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Many people dream about building their own home. No doubt that it can be a stressful and complicated process, but it’s also an exciting time. To ensure that your dream home doesn’t become a nightmare, it’s best to do a lot of homework and communicate often with those involved in the process.
Of late, many people may be frightened by the recent downturn in real estate across the country. You need not worry in the Cape Fear market, according to Donna Girardot, executive officer for the Wilmington-Cape Fear Home Builders Association.
“This market has never followed the national or the state trends,” she said. “Although the market has slowed over the past year to two years, we are now beginning to see it pick-up again as we head into our spring and summer selling cycle. The inventory that was out there last year is beginning to be absorbed because the builders did just what they should have done last year, they cut back on their building and they began offering incentives to begin moving their product. With the recent interest rate cuts, this is a perfect time to buy.”
“Despite a slowdown, the unique characteristics of this area have allowed us to maintain overall growth,” said Mark Schmidt of Schmidt Development Inc.
“Today, with the real estate market slowing in many parts of the country, all the market fundamentals show that buyers are now in the driver’s seat,” Girardot said. “Consider the facts: prices are competitive, interest rates are very affordable, there are plenty of homes in all price ranges to choose from and sellers are ready to bargain.”
Besides the current buyer’s market, there are many advantages to building your own home, including customization and a plethora of options. However, you might want to run through the following list, provided by the Wilmington-Cape Fear Home Builders Assocation, to make sure that building a home is the right choice for you. Although the decision is predominantly subjective, dependent primarily on personal tastes and needs, there are pros and cons to each option.
• Purchase price. Buying a home is the single largest investment most Americans make. Know your price range and you will find it in both the pre-existing homes market and the new home market.
• Negotiating room. The advantage here goes to buying. You will find both individual sellers and some builders willing to negotiate.
• Financing options. This is a much simpler process for pre-existing homes, which have the benefit of traditional financing: fixed- or adjustable-rate mortgages with 15-, 30-, or 40-year terms. If you choose to build a custom home, you have two primary financing options. You can find a lender for a construction loan--a short-term loan, usually less than 12 months--and then convert to a mortgage once the home is completed or choose a construction-to-permanent loan, which combines the steps. Builders may have their own financing available for an added premium.
• Energy efficiency. New homes win here. They are generally built with energy efficiency in mind, including better insulation and energy-conserving appliances. These selling points can save up to 30 percent on annual utility bills. Existing homes, however, usually do not have the benefit of new technology and frequently have higher utility bills.
• Maintenance and safety. Maintenance can be a large financial drain and a huge stress to homeowners. In this area, you can’t beat a newly constructed home. New homes typically have the upper hand because they are not only in excellent condition but also commonly come with first-year homeowner’s insurance/warranty. In addition, these homes are built to comply with newer, stricter safety requirements than older homes, including improved resistance to fires and earthquakes.
• Time. Time is a large factor in the decision to build or buy, and if you do not have time, building may not be for you unless the new home is already built and ready for occupancy.
• Customization. The ability to create a customized home has proven to have formidable appeal. It’s infinitely easier to have a house meet your exacting specifications if you build it from the ground up.
• Character and landscaping. Despite the advantages of customization, new homes will never be able to duplicate the mature landscaping.
• Amenities. Pre-existing homes have the benefits of established neighborhoods, including schools, shopping, and entertainment--all within reach. In the beginning phases of subdivision construction, burgeoning neighborhoods may have resources that are limited or inconveniently located unless they are located in a Planned Unit Development or an infill neighborhood which are getting to be a more available option for new development.
“Whichever option you decide, make sure you understand what you are getting into,” Girardot said. “Know your budget and the difference between necessities and wants, and rank items in the order of importance to get the most out of your budget. To protect your investment, insurance is absolutely necessary and, in many cases, required by the mortgage lender. There really is no clear-cut winner in the battle of new versus pre-owned. It’s all a matter of what suits your needs, budget and taste.”
Once you have determined that building your home is that right option for you, move on to the next steps. Choosing the right lot to build on, of course, is a primary consideration. There are many real estate companies offering an almost endless amount of options in land. Searching out the right lot will take time and research in any case, but there are several main considerations to take into account.
The first thing you’re going to need to know about the area is whether or not the price is right. Beach front property is generally going to be more expensive than inland property but has a wonderful market value increase. “There is only so much beach front real estate in the world,” as one local land owner said. “It’s better than gold!”
