It seems lately the simple act of watching the news is enough to make prospective or current homeowners long to crouch in the corner and hope the turmoil of today’s economy will blow over very soon. With all the talk of overspending and markets sinking, one would assume that building a new home or remodeling and existing home would be the last thing on a person’s mind. However, consider this: the price of real estate – including land – has never been more affordable and the cost of building supplies is the lowest it has been in years. If you have considered building or remodeling a new home, today may be the best time to take the plunge.
“Remodeling has been where most of the residential construction has occurred the past couple of years,” says Marty Milstead, Executive Vice President of the Home Builders Association of Mississippi (HBAM). “There is still a strong remodeling market, but builders are beginning to gradually put new inventory back into the market as financing comes available.”
Custom home builder Paul Graham, owner of Paul Graham Homes, LLC, has also noticed an upswing the in the demand for custom homes since the beginning of the year. “Within the past six months I have had several people inquire about building a custom home,” says Graham. “The interest has definitely increased.”
There are several advantages to building a new home. Since the home is brand new, you don’t have to worry about replacing an old roof, air conditioner, appliances, etc. Many builders offer a home warranty, so if something should go wrong the warranty may cover the cost of repairs. Also, you and your family will have the piece of mind knowing that you are the first people to live in the home. There will be no “surprises” left by previous owners. “The home owner has more control of building exactly what they want and need,” adds Graham. “Also you get a new product with a warranty and all the features are up-to-date. In an older home, you might have to do some updating. There is also the satisfaction that many people get from starting from scratch and seeing the finished product.”
When opting to build a house, one can choose to build either a semi or a fully custom home. When building a semi-custom home, the builder usually presents the client with several house styles and floor plans to choose from. Clients are given the option to select what type of flooring they want, in addition to cabinets, appliances, lighting fixtures and lighting locations. Often, builders will include a “budget allowance” that gives the owner the option to choose fixtures, appliances, etc. Anything in excess of the budget allowance must be purchased at the owner’s expense. A semi-custom home is a compromise between building a fully custom home and purchasing a pre-built spec home where the layout and design is already predetermined. Building a semi-custom home provides an owner with the ability customize some of your home’s features while keeping expenses at a reasonable level.
Building a fully custom home gives the owner the freedom to choose every single detail, from lot selection and the style of the home to the floor layout and room sizes. Owners also have the final decision on cabinet and flooring selections, windows, doors, siding material, paint colors, and lighting. Depending on the features of the house and how unique the client wants their new home to be, custom home builders can expect to spend 2 to 3 times more per square foot on construction costs.
If your current home doesn’t fit the needs of your family but building a new home is just out of the question, remodeling may be the solution. Remodeling will allow you to make custom additions that fit your needs without the expense of building a custom home or dealing with the stress and cost of moving. It is also a great way to add value to your house. According to an annual report conducted by Remodeling Magazine, updates to the kitchen and bathrooms provide the best return on investment. However, experts warn that a remodeling job should not raise the value of your house to more than 10-15% above the median sales price in your neighborhood.
Whether you choose to build or remodel, the hardest part may be finding the right builder. Says Graham, “First you need to look for a professional home builder whose main line of work is home building. Find out information about the builder and if he or she a member of your local home builders association. In Mississippi, there is a Certified Professional Builders Program that promotes professionalism in the building community.” Graham also encourages prospective clients to make sure their builder carries all the required forms of insurance such as general liability, workers compensation and builders risk. “Look for someone you feel comfortable with and want to go through the process of building with. From planning through building, there is much communication between home owner and builder. Find someone you enjoy doing business with. Don’t always go with the lowest bid. A bid is only as good as the amount of attention to detail that goes into it.”
Milstead encourages prospective home builders to utilize the resources his office has available. “A home is the largest investment most people make in their lifetime,” he says. “Why would you hire someone that is not insured and licensed to build it? Our office can help find builders that are licensed and insured.”
May want to include this as a sidebar
• Certified Professional Builder
• Home Builders Association of Mississippi
• Mississippi State Board of Contractors
The Home Builders Association of Mississippi offers these helpful tips when choosing a homebuilder or remodeler:
• Is the Builder or Remodeler licensed by the State Board of contractors?
• Does the builder/remodeler have workers’ compensation and general liability insurance? If not, you may be liable for any construction-related accidents on your premises.
• Get it in writing. Will the builder/remodeler provide you with a complete and clearly written contract, a document signed by both parties? the contract will benefit bot of you. Review it carefully.
• How long have they been in the building business? It usually takes three to five years to establish a financially sound business. Will they be around after the construction is complete to service any warranties?
• Will the builder/remodeler provide you with names of previous customers? As them if they would hire the builder/remodeler again.
• Have you seen the builder/remodelers work, both completed and in progress? Check for quality of workmanship and materials.
• Are you able to communicate with the builder/remodeler? Remember you will be in close contact with them throughout the construction process and afterward as you live in your new home.
• Be cautious of usually low-priced bids. If the builder/remodeler is unable to pay for the materials and labor as the project proceeds, this may indicate a potential problem.