Posted By Don1975 on 03 Sep 2010 04:09 PM
Long time lurker first time poster.

I am\was interested in building a house on a piece of property that was given to me. It has a good well, electric and gas, but needs a new septic tank installed. I would also like to do it as energy efficient as possible using or a combination of 2x6s with foam, SIPs, and ICF (I like but way to expensive) but the current costs I am getting are around 130-180+ per sq ft. for a finished house.

Lets take the middle 155 per sq ft and put it to a 2000sq ft house and we are talking $310,000! That is considering I already have plans (which I don't) and thats not including the new septic, landscaping, driveway, ect...

Now if I look at new construction or existing (2000sq ft) I can get so much more house including property, septic, well, non finished basement, garage, for 80-150 per sq ft. And some of the properties are on or next to water or have 5+ acres most have granite counter tops, wood floors and other expensive features.

While I know that building a house will let me make it more efficient it only saves me money on my heating and cooling. But will end up costing me more money.

Lets say having my house built with everything else that is needed costs an extra 50,000 which is on the extreme low side. A 30 yr mortgage at 5% add the extra 50,000 and with my bad math will cost me $46,000 in interest. So it comes out to $96,000 extra in the very best of cases to build on my lot.

Am I missing something here, does this seem right? I do like the property that I have but I am far from rich, so if my math is correct I can't see any reason in the world to build which sucks.

I would appreciate any input, experience, corrections to my figures, or other advice you may have.

Thanks in advance,

Don

To echo what others are saying, home prices are down right now, so it's going to be cheaper up front to buy vs. build.  That said, your "per square foot" numbers seem way off to me.  First, 130-180/ft is a HUGE range. 

We just got into our house that we built going on 3 months ago.  We built a 2000 sq ft ranch - 2x6 construction, flash & batt (1" spray foam + R19 batts in the cavities) plus 1" foam board "outsulation", spray foamed sills, top plates, recessed cans, etc. - basically completely air-sealed. 97% efficient modulating furnace, studs were all caulked, foamed around windows....you get the idea.  We have a ton of windows in our house, site finished hardwood everywhere except the bedrooms, painted trim through the entire house, porcelain tile, nice 3 panel doors..  Long story short, we built a nice house - extremely energy efficient.  We were at about $115/ft (not including the land).  We also had significant expenses in the foundation because of the lot - it's very steep & had previously been filled so we needed 8 ft deep footings, & then 3 feet of gravel base below the basement floor.  Our house on a different lot would have been around $105/ft.   The ONLY thing we didn't do that we kind of wanted was granite/quartz counters in the kitchen.  I can't imagine what it would take to get up to $180/ft, to be honest.

That said, building right now can be a challenge.  The main criteria used in bank appraisals is comparable sales.  If existing homes are selling for 10-20% less than they were a few years ago, but you're only able to build for 5% less than it cost a few years ago, you're going to have a gap.   That's going to have to be made up somewhere - down payment or equity (you said you already own the land outright, so you may be in good shape there..)

Another thing to think about, (probably the most important in my mind) is how long you plan to live in this house.  Looking at the numbers, what you save in utilities over the next 30 years vs upfront cost, is valid - IF you plan to be in the house for the next 30 years.    Most people don't do that.  If you think you're going to be moving/selling in the next 5-10 years, then I'd definitely say that you're better off buying, in this market..

Jerkylips
to reiterate: did you contract the house yourself? Did you supply your own labor or hire others?

Posted By Bob I on 08 Sep 2010 11:06 AM
Jerkylips
to reiterate: did you contract the house yourself? Did you supply your own labor or hire others?

nope, we hired a builder.  When we first started meeting with him, he took us through a few of his recent homes & showed us the numbers.  They were in the neighborhood of $94-$97/ft.  We knew that our upgrades were going to increase that & were expecting to be around $105-$107/foot.  Once they started digging & realized the situation with the lot, it went up.  That was really the only surprise, though.

