The US News and World Report recently compiled a list of four common, costly financial mistakes that new-home buyers often make. Mistakes when building a home can be easy to make, so look to this list to avoid making some avoidable errors.
- Don’t overbuild: you need less space than you think, and smaller means less expensive and less maintenance.”I meet potential clients in my office almost weekly who tell me, ‘We built a 6,000 square-foot home, but now we’re dying to downsize to something smaller,'” says Andy Stauffer, owner of Stauffer and Sons Construction, a homebuilder in Colorado Springs.”Most families don’t even need 5,000 square feet, and a home as small as 2,500 or 3,000 square feet won’t feel small if it’s designed properly. A larger house is just more expensive and harder to maintain and clean.According to the National Association of Home Builders, a custom home in the U.S. costs an average of $105 per square foot to build. That means by eliminating even 500 square feet in a home that you don’t need, you’ll save over $50,000.”
- Consider resale value at the beginning: you can’t predict the future, so be sure to build a home that someone else would want to buy.
“It’s simply a fact of life: Most of us don’t know for sure where we’ll be in 10 or 15 years, as much as we’d like to think we do,” Stauffer says. “I recently spoke to a real estate agent who had some clients that built a five-story custom home. They loved it, but when it was time to sell, they had to drop the price by tens of thousands of dollars and sell at a significant loss because nobody wanted to buy a five-story home and walk up and down the stairs all day long.”
3. Weigh the upgrades: hardwood floor, or finished basement? Decide which upgrades mean the most to you.
Which upgrade options should make the cut? Buyers may have to teeter between too-conservative and not-conservative-enough when choosing extras. “You will be surprised at how quickly a $200,000 home becomes $400,000 in upgrades,” says Joan Fradella, a family mediator in West Palm Beach, Fla., who built a new home in 1998.
4. Monitor the progress: by checking in on your home as the building progresses, you can catch changes early to avoid regrets and extra costs at the end.
“Visit the site during construction,” advises Nicole Cannon, a resident architect in Los Angeles. “Make sure things are matching your expectations, and ask questions if they don’t. The worst option is to remain quiet and end up with something that you are unhappy with or have to pay to fix after the fact.”
These four are highlights of a longer list compiled by the US News and World Report of common financial mistakes made by those building new homes.
Need more advice? Contact RE/MAX Paradise today with questions about your Miami home or real estate hunt!