Remodeling a house versus building a house?

[Teufelhund]

I'm looking to get out of our starter house in the suburbs and move to a place like Evergreen or Conifer. We want a little bit of land (a couple acres or more) where I can put down a garden (and give me a little space away from the neighbors), some nice views, and some more square footage to continue raising our kids.

I'd like to keep the price under $500k if possible, so we've been debating either buying a place in the $300's and remodeling it into what we want, or buying a lot and building exactly what we want. I don't know anything about having a house built or what hassle is involved in getting permits, running utilities, digging wells, etc. I do know that remodeling an old house will turn into a lot of money and headache as well, and you've still got to worry about older parts that need replacing a lot sooner than if it were new. I've got some time to work out the detail; we want to be able to move sometime in the summer of '16.

Is it worth it to build new so you know you're getting exactly what you want? Are there any common mistakes/pitfalls I should watch out for? Should we just buy something existing and remodel? Any advice is appreciated. Thanks!

[newracer]

If remodeling make sure you know if there is any asbestos or lead-based paint before you purchase.

[Wulf202]

I could type a novel on this.

If you find a house with good bones I'd advise remodeling before you take possession

I think it's 301k ? Where you finance the remodel when you buy and move into the place you wanted

[ruthabagah]

You want to consider you financial situation / income: is it better for you to finance 500K but have no OOP renovation cost, or 300K but self finance OOP (out of pocket) renovations?

If you know you are a good handyman and can fix it yourself, then get a fix her up. It all depends if you are a Bob Vila, or a Noob Vila....

[Ranger353]

Great question. Hind-sight is 20/20. My wife and I asked ourselves the same question in 2004, and we decided to buy an existing home and fix it up. The reason was because when we began going down the path of building we were surprised, maybe even shocked, at the initial out of pocket expenses. You can always go to a mill-builder and the initial expenses are minimal, but like you we wanted some land and space between us and the neighbors. You're not going to find that with a builder that is mass producing homes in a development.

We found a good compromise home on a 2.5 acre lot that is fully wooded. Then we found out that the time and effort over this last 10 years to repair what is already there is significant, let alone updating and modernizing the house. This home was not old, built in 1988 but it was dated in the 1980's style and floor plan. The deck was up to code in 1988, but when we had it rebuilt in 2012 the code standards push the costs to $20k. Add new garage doors, the originals were wood and wood ages and warps, at $5k. Hardwood floor repair, and replacement in some places due to updated codes, $10k. The list goes on and on.

Bottom line for me: If we knew then what we know now, I would have spent the initial $15k for the designer and general contractor fees and built new. The construction loan rolls the land and materials into one loan, and with a reputable builder, the contract is solid and there are no hidden fees, costs overrides are controlled, and you get a new home with a warranty.

Just my 2 cents.

[fitz19d]

Caveat to a non mill builder is horror story of folk that sold us our house. Custom house built in Nederland or something like that near Boulder. Expected finish date in like June, went into like October for them and they also had a stucco room they didn't listen to them about a specific "Pearl White" they wanted from a specific company. (He was a painter) Contractor's Contractor got a different pearl white and they ended up with a pink stucco'd house on top of the other delays. Had to just fill it in/paint over it and make it not stucco. Had other problems I cant recall.


Other friend had a designer mess up a plan followed by contractor not catching it nor the county inspector on a foundation for him to put a prefab home on. (Wrong size/dimensions) Still in court over it years later and has this basement foundation on his land and his home up on a hill sans basement.

[MED]

The answer to this question depends greatly on your ability to do the renovations because the costs are radically different. My current house (5 acre 1980 build) needed an estimated $50,000 of "move-in" work done when I purchased it. I did the work myself plus a lot more for less then 10K so I got a great deal; I also had money built in to build my shop. It had a new kitchen already so i just had to do the bathrooms, floors, and drywall and some electrical...no big deal. I have the flexibility of pretty much doing whatever I want with my house as I have the money to do it. The most important part to me is that my house is set up with wood burning stoves. I am not sure if Jefferson county will allow wood burning in new construction in Evergreen or Conifer. The houses by me range from $320,000 to 1.2 million so I have the flexibility of not pricing my house out of the market. You really need a green house up here to do much with a garden at least up by me; I am at 9,000ft. Also, some of the property up here is rated A2, which was also important to me when I moved here.

I would suggest writing down what is important to you and make sure that your list is possible with your options new construction or existing construction.

Edit: When I moved up here, the county choice was based on schools. If I had it to do over, I would definitely go to Park country instead of Jefferson.,

Second Edit: The only real gotcha that I experienced when I moved here was the transportation cost. The cost of 55 thousand miles a year of mountain commuting before I got divorced was horrible. I was constantly buying tires and that killed me. Also, make sure you are prepared for your first winter; I wished that I had a plow among other things.

[Teufelhund]

This all really great stuff and exactly what I'm looking for. Thanks!

I lean toward building new instead of remodeling something. I like the idea of a warranty, and I have no problem being the pain in the ass buyer who micromanages the contractors while they're building. I am worried about getting utilities run to an empty piece of land and the cost it will add to building new. My wife wants to buy existing place and remodel; she watches entirely too much HGTV and thinks it's as easy as they make it seem. "We'll just take your $80k and turn this old barn into a barbie dream house and. . . poof!" I've done my fair share of remodeling and construction, but I'm slow as hell and I wouldn't want to take on a large project myself.

[def90]

You will always go into cost overuns with either.. Don't let your wife confuse "redecorating" with "remodeling".. two very different things. If you have a vision, know what you want and stick with it new construction will likely be cheaper than remodeling an existing place.. however, new construction limits you to very few open lots/land that are available and that land in the area where you are looking may very well price you out of new construction vs buying a used home with good bones and just needs an update. The other trap of building and remodeling are the change orders.. every corner you take in the process will provide you with oportunities to upgrade this item or that item or move this cabinet or that wall, I have seen many clients lose sight of their initial aim and get buried in change orders that turned their $500k project into a $1mil home by the time they were done.

In other words.. I would spend a few months looking at homes on the market in the area that you are looking to see what is available. There are tons of house on the market in the Evergreen/Conifer area and many have been on the market for a while. Finding a number of homes with the land and features you are looking for will give you a benchmark to work off of and you never know, you might actually find the house you want that is ready the day you move in.

[MED]

In other words.. I would spend a few months looking at homes on the market in the area that you are looking to see what is available. There are tons of house on the market in the Evergreen/Conifer area and many have been on the market for a while. Finding a number of homes with the land and features you are looking for will give you a benchmark to work off of and you never know, you might actually find the house you want that is ready the day you move in.

This is a true statement. Over the past 7 years, I saw houses move really slowly up here; there were some great deals for awhile, which hurt our home values. However, I did see two houses move really fast last summer. I don't know if things are changing or not. There are typically two kinds of people up here. There are those that come up and put their house on the market after the first winter, and those that leave after the kids are gone. There are a few homes by me that are only used in the summer by retires. Make sure you really want to live up here before you commit.