HOW TO BRING DOWN THE PRICE OF YOUR NEW CONSTRUCTION HOME PART 1
YOUR LOT
The most important thing you can do before you buy a lot (other than getting pre-approved from a lender or knowing your cash budget) is to look at the lot with a builder. Here are some factors to consider:
THE HOA!!
This has the potential to be a big issue. Some HOAs require things that will blow up your budget and if you aren’t fully aware of the costs of those things, you could be in for a very unpleasant surprise. Examples of these are metal roofs, Hardie siding, 10’ ceilings on all floors, particular windows and doors, minimum of 2 or even 3 stories in certain areas of the neighborhood (usually close to the water). A good real estate broker should know these things but sometimes they don’t so it’s always good to double check with an experienced builder who has built several homes in that neighborhood.
WETLANDS
The first thing a builder will do is pull up the lot on a GIS map. He or she will be looking for wetlands first and then the flood zone second. Wetlands dictate how much of the lot is even buildable. In our area, that can be the first deal breaker.
FLOOD ZONE
The flood zone along with the city or county requirements will tell him/her how much your foundation will cost based on how high it has to be. If you are building on pilings, you may still need to build the lot up so your cars aren’t under water during a hurricane.
ELEVATION
Even if your lot isn’t in a flood zone, the elevation matters! Does it have a big hole in the middle of the lot that needs to be filled? Is it lower than the road? Is your lot lower than your neighbors? All of these factors can mean big money in fill.
PREPPING THE LOT
The prep cost of a lot can be a lot more than you think. A normal lot without any real issues can be $20,000 just to prep it! An experienced builder can give you a close idea so you can decide quickly if it’s a deal breaker for you.
If the lot is wooded, how much of it needs to be cleared? Just one acre of clearing can cost over $10,000. Again, it’s just math. Does it work in your situation?
Septic. Sometimes an experienced builder can tell you if you will need an overly expensive septic system (if one is even needed) without even applying for a septic permit simply by their experience from the neighborhood and/or area.
To apply for a septic permit, you will need to have the permission of the current landowner via signature. The permit does not have any bearing on any previous permits unless it is accepted. For example, if a 4 bedroom septic has already been approved but you would like to apply for 2 systems each for 2 bedrooms (for a duplex titled as townhomes), the former stands unless the latter is accepted by the landowner. There is no risk at all to the current landowner. They will usually allow this during due diligence. Sometimes land won’t perk at all, so if a landowner won’t sign off on a septic permit application, it may be best to walk away.
WATER
Water. Is it city water? What is the cost to connect? Do you have to drill a well? A lot of times those costs can’t be nailed down until after it is dug simply due to the fact they don’t know until they see how deep and what kind of pump system is needed.
ZONING
We had a wonderful couple come to us who wanted to build a huge shop with living quarters above it so they could live in that before they built their house. They couldn’t afford to keep the house they were currently in and build their next house so this was a great idea rather than selling and renting! Unfortunately, they had already purchased the lot. We emailed the county zoning official only to find out it wasn’t allowed. They had to build the house first.