Anonymous wrote:The adage is "Fast, cheap good, pick two." And it's generally pretty accurate. And a number of wealthy homeowners are very demanding about "fast."

I am the PP (remodeler) that posted this.

This has been my experience as well.

I have had a few bad experiences and it has always involved either schedule while wanting white glove service or clients wanting the trifecta (good, fast, cheap).

I am continually amazed that they completely discount quality like it’s a given.

Not sure if the answer is to raise prices to add support staff and/or self perform the work in order to hit their schedule or not go after that segment of the market.

It has also been my experience that this client segmentation is the most likely to not pay their last bill in full.

Anonymous wrote:OP - Do you mind sharing more about financing the new build? Such as how the interest rate compares to a purchase (30 year fixed)?

I’m not OP but you get a construction to perm loan. The rate you lock in at the beginning is the rate you lock in when the build is done and the loan rolls over to a regular mortgage.

In the meantime, the builder draws from the bank, usually after every milestone, ie foundation, framing etc. You pay interest on the money you draw but you only do that for the length of the construction.

If OP’s construction happened before or during the early days of the pandemic it will be significantly cheaper than today.

OP comes off as an arrogant jerk. Maybe it's not intentional, but it sure feels like it.

OP - Do you mind sharing more about financing the new build? Such as how the interest rate compares to a purchase (30 year fixed)?

This might be a good time to talk about financing new construction, which will also address a number of comments about the value of the house/land, etc First, our new build is under an hour drive to downtown DC (with traffic), OR, a 15 minute drive to a train station + 30-40 minute ride in. So, its definitely a suburb but I wouldn't call it an exurb.

Three main categories of costs to build include: Lot/land cost, Site prep (that includes permitting, grading, sewer/gas/electricity hookups or infrastructure if neccessary, stormwater management, etc), and construction. I'll add a 4th category, which is financing (loan closing costs + interest until the new construction loan converts to a mortgage, at completion of construction).

Our loan is a construction to permanent loan, which we got through Sandy Spring bank. If there is interest, I'll go into more detail, but the thing to know, in light of upthread confusion or misinformation, is that the bank appraises the construction plans and while they don't reveal the specifics of the formula, just like any other appraisal they use comps in the area. We're pretty in line with similar homes that have sold in the last 3 months within a 2 mile radius--a little high, as is typical of new construction, but within the +20% .

Its very hard to get a loan if the home falls outside of these norms. It does help to have 'dry powder'/cash as a previous poster noted. Just like a regular mortgage, the bank will not finance 100% of the cost of the home. Construction loans are just that-for the build. They don't cover purchase of the land, or site prep. Those are all significant costs. Site prep is an easy 100K.

Anonymous wrote:

Anonymous wrote:OP here--first clarification. In the realm of custom homes, going with a design-build firm that has builder, architect, permitting,and even the lot purchase in house is the generally the most expensive way to go. Lining up the architect, builder, etc saves money comparatively.

A move in ready home will definitely save on stress, but then of course you're not getting exactly what you want. And as far as total cost, an existing 5500 sq ft, 5 br/4.5 bath, 2 car garage home will run 800k-2M, depending on location. Compared to an existing build, similar specs in Bethesda, we'll be saving money. Compared to an existing build in Fredericksburg, for example, we'll be spending more.

One reason we're building: we have a family member who uses a wheelchair and I was finding it impossible to find universal access. By the time we looked at sinking 75-100K into making a home truly disability friendly, it made sense to build.

Here was how we found the lot: our budget meant that we skipped the close-in mo-co areas, where a sliver of a lot is going for over 300K, and that's if you're lucky. We wanted the following: good school district with diversity (we have young kids), convenient location for hybrid work for commutes into DC 2-3 times/week, if possible, existing sewer/water hookups, and 1/3 to a half acre. We found our lot that met all of these specs by setting up search parameters on Redfin, and purchased it back in 2020. Total cost: 82K

You’re spending 1.4 building a house on a lot that cost 82k? Seems way off.

IKR? Are there enough buyers of 1.5-2 mil homes where lots cost 82K? Even if you plan to live there forever, you still probably want to consider resale value.

Anonymous wrote:Folks, OP bought land, not a tear down. So the 600K that would have gone to buying a house to tear down is being reallocated to actually build his/her home, cover architect costs, engineering, permits, septic, well, etc.

Tear down homes go for a price of land, they are rarely rehabbed and rarely bought by families wanting to live there. What qualifies as a tear down depends on an area, its growth and prices. In our area older homes in fine move-in condition often go as tear downs because new homes are now around 4 mil. Older "tear down" would be over 1 mil as a result, and if you get more it's because your lot is bigger and not because your old house is remodeled and move-in ready. Bigger lot=higher price even if the house is in much worse condition. There aren't many open lots that don't have structures on them in some areas, these are unicorns in inner beltway premium neighborhoods.

The adage is "Fast, cheap good, pick two." And it's generally pretty accurate. And a number of wealthy homeowners are very demanding about "fast."

Folks, OP bought land, not a tear down. So the 600K that would have gone to buying a house to tear down is being reallocated to actually build his/her home, cover architect costs, engineering, permits, septic, well, etc.

I really appreciate the effort the OP is putting into share their story. Nice to hear a voice that isn't someone trying to sell thing. Please ignore the haters and keep describing how it's going!

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Total cost: 82K

As someone who went through the new build process in 2020 too, I was interested in this thread until I read that. OP, you're describing a situation/location that is not relevant to probably 95% of people on this forum

Yeah, this is like rural pricing. In the DMV area, it’d be more like $600,000 for a tear down, $200,000 to tear it down, $500,000 for an architect, and $1million to build.

If we could custom build for 1.4 million, we’d all be doing it. Instead. We spend that much on a house that just checks a couple boxes and we have to renovate it.

It was 30k to teardown our house in McLean about 5 years ago, not sure why is 200k now

To add the house we tore down was 800k, architect was 12k, the build was 900k

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Total cost: 82K

As someone who went through the new build process in 2020 too, I was interested in this thread until I read that. OP, you're describing a situation/location that is not relevant to probably 95% of people on this forum

Yeah, this is like rural pricing. In the DMV area, it’d be more like $600,000 for a tear down, $200,000 to tear it down, $500,000 for an architect, and $1million to build.

If we could custom build for 1.4 million, we’d all be doing it. Instead. We spend that much on a house that just checks a couple boxes and we have to renovate it.

It was 30k to teardown our house in McLean about 5 years ago, not sure why is 200k now

Anonymous wrote:

Anonymous wrote:Total cost: 82K

As someone who went through the new build process in 2020 too, I was interested in this thread until I read that. OP, you're describing a situation/location that is not relevant to probably 95% of people on this forum

Yeah, this is like rural pricing. In the DMV area, it’d be more like $600,000 for a tear down, $200,000 to tear it down, $500,000 for an architect, and $1million to build.

If we could custom build for 1.4 million, we’d all be doing it. Instead. We spend that much on a house that just checks a couple boxes and we have to renovate it.

Thanks for sharing your journey. I have land that I hope to build on one day and I’ll definitely be checking this thread for updates. My land has challenges (well site on the top of the property, septic drainfield on the other side of a large hill) so I know that is going to add some significant money. I’ve very interested to hear a firsthand report.