To Build or Not to Build

To build or not to build? That is the question facing a lot of new home buyers in today’s market. With Anchorage’s aging housing inventory, home buyers are frustrated with the lack of aesthetically up to date homes and ones that are built to current code standards, particularly when it comes to energy efficiency. Couple that with the lack of speculative new home construction in the local market place and buyer’s are faced with the dilemma of whether or not they should purchase what we call in the industry a ‘to be built’ or in other words, buying a home from a piece of paper.

There are three significant factors to consider before jumping into the world of trusses, foundations and sheetrock texture. The first decision has to do with the selection of the builder. Does he have an excellent reputation? How long has he been in the business and does he have repeat customers? Will he give you a fixed price and does he have the financial capability of taking out the interim construction loan so that all you have to do, as the buyer, is qualify for the long-term mortgage, just like you would do if you were purchasing a resale home? Try to select a plan, with minor custom modifications to suit your needs, that the builder has built before. He’ll know his cost down to the board feet and will not have to provide a contingency for himself. What’s also important is if he is already building in the development where the lot is located which allows him management efficiency. For example, if you want a home built on the hillside it’s probably not in your best interest to select a builder from the Valley to do the job.

Don’t be fooled by how large the home looks on paper. All homes look larger on a piece of paper. During the framing stage, all rooms look small, even though you can see through the studs. Then, when the house is finally sheet rocked, the rooms finally look like their actual size. Do a comparison with other pre-owned homes. Measure off some dimensions to see if the rooms are the right size for you. One size doesn’t fit all when it comes to building a home. Think about usable square footage. Would you really use that loft area overlooking the living room? Hallways and stairs are part of the square footage of a home but you want them to be as minimalist as possible because they are not considered living area. Put your dollars and square footage where you’ll spend most of your time.

Having assisted buyers in this process for almost thirty years, I’ve come to the conclusion that one of the most important criteria is whether or not the buyer has the ability and the time to go the distance when it comes to making decisions. There will be literarily dozens of decisions that have to be made down to the selections of the knobs and pulls for the kitchen cabinet, the light fixture in the laundry room, the door handles as well as the big decisions such as flooring, cabinets and wall color. For someone who doesn’t have the time, it can be a very frustrating process.

Recently, I had the pleasure of working with a young professional couple—both with high-pressured jobs and one who travelled extensively. They considered building and realized they didn’t have the time to make the decisions. They also recognized that they would be frustrated in the process because they knew nothing about home building. They recognized this was not their area of expertise, or frankly, even interest. They were fortunate to find one of the few brand new completed homes on the market. It was the right decision for them.

On the other hand, having a home built is a very creative process and if you have the time one that can be thoroughly enjoyable. There’s nothing quite like building your dream home rather than buying someone else’s—if you have the time and financial resources to do so—with one important caveat. It’s hard to say no to yourself when you’re standing in front of a dozen kitchen faucets and you absolutely love the $450 one rather than the one in your builder’s allowance for $150. Those small decisions can add up to thousands of dollars. And it’s hard to say no to yourself when this is your once in a lifetime opportunity to fulfill your dream home. So, be prepared to spend more than the fixed price the builder has given you.

To build or not to build—that is the question. And only you can answer it.