I didn't supply anything except the checks..  ;)  I will say this, though - I did TONS of research before starting (a lot of it on this board) and was able to speak intelligently about the process with him.  Using exterior foam was something he hadn't done, so when he got the first bid, it was for structural insulated sheathing, which was extremely expensive.  We worked through it & went with 1" xps instead, which kept costs down.  I was able to work with the heating contractor directly to make sure our system was right-sized & not oversized (I still think it's oversized, but it's the smallest unit that company makes).  Stuff like that helped a lot. 

One thing I'll say that I learned through this process.  I used to have a lot of sympathy for people who got "duped" by bad builders.  I really don't feel that way anymore.  I'm not in ANY way saying that we had a bad builder.  It's actually a guy I've known for years, & trust.  That said, I knew it was my responsibility to know what I was talking about instead of blindly agreeing.  I did a huge amount of research, learned a ton, & feel that we have a great house because of it.  Anyone can do what I did, as far as researching on the internet, asking questions, reading, etc.  Those who don't are really puttig themselves in a bad place.

Jerkylips, where are you located ? Does your house have a basement ? What did you use for the exterior finish for the house...siding or stone/stucco ?
I'm assuming you acted as the general contractor, or did you hire someone ?

I'm planning a house in Ottawa/Ontario/Canada, and the builder is telling me that he thinks the price will be $225-245/sq-ft + his commission of 20% + cost of the land. Sounds completely crazy to me.
Does anyone else have any cost information for Ontario/Canada ?

Here's what we're looking at for $225-245/sq-ft:
3300 sq-ft two-storey house with unfinished basement (not counted in sq-ft) and triple garage (not counted in sq-ft).
Exterior finish to be mostly EIFS with some thin natural stone veneer.
Use of 2" XPS outside over plywood sheating.
Extra foot for foundation walls to allow future finished basement with 8' ceiling (8' 10" foundation walls instead of 7' 10")
Spray foam insulation for all interior above grade walls (basement interior walls insulated with 2" XPS, and 2" XPS on exterior foundation walls below grade)

The OP indicated $130-180/sq-ft, with $155/sq-ft as a reasonable target. I'll take that any day over $225-245/sq-ft.
Are all of these prices assuming that you are acting as the general contractor/builder and hiring trades directly, or does it include fees for a general contractor to oversee the construction ?

Posted By methier on 08 Sep 2010 11:25 AM
Jerkylips, where are you located ? Does your house have a basement ? What did you use for the exterior finish for the house...siding or stone/stucco ?
I'm assuming you acted as the general contractor, or did you hire someone ?

I'm planning a house in Ottawa/Ontario/Canada, and the builder is telling me that he thinks the price will be $225-245/sq-ft + his commission of 20% + cost of the land. Sounds completely crazy to me.
Does anyone else have any cost information for Ontario/Canada ?

Here's what we're looking at for $225-245/sq-ft:
3300 sq-ft two-storey house with unfinished basement (not counted in sq-ft) and triple garage (not counted in sq-ft).
Exterior finish to be mostly EIFS with some thin natural stone veneer.
Use of 2" XPS outside over plywood sheating.
Extra foot for foundation walls to allow future finished basement with 8' ceiling (8' 10" foundation walls instead of 7' 10")
Spray foam insulation for all interior above grade walls (basement interior walls insulated with 2" XPS, and 2" XPS on exterior foundation walls below grade)

The OP indicated $130-180/sq-ft, with $155/sq-ft as a reasonable target. I'll take that any day over $225-245/sq-ft.
Are all of these prices assuming that you are acting as the general contractor/builder and hiring trades directly, or does it include fees for a general contractor to oversee the construction ?

We are located in Green Bay, WI.  The house has a full, walk out basement.  It's a pretty steeply sloped lot, so the entire back wall of the basement is framed, rather than poured.  The builder we hired was the general contractor - he did everything.  THe exterior is a combination of vinyl shakes, double-5 vinyl lap, and natural veneer stone.  We did a craftsman style, so we have some of those decorative braces & stuff, too.

