgraded kitchen with huge gourmet island and better cabinets, added a morning room, finished the basement, put tile flooring in the bathrooms upstairs. We also put recessed lighting in the kitchen, dining room, morning room, master bedroom, and basement. We had additional smoke detectors installed along with carbon monoxide detectors, an upgraded security system, prewiring for surround sound in the basement, and prewiring to have the TV hang on the wall in the basement. It was also an additional cost to have the automatic garage door installed, put a drain in the garage floor, and put a flood light on the back of the house. Our lot had a $3000 premium.
Once it was all said and done, our upgrades added about $100,000 onto the base price of the house. One advice on the upgrades - if you have to pick and choose, upgrade structural things that would be impossible or difficult to do later.
It took about 6 months from walking in the door of our builder and requesting information to closing on the house. We had an awesome construction manager who would give us updates every Friday afternoon and responded quickly to each of our questions/concerns.
There seems to be a lot of negative feedback regarding our builder, but not in the area/state that we built in. We rented a townhouse that was built by the same builder prior to purchasing our own home so we were familiar with the workmanship and happy with it. Just remember that your builder is only as good as the contractors that they hire to do the work. Make sure that during the building process, you make frequent visits to the house to check on the work. We found a couple errors regarding our selection vs what they installed in the house that were easily fixed because we found it so early.
If you have any specific questions, let me know. It was such a fun process from seeing our dirt filled lot progress to a completed house...and it went by really quickly!
We did a 30 year FHA and were only required to to put down 3.5% per the term of the mortgage, which is what we did. The initial deposit was $10,000 to secure our lot which counted towards the 3.5%. It was competely refundable if we didn't qualify for the loan but if we decided to back out for no good reason, we would have lost that money.
We were required to pay the remaining portion prior to breaking ground which was a few months after we started the whole process (signed contract in December 2010, broke grown March 2011, closed June 2011). We rolled our closing costs into our loan and because we used our lender's mortgage, there were some incentives - they paid a portion of the closing costs and also gave us $13500 towards upgrades. I think once it was all said and done, we put a total of $13000 down out of pocket. We did not have to bring any cash to closing and actually received a refund of $500.
We're building, and ditto pp that upgrades can add up quickly! Our upgrades will be over $100k when all is said and done. That includes mostly structural things like adding a finished attic, attaching the garage, upgrading the basement ceiling height to 9 ft., and adding dual zone heating and AC (AC is not standard). We'll spend a little bit on things like upgrading items in the kitchen, but the structural issues are the bulk of the cost. Be sure that you understand what is an upgrade in the model home. At least in our case, the house without many of the upgrades in the model wouldn't even be recognizable. The model easily has $200k in upgrades.
Our builder required 5% down before they will even reserve the lot. That amount will be counted towards our down payment at closing. We're handling financing just as we would with any other home. We're preapproved for a certain amount. We can't lock the rate until 60 days from closing, so there is more uncertainty around the rate.
THIS.
I can't stress this enough. Unfortunately my PM and my CM were terrible at overseeing the build of my house and I feel like there were so many errors that had to be fixed. It's been a stressful and infuriating process. They broke ground in March and the home is JUST about done.
Ditto what others have said about bringing in your own inspector and also factoring the cost of upgrades. Structural upgrades add a lot to a home but are worth it to do in the beginning. Cosmetic stuff can often be added later and most builders charge a fortune for stuff like tile and granite upgrades.