My dad is moving from Houston to the Austin area. We've been looking at homes west of Austin from the Dripping Springs to Spicewood area. Now we are starting to explore the idea of buying some land out there and building a house for him. Anyone here had any experience having a custom home built for them? Specifically, I'm curious about how long it might take and the cost of it. By cost I mean like did the builder go over budget or were they able to stick to their budget. I am going to continue to do more research and ask my real estate agent about it, but I figured I'd get some opinions here too.
time duration of build and cost obviously depend on how large and involved your plans are going to be (i'd say at least 1 year). prepare for something to always go wrong and cause delays on a regular basis. you'll need to get a good architect, all the surveying, all the building permits, and then contract the builder and possibly even others separately (ie landscape architects, etc). and it's going to go way over budget inevitably. any house, and especially one you develop from scratch is a straight up moneypit. you've got all the various finishes (like kitchen/bathrooms) to account for, interior designer, furnishing, artwork, gym equipment, security installations, wine cellar stock, etc, etc.....shht never ends :S
Thanks for the info. I figured it had the potential to be a money pit. My dad is gonna call some of the custom home builders in the area to get an idea of what we are looking at. This house wouldn't be anything over the top. Since it is basically going to be for my dad it will be somewhere between 2000-2500 sf and 1 story since he has a bad knee. We have found one house (http://www.floorplanhost.com/1075oldredranch/idx/) but we are pretty far apart on price since she is pricing it FAR above the comps. That said it's exactly what he is looking for. A great view with land that is quiet but close enough to Dripping Springs and Austin. Anyhow, my real estate agent felt that a comparable house could be built in the neighborhood of 300k. It's hard to find 1 story homes under 2500 sf that look good and are built within the past 5 years out there. So that's what got me and him thinking about just buying some land that is a little closer in and closer to Lake Travis and building something.
since stairs are a problem, u can pay about $25k for an elevator and then build higher if u wish......might be worth considering if u want to take advantage of the open views from a higher floor
A handy guideline for residential construction is to price it at $200 / square foot. This could obviously go up or down depending on what type of features you are putting into it. Yes, a house can become a moneypit and you should always be prepared for the unexpected but a good designer and contractor can help take out a lot of the uncertainty. Of course as always if you are bidding the project out be wary of low bids.
Custom houses don't necessarily need to go over budget. It is usually the buyer that can't stay within their allowances. "THIS tile is only $1 more a square foot." "This wood floor is ONLY $2 more", etc. One of the big surprise costs your father is going to find is how much more it costs to build on unimproved land. Building a house, custom or tract, in a neighborhood bears a ton of the development cost, spread out into all the other homeowners. Building out on unimproved land adds bunches of costs and they can get away from you. You will have to pay for: 1. Electric access. 2. Well water and septic 3. Land clearing 4. Most likely land leveling and grading 5. Grading for water run-off and maybe even retention 6. Drive way...even if its gravel it can be expensive if its long 7. Frontage road access (do you have to cross a ditch to access the road?) 8. Fencing? Depending on many factors, these additional costs can run $30K to $100K over what it would cost to build in a neighborhood. If this is in the Austin area on rock, it can cost even more if they have to blast. The house itself can be kept under control cost wise with a strong contract and if you stay within your allowances.
Missed the part about building on unimproved land. Make sure you get soil and hydrology tests before you build and check to make sure there aren't other things like if the land is considered critical habitat or archeologically significant.
you really cant find one story 2000+ sqft house in that area? I would think there would be tons. that area has been blowing up the past 10 years
I knew about those factors, but you laid them out clearly and it really made me get why land seems so much cheaper than the homes that are already built. It's just hard to get the land prepped for building since a lot of it is on slopes and needs electrication and water. That said we would be looking to do a rainwater collection system versus a well. Those factors are probably the reason why the lady on that property we are looking at is asking for $218/sf when the comps are at $150-$175/sf. That home is a custom built home and I'm guessing she is trying to get some sort of profit out of it when that really can't be expected. Thanks for the post.
You can find them, but most of them are either older or 3000+ sqft. Also, most of the new construction is 2 story homes. Also, my dad really wants to have 2+ acres of land and homes built on those sites are generally larger and 2 stories. Then on top of that he really would like something with a great view, so that limits the possibilities even more. It's just gonna take more time to figure it out.
It can, but not always. Like you said, depends on how willing the owner is to stay within their budget. I built my own house (I was the contractor) back in 2006. I had to do all those things you listed and still stayed within a $75-$80 sq. ft. budget (not including the price of the land itself). My wife and I were very disciplined and did quite a bit of sweat equity. Just a few years later, our house is $110/sq. ft. Not everyone can do it. My wife and I almost couldn't do it and it almost destroyed our marriage. However, I would strongly encourage anyone who has thought about it to go for it. The long term financial benefit is awesome.
Poor guy question. If you want your house custom built, everything comes out of pocket? are there loans available?
Certain banks offer 1 year construction loans. On mine, it was basically a line of credit that I took draws off of periodically to pay for sub contractors and every month, I would make interest only payments based the running total of my draws. After I was done, I took out a mortgage on the principal that I ended up using to build.
