Is it cheaper to tear down our existing house and rebuild, or buy a new construction?
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Anonymous
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We love where we live, we hate our house. We've been in it for about 8 years, and can now afford to do a major upgrade, and move into new construction. But we are now considering whether instead of buying a new house, if we should tear down our existing house and build on the land we already own.
Generally speaking, is it cheaper to do this? |
Anonymous
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It depends. How much value is in your house to other buyers if you were to sell or is it a teardown for pretty much any buyer? Then how much is your mortgage, i.e. how much would you walk away with after a sale? And how much would it cost to buy a new build where you want? You don't necessarily have to answer all that but it's tough to determine with the limited info you have given, I'd need much more than what you have outlined.
To teardown and rebuild, you are probably looking at anywhere from $250,000 to $375,000. I know that's a huge range, but it depends on how much house you want to build and how nice the finishes are, etc. |
Anonymous
Our house is not a tear down - it would probably go for about $815. (Our current mortgage is $650k). The house we would want to move to would probably be around 2 million (new construction). So if it really is only 375k to build, then that would definitely be cheaper! I really have no idea how much it would cost to build - that's the variable I am unaware of. But I guess my question is, if a house down the street is on the market for 2 million, how much would it cost us to build that same house on our property, aka, what is the mark up? We are in Bethesda, FWIW. |
Anonymous
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PP again.
There are plenty of builders who do an on-your-lot house. It really depends how much you want to do to the house but my husband is a developer (his partner does the building) and their houses sell new for like $225/square foot. That is including the land though, so you would have to net that out. I'm not 100% sure how to do that, but say you build a 4000 sf house, you're talking about a builder selling that for $900K to maybe a million. If you already have land you love, then your instinct is correct - teardown and rebuild. What you want to avoid if you can is create a plan from scratch. Try to find a builder with house plans that you like or can work with without a ton of extra charges to add options. |
Anonymous
| Don't forget to add in the cost of living somewhere else and storing all your stuff. |
Anonymous
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OH, and I realize I didn't answer your question about markup.
The price differential is always in the land, so it would cost the same to build that $2M house down the road as it would to build on your lot, it's just that the builder may have paid more for the land / land is more desirable etc. What makes a house in one part of Bethesda cost $700K and the same house in another part $1M is location. Unless those $2M houses you are talking about are too big for your lot...in which case you couldn't built it anyway, but, they would be sitting on a bigger piece of land which is factored into that cost. |
Anonymous
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There are lots of factors for you to consider:
Tear Down costs - cost to knock down your exiting home and haul everything away 20-50K (size, etc) Build-up Costs: Many home builders out there in the area that you can choose from - if your lot size can accommodate, and you like a home that is already a builders 'designed' you can get a very nice home built for 100-125 dollars per square foot. If you need custom designing and architecture, the price can go up quick - 150-200 per square foot. If you go with a lesser known builder (some are really good) you can knock down costs by 10-20%. A good real estate agent in your area can help you evaluate what would work best for your: Remember when considering building a new home on your lot - you can't tear down a home if you have a mortgage on it. You will have to own the home/land outright then get a construction loan for building the home, or use cash to build the home also. After the home is built, you can look into getting a mortgage on home is you want to take some equity out. Another thing to consider - from start to finish you should be done within a year - will you be renting for this time period? If you need a recommendation for a Realtor in your area let me know! |
Anonymous
| Builder here. New construction costs more than a resale. So if you want the best deal then work hard to secure a resale. If you just want new for new you could buy one from a builder on spec. Would not recommend that. When you are a spec builder of the three decision tree - time,quality and money, a good spec builder is going to elect time,money, and quality in that order. I said a good spec builder, not a good builder. I believe you want quality,time, money as the three decision trees so I would be very hesitant to buy spec. In terms of rebuilding on your lot don't listen to knuckleheads on this site sprouting costs. Call up a couple of architects and have them come out. They will give you an idea. That all said, I would assume at least 300.00 square foot cost for build alone for a nice custom home. So, yes if you want a nice 5000 square foot colonial it is going to cost you 1,500,000.00 to have it built. I'm not talking a shit box I am talking a well done home - and that is not completely top of the line. I am working on pricing a 7000 sq. ft. one now and I think the number will start with a 3 as it is definitely 400.00 square foot construction. |
Anonymous
If you get a builder that does few homes a year they are going to really charge high. Look for a company that does many homes or even preset plans and you will save a ton. In the short term a high end builder that over charges you won't pay off but you probably can get what you want exactly. Here is a mid grade builder w/ pricing included. Everyone here hates them especially high priced custom builders. http://www.ndimd.com/ http://www.newdimensionsinc.com/gallery-of-homes.html |
Anonymous
5000 square foot colonial it is going to cost you 1,500,000.00 to have it built. That's abusurd |
Anonymous
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LOL at PP's. People, please, his holiness the builder called us all knuckleheads. We don't know anything!!!!!!
OP, I'm the one who was responding to you first, don't listen to the builder. Architect, omg, way to drive your prices up. There are so many builders in town who have plans already and working off those plans will save you TONS of money. I can't even bother with the rest of what he said. I'm an agent and often go head to head with some people on this site about the economy and about the use of an agent in a transaction, but in this thread and on this topic? Plenty of people here are going to be well versed on teardowns vs. new construction, especially in Bethesda. I worked for a builder for years, and know the costs, and what that builder upthread is quoting you is being said from the other end of a crack pipe. Everyone else is offering good advice. Stanley Martin is another one who builds on your lot, and they have tons of house plans. PP recommended NDI. There are a bunch of others, you can do it without spending what the builder on the thread says. |
Anonymous
| A couple of my neighbors have torn-down and rebuilt. I was really surprised by how much the price differed based on the builder. A bigger builder seemed to be much less, and also seemed to finish the house in days, whereas the smaller builder seemed to take a while (crew would come for a day or two, and then leave for a couple of weeks). I don't know if the bigger builder cut corners, but the two houses look a lot alike. I was told by that the bigger builder only took the job because things were slow during a couple of years ago and no longer accepts that type of job (building tracks of homes instead). |
Anonymous
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OP - We were in a similar scenario. We ended up tearing down. You first need to determine how you are going to finance everything. If cash, then great. If you have to get a loan, talk to some of the local banks who do a lot of construction to permanent loans to see what their terms and conditions are and what works best for you. Go to open houses (especially in the Vienna area) for new builds to get a sense of the builders and their products/craftsmanship. Check out a list of builders in the area using sources like the Norther Virginia Building Industry Association. Then, after you have seen a few builders that you like, go talk to them to see what their price would be for the size and type of home you want. The total price to teardown and rebuild an approx 5,000 sq ft home will run from a half million (on the low end) to a million (on the high). You also need to factor in rent (you will need someplace to live while your lot/home is built).
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Anonymous
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It's definitely cheaper to tear down and rebuild. We built new in Bethesda. Our approximately 5000 sq ft house cost about 700K to build with relatively high end finishes. We shopped around builders and there's a huge range, but but it was significantly less to build than it was to buy new. I would contact 2 or 3 custom builders who build in the Bethesda area and ask them to give you a general sense of cost. Many of them have existing plans that you could modify without having to incure significant architectural costs. Best way to figure out the builders you like is to drive around and look at other houses being built that you like.
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Anonymous
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I did construction litigation years ago on behalf of a subcontractor, and I was always very impressed with Stanley Martin homes. I would feel comfortable using them for new construction -- the owner was very hands on and knew a lot about the industry (at least in the early 2000s.)
On the other hand, you'd have to pay ME to buy a Pulte home. |