Philadelphia Weekly

REAL ESTATE

Surprise costs of custom-built homes

REThink Real Estate

By Inman News Feed

Add Comment | Comments: 0 | Posted Nov. 15, 2012

Sometimes, custom-built homes end up with well-intentioned but ill-conceived features that make them difficult to resell precisely because they are so heavily customized that the home simply doesn't work or appeal to many other buyers than the home's original owners.

Are you absolutely, 100 percent certain that you couldn't get your wants and needs met with an existing home or a new home in a subdivision already being developed?

If you haven't already, start house hunting online and start visiting open houses; you might find that a home that has been recently remodeled, or a fixer-upper that is in need of an update, can give you the fresh, customized-home look, feel and features you want, with a fraction of the cost, risk and hassle of building brand-new.

Don't fall for the myth that it's cheaper to build

If your primary motivation for wanting to build a new home is the rationale I hear so often that it's "cheaper to build" from the ground up than to buy an existing home, beware the many pitfalls and fallacies that are often built into this line of thinking.

Is it ever cheaper to build than to buy a home? I'm sure it's possible. But I often hear people say this who have seen a single, inexpensive lot somewhere, heard an anecdote about a cousin's cousin who paid $12,000 to build a house, and then add those things up and conclude it's so much cheaper to build! The reality is that the one lot they saw might not even be buildable, and whoever related the story about their cousin was talking about a treehouse!

Buildable lots, the cost of bringing utilities to them and obtaining the city's "entitlements" to build on them, the costs of building permits, architect and engineer services, and the margin of error for building cost estimates are all much greater than the average person would estimate. So, don't let the thought that it might be cheaper to build stop you from exploring other alternatives for owning your dream home.

Tara-Nicholle Nelson is author of "The Savvy Woman's Homebuying Handbook" and "Trillion Dollar Women: Use Your Power to Make Buying and Remodeling Decisions." Tara is also the Consumer Ambassador and Educator for real estate listings search site Trulia.com. Ask her a real estate question online or visit her website, www.rethinkrealestate.com.