Our house is 2000 sq foot ranch, not including the basement (ours is also not finished).  We put in stairs from the garage to the basement (another "upgrade") & have a nice-sized 3 stall garage - just under 1000 sq ft in the garage.  Our ceilings are 9 feet in the bedrooms, 10 feet in the kitchen, vaulted in the great room & master bedroom.

I'm confused by your statement about insulation - you said spray foam for above grade interior walls.  I assume you meant exterior?  If you read through these boards you'll see all sorts of different combinations of materials for insulation.  I don't know that 6" of spray foam is going to be the most cost-effective.  If you're going that route, you may as well use SIPs.  Our "system" consisted of 1" of foam to air seal everything, then the remainder was fiberglass batt.  If I had it to do again I'd consider dense pack cellulose instead, but our builder talked us out of it, and at the time we were on too tight of a deadline to delay things.  We also did the 1" of foam on the exterior to act as a thermal break.  I would absolutely do this - again, if I had it to do all over again, I may have gone w/2".  If you're not familiar, do some research on thermal short circuits & you'll see why this is probably THE most important step (well, maybe #2 to air sealing...)

Posted By Don1975 on 04 Sep 2010 10:00 PM
Jelly, I wish you good luck and hope everything turns out for you.



Bob I, while I agree it would be great to have a 21st century home considering new technology and the cost of ownership. How many years would it take for the payoff to show up, especially when you are talking $100,000+.



Galnar, Sounds like you are building a heck of a house and I sure hope it works out for you 10 years from now.



Slenzen, thanks for the link I have not seen this one yet but it looks like a great site.



Cmkavala, I did not even know that an “energy mortgage” exists and seems like a great program. I think that investing in energy efficient homes (or anything) is essential for our and our kid’s future. I would LOVE to build a house like Galnar running ICF from basement to roof. But to do that would cost, over an existing house, well over $100,000. Now I already have property that was given to me for free, so let’s add the cost of land, water, gas, sewage, and architect. Ouch.



So back to the point of my post:
If you are building a house unless you are super rich, or are able to do the majority of the work yourself an energy efficient house will cost you SO much more money than it will ever be able to pay you back.

Where did you get these numbers????? Are you subtracting the lumber that you won't need?....the insulation you won't need except for ceiling?.....the lower tonnage of HVAC needed?.......the lower per s/f of framing charged?.....etc? 

Wow, some of these numbers everyone is tossing around are pretty shocking. 20% commission?!?! I would LOVE to charge that much. I'd only have to build 2 homes a year! Seriously folks, keep looking around for builders. There are some of us out there that don't have such massive overhead or high commission fees. I would look for a smaller custom builder that maybe doesn't have a showroom, model homes, etc... but has been around long enough to have built a good reputation.

To echo what Chris said earlier, we generally see most of our homes around $90/sqft (near Cleveland, OH). For a ranch, you're generally looking at $100/sqft baseline. Unless your roofline has some crazy peaks and angles, all stone exterior, etc... then I don't see why your cost is so high. Obviously, depending on how extreme you go with 'green,' your cost could go up, but every dollar over $100/sqft should be a cost you can control depending on what green tech you decide to use.

I started building my energy efficient house just over 2 years ago on land that I purchased a year before that. The housing downturn had already begun, but I had no idea it would descend to the depths that it has. Had I known what was to come, I'd have held off purchasing the land because I could have bought it at a 40% discount in 2009. If I had to sell my house today, I'd probably break even, but only because it's located in a fairly desirable neighborhood. Fourteen homes have been built in my immediate neighborhood this past year. That's not a lot, but huge compared to other areas in northeastern Illinois. I've wondered myself why homes are being built at all given the glut of unsold and foreclosed properties around Chicago? The fact is they are being built. I think that the perceived value of a house is more than just the cost per sq. ft to build or buy. People will pay more for a house if it's in the right neighborhood, if it's a good fit for their life style, if it promises lower maintenance and long term ownership costs, if it is up-to-date in terms of new technologies, etc. Many of the homes going up around me are smaller (2000+ sf.) one-story homes amongst predominately two story, 3000+ sq ft homes. Many people who are retiring want to down-size but can't find many acceptable, updated, smaller homes on the market. Smaller homes are actually selling well here and holding their value better than larger homes. So building a custom home, even at a premium price, is completely within reason for many buyers. It all depends on your personal needs, wants and circumstances.

