Profile picture for JabHerJaws

Building vs Buying in NC

Realizing home prices are plummeting, what about building? We own land free and clear, have plans in hand, live in triad area of NC. Looked @ a few places, but still love our plans. Better to go ahead and build on what we own or keep looking for something already on the market?
  • February 09 2011 - Winston-Salem
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Answers (5)

Profile picture for natewolf
I say build. You will get what you want. Builders want the work. Just make sure you find one that will complete the job and not go out of business.
  • February 15 2011
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During the boom, I funded well over a quarter billion in construction to permanent loans.  (yes billion with a "B").  Before closing on every one we went through the same scenario. 

Cost breakdown on one side vs finished appraised value on the other.  Your cost breakdown should include:
Hard cost & soft cost  ("cost not to exceed" contract), cost of land, interest reserve, contingency, permits, and insurance + taxes through the const. period.  If there was not a 10% profit in the project, I advised my clients to sell the land and just buy from standing inventory. 

Building a house is hard work and if you get half way through and realize it is not a "good project" from a developer stand point you will most likely learn to resent your dream home. 

Yes! I am the finance guy.  Sometimes the right thing to do is tell someone "not to get a loan"
  • February 11 2011
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Profile picture for Sharon Lewis

There have been a lot of articles about North Carolina and most of them suggest that  in areas like here in the Triangle and in the Triad home prices will be and are the first to recover in the country. We are seeing a stronger market in areas in Raleigh,Chapel Hill and Cary.

If you are adding on, make sure you don't overvalue your home. What a great 'problem' to have!
Good luck and if you do build on, lets see pictures before and after!

  • February 11 2011
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Building your own home enables you to have your "dream" design and that is very exciting.  Don't be surprised when your dream keeps changing....  When you build, these changes may cost money and will add to the contract price.  A minor detail can be costly if you wait too far into the project.

Before you decide to build, do research on the area where your property is located if you have had it for awhile.  Find out what the values have done, If it is in a subdivision, has it changed.  Are there any major changes that will happen within a mile of the property that could affect its value.  Check the status of the adjoining properties.  Are they on the market....a short sale or foreclosure?   Some subdivisions do not allow signs in the yard, so check to see if the property is on the market.  This may have an impact on your decision. 

Whichever way you decide to go, enjoy the journey. 
  • February 09 2011
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You can't quite build for what you can buy in our market right now but it comes down to a preference thing really.  The satisfaction of building your own home can be a personal triumph for the ages.

Construction loans are tougher to obtain but if you are well capitalized, you can do it.  Last time I checked you would require 25% down and 6 months reserves but rates were a little higher for construction loans than for previously occupied homes.

Does your builder offer financing terms?  Otherwise, I'd recommend some of the smaller banks or portfolio lenders in your area.

Good Luck. 
  • February 09 2011
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