Save Big Bucks on New Construction!Posted by Kevin Hughes on Thursday, February 28th, 2013 at 4:40pm.
Everybody is interested in saving money. If you're in the market to have your next or even your first home built, there are plenty of things you can do to control costs. Building a custom home is actually more affordable than many people think, and is in fact a good possibility when it comes down to the debate between resale or new construction. Home buyers will often simply compare resale homes to "spec" homes which are brand new homes already built and often ready to move into. Building a custom home can also be accomplished in an affordable way for the cost conscience home shopper who does a little research and preparation. Always start by consulting with experienced professionals regarding your housing objectives... input from builders, lenders and real estate agents can save you thousands of dollars if you round up good information before you get into the project.
There are some basic traditional things you can do to save money when building a home, and there are some more unconventional ways as well. We'll take a look at some of both.
The two primary ways to save money when building a new home are through labor and service costs and/or on material costs. Your success with any of these cost saving techniques is going to require good communication and cooperation with the builder/contractor overseeing your home building project. The builder will be scheduling a number of different processes and crews so timing on each phase of the construction project is critical. Work closely with your builder and make sure your role doesn't interfere with the builder's. If you are not careful, you will see your cost savings evaporate quickly with the increased costs associated with re-scheduling crews or construction delays which can be expensive as well.
1.) Source Your Own Materials
One effective way to save money is to source your own materials. If you can find some of your own items rather than having your contractor do it, you can often find less expensive options. Most contractors will work with you if you do want to source some things yourself, just make sure you discuss your plans in detail and the builder agrees before construction begins. As changes are considered later, the same coordination & communication needs to happen and written change orders are strongly suggested to avoid surprises.
2.) Find Reclaimed Materials
If you can find a good salvage yard, you can collect some pretty cool salvaged materials that will not only save you money, but set you apart from the crowd adding "character" to your home that isn't found in most "cookie cutter" homes. You might be surprised at what you can find, from old barn wood to used bricks to distinct wooden doors that add inexpensive charm to your home. If you can haul the stuff away yourself, you can oftentimes collect this stuff at low or no cost. Using salvage material is also the green thing to do!
3.) Communicate with Your Contractor
Always start by going over the project line by line with your contractor. Your contractor should be willing to meet with you and go over the construction schedule as well as discuss all of the costs involved. This is your chance to really save money. There are occasions when contractors will assume you want features that may not be important to you. Sometime you can identify elements of the project you can do yourself or have done at a later time when you have more money to spend. If you decide to do some "sweat equity" projects yourself to save on labor costs- make sure you are in frequent contact with your contractor. By doing so- you can avoid miscommunications on those items you are responsible for, and their impact on the timing for each phase of the construction project.
4.) Get Second And Third Quotes For The Project
One good rule of thumb when it comes to building or renovating your home is to obtain at least three quotes for the job. If you want an even better idea of the price ranges for the costlier materials or services out there, and can spare the time, you may want to consider getting more than 3 quotes. If you're too eager or in a rush to get started, it can be tempting to go with the first estimate you get... but that can be an expensive mistake.
5.) Try Green Or Reusable Resources
Go green. The green movement is everywhere, and it especially applies to your home. Efficiency not only comes into play with the materials used to build your home, but with the space inside that you and your family are going to occupy. Energy efficient items like double-pane glass windows (or triple) or greater R-value insulation can go a long way toward saving money in the long run. According to Energy Star ratings- if you outfit your home with energy efficient appliances, you can save more than $100 per year in energy costs. Even simple eco-friendly choices like low-flow shower heads and low-flow toilets can help you reduce your utility bills.
6.) Consider Smaller Lots
Another option that might be on the unconventional side is to go in on a large lot with a friend or family member and split it into two smaller lots. Today's housing trends are leaning toward smaller lot sizes, so you'll be able to get in on a great site without compromising your resale value when its time to sell. The challenge here is in finding a seller who is willing to break up a large parcel that also meets zoning requirements after doing so. If you can pull it off, it can be a great way to nab a nice building site for a price you can smile at.
7.) Choose the Right Floor Plan
Keep in mind that with each square foot you add to the size of your home, your on-going maintenance and utility costs will rise incrementally. Think about your home's size and ask yourself how much space you really need. If a smaller square footage floor plan fits your home requirements there will be associated cost savings in all arenas of the home building project.
8.) Minimize Garage Size & Amenities
Focus on your home not the garage... You and your family are more important than the cars. You can save a lot of money by avoiding excess garage space & garage finishes, shelving units and other garage amenities. Many garages are rarely visited and often become glorified storage space for unwanted household items.
9.) Look Into Unfinished Houses
We could easily devote an entire article to buying an unfinished home, but for now we'll just mention it as a possible consideration. Buying an unfinished home is an alternative way to save a lot of money and still get brand new construction. Unfinished starter homes can leave a lot of work yet to be completed- so it's important to make sure you have the cash reserves to wrap up the project. Additionally, unfinished home mortgages are often impossible to get unless you have a very large down payment. So, while buying this type of property can be an excellent way to get into the housing market- there are many hoops to jump through. You probably shouldn't take this path unless you have construction experience & financing capability.
Regardless of whether you're renovating a single bedroom or building a new home from the ground up, the most important detail when it comes to saving money is to watch your costs each and every step of the way. Its easy to carried away with all the bells and whistles possible in new construction homes but they all come with a price tag attached. Before you commit to any upgrade get an itemized break down of the associated cost in writing and verify that it makes sense for your budget. Get good advice, do our homework, pick the right builder and maintain your objectivity through-out the new construction process and you will be rewarded with your perfect home at the right price.
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