The real estate market -- driven by buyers right now -- is the straw that stirs the soup when deciding to build your own home, just as it would be if you were thinking of buying a re-sale home or a production home from a big builder.
Why? Because (unless you're paying cash and money is no object) it doesn't matter how great your plans are or what luxury amenities you want to have in your home if you can't get financing.
It's not as easy to find lenders that will do lot loans, but you will still find some doing construction-to-permanent loans. U.S Bank, Chase and Wells Fargo are among the biggies, but each has different terms to offer. When dealing with these types of loans, be sure you ask if an appraisal is only done once, at the beginning of the process, or if they re-appraise towards the end (a crap shoot if values drop in your new neighborhood while your dream home is being built.)
It's actually an ideal time to build in terms of the cost. Drywall has dropped by 40%, lumber by at least 20%, land prices have fallen and labor is plentiful and inexpensive, since few in the trades are working full time right now.
But finding just the right home site and making sure all the building stars are aligned does not always a dream home make.
Once you've determined the cost of the land, prepping the lot (grading, utilities, etc.),the cost of a building permit, school fees and the house itself, you would be setting yourself up for a big fall if you didn't get a Realtor to give you a snapshot of current values in the neighborhood or area in which you wish to build. Unless a bank appraiser can justify your out-the-door investment in this dream home you've waited so long for, they will not be eager to finance the project. This means that all the blood, sweat and tears you've put into making this dream a reality might have to be put on an indefinite hold until the market changes.
Trina Bender, owner of a custom homebuilding operation in the Sacramento/Folsom, CA area, notes that it may actually be possible to build a custom home for the amount of money you might pay for a foreclosure if you do your homework. "We happen to have hundreds of pre-priced custom home plans that can serve this purpose. We can tailor these plans to fit the neighborhood in which you are purchasing land and still get a below-appraisal price achieved -- which, in turns, give you instant equity, not to mention a custom-designed home."
How can she do this? Unlike other Mom & Pop shops that work out of the backs of their Ford F-150s or home offices, her company , G.J. Gardner, is an internationally-known custom homebuilder with operations on four continents, offering her bulk buying power and state-of-the-art quick-quote tools to get the job done. Well-known, local homebuilders (like the Bender family) buy the Gardner franchises in order to have this kind of pricing power as well as control, offering homebuyers the option of building affordable custom homes for a more stress-free experience.
For more information about G.J. Gardner Homes or to see if a franchise exists in your area, go to www.gjgardnerhomes.com.
Dena Kouremetis is a veteran freelance real estate consumer journalist and California real estate broker. She may be reached by email at REritr@aol.com.
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