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April 5th, 2005.
Hi, Ailsa. I was browsing
your website, looks very interesting, love your house. We have found a 2 acre
lot we love with a beautiful view and as my husband is a framing contractor
and knows a lot of trades we would like to build our own home if we can swing
it. Our question now is can we find the financing to allow us to purchase the
land and build before selling our existing house which we have been in for almost
11 years. It is very exciting to think it could happen as I am ready for a change!
We are looking at a bungalow around 2000 square feet with w/o basement. Is your
home square footage all on the main floor or are you incorporating all finished
living space? How much per square foot did your home cost to build if you don't
mind me asking as that is what we are debating now. We are in Southern Ontario
so there is no way we will be purchasing your home although I would love to!
Anyway I realize you probably have hundreds of queries but some direction would be much appreciated.
Lost in dreaming!
Liz and Arduino
Hi, Liz & Arduino! (Cool name, Arduino, by the way!) First of all, congrats on making the big decision to Build Your Own House! You're gonna love the process, although you may or may not love each other during some parts of it, so make sure you both know that it can be a rough ride for certain parts, and that your Relationship will be fine when you're all done (!). That said, you're way ahead of the game because you already have a solid set of Skills that will be very useful during the Build and lots of good Contacts -- that'll really help.
That's a nice size you've chosen -- 2,000 square feet on the Upper Floor -- and our home is 2714 Up, and Fully Developed Down with a Walk-Out, so that's how we got to 5400 square feet. Oh, you didn't mention the size of Garage you want to build, but since you have a 2 Acre Lot to play with, it's a really good idea to build on a Triple Car Garage instead of the standard Double Car Garage. It always surprises us when we see a lovely home in the Country with Double Car Garage, since the costs involved in increasing the size of the Garage at the Building Stage are nominal compared to how functional it is to have a lot of Garage Space -- you'll need it for your Lawn Tractor! And Work Bench...
"Can we find the financing to allow us to purchase the land and build before selling our existing house which we have been in for almost 11 years." Hmmm. Well, that depends on a variety of things. First, how much Money do you think you will need, and how does that compare to how much you think you can borrow? Money is cheap, right now, so it's a good time to Borrow, the problem is getting a Bank to lend out that kind of coin. Since you've been in your Current Home for 11 years, you must have built up a fair bit of Equity, so that's good. You could borrow against that. That's better if you don't have any Mortgage on your current house, of course, because that will be a very Large Loan and you don't want to over-extend your self financially during the Build.
The easiest way to manage the financial end of building your own house is to sell the first house, make a deal with your Buyer to have an Extended Possession Date that would allow you to Build while you are still living in your Current Home. This sounds tricky, but it happened to us, so I know it's possible! Sometimes it's just a matter of asking your Buyer if an Extended Possession Period might work for them. And this is definitely a whole lot easier to negotiate when you are Selling Your Own House, since Realtors usually don't get involved in anything outside of the norm. (That's not a slight against Realtors -- we couldn't get along without them ... it's just a reality.) If you can't make a deal with the Buyer, just make a Plan to Rent for as many months as you will need to complete the Build. If you can score a Rental with no Lease Commitment, that would be the best thing, since your Build might go on for a bit longer than you ever would have imagined...!
I have a whole section on Builder's Loans, so pop in and read that. At least you'll be familiar with them. Basically, though, this Loan is divvied out in Three Sections, if you're lucky. We had a terrible time with this, and it was actually one of the worst parts of the Build, since we had an Appraiser who didn't know the first thing about Building ....(He demanded that I tell him whether the SubFloor was in when I called to let him know we had the Roof on...very annoying.) However, you are supposed to receive the money at the Subfloor Stage, At Lock-Up, and at Completion. ha,ha,ha,ha,ha! Good luck if that happens, although we've heard stories about it really working out that way... If you noticed, there, I didn't mention about the Land, and that's because you have to pay for the Land outright before you can even bother with a Builder's Loan. See why it's a good idea to Sell your Current Home, first??
Now, if you already have a big ton of money in your Bank Account and in your Home, you might consider getting a very large Line of Credit from your Bank. Think that's what we might try on our next build, since we have a lot of Equity this time around. I would do a fair bit of 'Money Shopping' before you make a commitment, to be sure you're getting a deal that will work well for you. And get everything in Writing about when you are supposed to Receive your money and How Much you are supposed to get.
"How much per square foot did your home cost to build if you don't mind me asking as that is what we are debating now." The current rate that Builder's are charging for an Acreage Home in Southern Alberta is about $165.00/sq.foot. That cost goes straight up from there if there is anything 'Designer' about the house, at all... you know how that is! If you have a penchant for Gold Sinks and Faucets, the cost will go waaaay up, but if you are going with a nice look but not insane, you will probably be able to build it yourself for about $120.00 - $140.00/square foot. Everything depends on the Finish. Where are you in Ontario? I grew up there, so I know the area quite well. There were so many beautiful Quarries where I grew up, that Stone was fairly inexpensive, compared to what Stone goes for out here in the West, so your costs will vary depending on how much the Materials are.
Also, if you are remote at all, you will probably have to pay more for Labor, and have a more difficult time finding people to do the work on a tight Time Frame. Make sure you get Three Quotes for Each Big Job, so you can choose wisely -- remember that the lowest price isn't alwys the best choice -- oddly enough, if a Quote seems too low, the Company might have 'Add-Ons' that they'll bill you for later, so watch out for that. I always ask for a Complete Quote, then compare what each Contractor considers 'Complete' to mean -- that can have a larger variable than you would ever guess, so you might be surprised at what you see or hear. Keep your mind and ears open to make sure you are all clear on what you want and what they are going to provide, and for how much.
Since you are a Framer, Arduino, you should be able to get Contractors and Builder's Prices when you are Building. Windows, Lumber, and almost everything else will be far less expensive if you can get those Prices. It's always worth asking. If you can't get those Prices, consider Hiring General Contractor who can access those special prices, and pay them a pre-arranged amount to get the Savings. That could easily save you well over $20,000., right off the bat.
Well, that was a long answer, wasn't it?? Ah, well. There's lots to know when you are about to Build, and the more info you can gather, the better off you'll be. Good luck with your Build! Let us know when you get things in line so all my Readers can follow along!
Take Care and Talk to you soon, Ailsa