Yes.....and no. The building market, when left alone is driven by supply and demand, and therefor is not too expensive, it is more like "it is what it is".

But what gets me, now that I am building my first new home for myself, is the fees (taxes). My building permit was $6,000 based on a build cost of $43x,xxx. Even though my build cost is less than half that. I designed my place to be maximum sf per $1 with no fancy finishes.

My building official is an independent company, luckily and he said that normally they charge the city less than half the fee for their work, that means the city makes a profit of around 50% on most new construction, but on mine it will likely be 75% profit for them. Then there is other fees/taxes for septic, electrical, plumbing and HVAC. Then there is the other expenses the municipality forces upon us that are often not necessary, such as, but not limited to, two as-built surveys, signage and silt fences.

And then I still can't build the house I want; I can't use the doors and windows I want because they aren't "u-rated" and therefore don't meet the new energy code. And forget about using used windows and doors. I can't use some building components that I want because they don't have, ASTM, ICC, IRC blah blah blah testing.

I had to pay $13,000 in permits (including sewer and water hookup) to build my 2100 sf. ranch home. Depending on size, various permit fees can total as much as $15,000 in my town. What's charged has mainly to do with the cost to build new schools and other public facilities which are impacted by new construction. But, you can't win. This summer, our water rates were raised because there has not been enough new construction income to pay off the bonds issued for our existing sewer and water infrastructure.

One pleasant surprise, though. My homeowner's insurance premium was much less than I expected to pay. When I asked my agent why, he said it was discounted for new construction. I guess with the many new building codes and standards in force, homes are less at risk of fire and storm damage.

Some towns in NH charge up to $15,000 for building permits; others $150. Depends somewhat on local politics, plus this:

I've worked for soomeone who is involved in setting future energy regulations in the state. The absolute shoddy workmanship we have seen on his home - by various contractors - have convinced him of the need for additional teeth and verification in the regulations which will add to the cost of building. Self regulation from the state homebuilder's accociation would help if they were interested; they are not.

One example: we contracted to install foundation drains and discovered they were installed when the house was built - almost correctly - until they were backfilled with large stones which crushed the pipe. The main problem was that they only put in 12' of drains, probably until the inspector or owner left, then backfilled with nothing but the large stones & clay. This will continue until either there are sufficient regulatuons with third party inspections ($$$) or until the low bidder mentality ends or until building becomes professionalized with self regulation and the determination to enforce it.

Just random thoughts here, but other things to consider are homeowners insurance. The customers that use ICF have reported back a reduction in homeowners insurance cost. Reduced tonnage on HVAC can also produce savings due to the superior insulation factors of ICF. Then there is maintenance costs which are typically less. Plus your mortgage is a tax write off, higher energy bills are not. ICF almost always appraises for more right out of the gate as well. Tax deductions as previously mentioned for using ICF/SIPS, etc can help, etc, etc. I'm not saying that this can bridge the gap between new and used homes, but it can reduce the amount.

If this was my "dream" home or the last home I'm going to live in, I'd pass on the fancy fixtures and other house "bling" and get the structure solid. If I had to hold off on finishing the basement or something like that, then so be it. That's just my 2 cents. Good luck with whatever you decide.

check this article, it will help you to your problem.

http://ezinearticles.com/?Remove-Black-Mold-From-Your-Bathroom-Walls&id=849409