Whether or not the land will require a septic tank or not is another important preliminary consideration. Many areas in South Brunswick and some in Pender County will require septic tanks. This means that your lot will have to “perk” in order to build a home on it. Perking is a threshold capacity of water absorption through the soil. Perking is classified according to the number of occupants projected to live in the house, usually specified by the number of bedrooms. Once perked, the lot is ready to have a septic system installed and for construction to begin.
“Choosing a builder is the next and probably most important consideration,” Girardot said. “There are many reputable builders in the area and a rapidly growing group of communities. If you’re in the market for a new home, you should shop for your builder as carefully as you shop for your home. Whether you are buying a condo, a townhouse, a house in a subdivision, or a custom built house, you want to know that you are buying a good quality home from a reputable builder.
Here are a couple of tips to help you choose a builder, courtesy of the Wilmington Cape Fear Builders Association.
• Once you have thought about the type of house you want, you will need to find a builder. Contact the Wilmington-Cape Fear Home Builders Association at (910)799-2611 to obtain a list of builders who construct homes in your area. You can also look on www.wilmingtonhomebuilders.com, WCFHBA’s official Web site.
• Look in the real estate section of you local newspaper for builders and projects. Looking through the ads and reading the articles can help you to learn which builders are active in your area, the types of homes they are building, and the prices you can expect to pay. Make a list of builders who build the type of home you’re looking for in your price range.
• Local real estate agents may also be able to help you in your search. Ask friends and relatives for recommendations. Ask about builders they have dealt with directly, or ask them for names of acquaintances that have recently had a good experience with a builder.
• Once you have a list of builders, how can you find out about their reputations and the quality of their work? The best way to learn about builders is to visit homes they have built and talk with the owners.
• Ask builders on your list for the addresses of their recently built homes and subdivisions. Builders may even be able to provide names of some home owners who would be willing to talk with you.
• Drive by on a Saturday morning when home owners may be outside doing chores or errands. Introduce yourself and say you are considering buying a home from the builder who built their home. Talk to several owners, and try to get a random sample of opinions. The more people you talk with, the more accurate an impression of a builder you are likely to get. At the very least, drive by and see if the homes are visually appealing.
• When you talk to builders and home owners, take along a notebook to record the information you find and your personal impressions about specific builders and homes. Doing so will help you to make comparisons later. Some questions you can ask people include: Are you happy with your home? If you had any problems, were they fixed promptly and properly? Would you buy another home from this builder? Usually, people tell you if they are pleased with their homes. And if they are not, they’ll probably want to tell you why.
• Building your dream home can become a difficult process if your questions and concerns are not met. A reliable home builder will have a contact person available to answer all of your questions in any situation. Ask prospective homebuilders about their customer support process. Who do you talk to with questions when you visit your new home site? Is there a contact person for questions about the building process for your particular home? What is the customer service policy after you move in? A direct contact person during all phases will help you feel more involved and informed during your home building experience.
• Look at new homes whenever you can. Home shows and open houses sponsored by builders are good opportunities to look at homes. Model homes and houses displayed in home shows are often furnished to give you ideas for using the space. You may also ask a builder to see unfurnished homes. Also watch for the Annual Parade of Homes which takes place each spring in this area. And you can tour the Parade houses year-round on the web www.wilmingtonparadeofhomes.com.
• When examining a home, look at the quality of the construction features. Inspect the quality of the cabinetry, carpeting, trim work, and paint. Ask the builder or the builder’s representative a lot of questions. Get as many specifics as possible. If you receive the answers verbally rather than in writing, take notes. Never hesitate to ask a question. What seems like an insignificant question might yield an important answer. There should be a strong commitment to communication between you and your builder representative. Your builder representative should work with you throughout the building process. You must be able to relate your desires up front so that problems and delays can be avoided. Complete understanding of each other at all times will also keep unnecessary expenses down. If you do not understand what is going on, or what your builder is talking about, do not be afraid to ask questions. With the right approach, and the right builder, your homebuilding experience will be a pleasurable one.
“In today’s housing market, the real risk is in waiting to buy a home,” Girardot said. “We know that interest rates are low today. We know that home prices are leveling off and even declining in some markets. We know that there are plenty of homes on the market to choose from. We know that sellers are willing to negotiate. And we know that builders are willing to offer attractive incentives to get your business.”
You will find that the varied population, environments and building options available in southeastern North Carolina can offer a comfortable place for anybody. Once you get your house constructed, it is up to you to make this rich community a home.
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