So you want to build a brand new home. Do you buy raw land or a platted lot? This is a question full of uncertainties, and as a whole, the issue with raw/undeveloped land is the overall cost in a certain area. Plus, with raw land, there are a lot of “unforeseen” costs that can arise as well; fees related to grading, adding a septic (if applicable) or tapping into city utilities, building costs, etc. Buying a lot from a builder usually includes the lot development fees.
When choosing a builder, one BIG “scare” for the buyer is if the builder were to go bankrupt or stop construction in the middle of the build. Or, what if a builder underbids the project and adds more costs that the buyer may be expected to absorb? Usually new home loans require at least 25% down and construction loans usually operate on a “draw”, which can be a bit labor intensive for builders. Another factor is that many “known” builders are going into subdivisions already platted and do not build on raw land as it’s too risky for them or their crew; it is much more efficient with more homes nearby and supplies readily available.
When you buy a “new build” within a planned community, the builders are usually more “robust” in their financial backing, and they require less money down. Community builders are also bound by their pricing, in a more concrete manor, so a buyer knows what to expect and what costs are going to be associated with the build. For the most part, these builders will absorb additional costs, especially when additional costs occur because of their errors or just delays/circumstances that a buyer cannot control.
If you prefer to buy an existing home, instead of a new build, you can always remodel it; the structure and all applicable systems are already in place, so you do not have to worry about grading, septic/sewer and water, etc. Sometimes it seems that more renovation contractors are available than builders.
If you are looking to build your dream home but still have questions before making your decision, call Team Anderson Realty at 919-610-5126. We have Licensed North Carolina Real Estate Agents here to help!