Getting a new home is an all-American dream. And more importantly, building a summer house from scratch is the ultimate all-American dream. However, there are various things you should do to make sure this dream will not turn into a nightmare. When you do your due diligence, you can make sure that you are by boat marina. Thus, the following includes wise ways to build the best vacation house on a budget:
1. Finding the Right Area for Your New Home
It is important to choose the right area for your new home to be built. There are great acres of land by beaches with a boat marina. There are also wonderful areas that are close to great restaurants, like Italian food restaurants, grocery stores, and more. So, doing your due diligence will go a long way in finding the right area for you especially when it comes to areas where there are low crime rates. And in doing your due diligence, you will find the best area for the best price.
2. Find out the Mortgage Rates
Sometimes, there are great times to get a mortgage, and sometimes it’s not. If the economy is as bad as it was in 2008, for instance, then you may want to wait to get that loan for building a summer house from scratch. Also, you will still have to deal with a construction loan even though it takes time to build a home. It is critical to stay abreast of the rates and lock in a mortgage during an optimal time.
3. If You Have a Home, and You’re Selling It
If you already have a home that you want to sell, there are different things you should do to remain on budget. The following includes what you should do:
- For Sale by Owner (FSBO): Selling Your Home With no Realtor
You should sell your house as a For Sale By Owner (FSBO) property. Doing this will allow you to save from paying a realtor’s commission which is typically 6%. When you sell your house without a realtor, however, please note that it may take a longer time to sell your home than it would with a realtor. This is true even if your house is in a more desired neighborhood, and you have the “For Sale” sign on your front yard.
- Hiring a Realtor for a Discount
If selling your home on your own is not good for you, there may be a realtor you can hire for a discount. You can search on some reputable sites that have MLS listings where a real estate agent can see your house. You can go to the search engines to find these sites, and your commission fee could be as low as 2.5%.
4. Get a Home Insurance Quote or Re-quote
Getting a house insurance quote before building a summer house from scratch will let you know how you can budget your money. This is true if you are getting a re-quote for the home you already have. You may be surprised if your home insurance may be lower than it is now. Otherwise, it is still good to know, so you can budget accordingly.
5. Retaining a Contingency Plan
If you are getting a second loan, it will behoove you to get a backup plan to prevent a possible catastrophe. You can do this by finding some real estate investors who are willing to pay you routinely, like monthly or quarterly. This extra money will help you financially with your mortgage payments until someone finally buys your old home.
6. Find a Professional Architect
When it comes to getting that home of your dreams, you must make sure you work with a professional architect or general contractors. It is so important that the architect has experience in doing various types of designs. He/she must know how to have your home face the nearby lake with the boat marina. He/she must also have the know-how about electricians and, if you want one installed, fence installation services.
The right builder must be experienced and professional, so he/she can competently work with residential solar power, have your home positioned accordingly to the boat marina, residential solar power, etc.
7. Putting in Your Bidding and Securing an Agreement
Whether it is kitchen remodeling services, or anything else, it will behoove you to put in your bids to ensure you negotiate and get the best value for your dollar. If you don’t, you can easily run through your budget. So, you must ensure you have great communication to ensure everything is intact.
8. Research to Obtain a Good Banker
Find the right banker is also imperative before building a summer house from scratch. When you have the right banker, your banker is the instrumental piece that can save you tons of money at the beginning as well as thousands of dollars of interest over the lifetime of your mortgage. When we first started building, 30-year mortgage rates were around 4.5%. I was drooling and stressed that rates would shoot up.
By the time that we were 30 days to completion, we were able to lock in our rate at 5%. The whole time I was in constant contact with him (and I mean constant) making sure we pulled the trigger at the right time.
Unfortunately, we were a bit premature and rates dropped a bit. Luckily, we were able to re-lock in our rate at 4.875% by going through a different lender, and we didn’t have to pay an additional cost.
9. Negotiating the Construction Loan
Most builders are going to want a sizable down payment (usually around 10%) and will constantly be feeding you invoices to hand to your bank. To our luck and amazement, our builder only required a $5k down payment (which we paid cash), though here are some tips on taking out a personal loan from a bank if you need to go that route.
In addition to that, he wasn’t constantly hounding us for more cash. In fact, I can remember my banker making a comment of how impressed he was that our builder had only received 40% of the construction loan when our house was over 80% complete. A rough calculation had us saving $4-$6k of interest because of this. Not bad.
10. Use Online Stores that Offer Free Shipping
The cabinet hardware quote from our kitchen specialist was $450. We were able to buy the exact cabinet pulls on eBay for $135 with free shipping. We also bought the bathroom vanities that come with the whole package: vanity, top, sink, and faucet. By buying on eBay, we were able to get a cheaper price, free shipping, and were able to ask the seller for a discount.
In both cases, the eBay store owners gave us discounts: $75 off on one and $195 off on another. Proof that it never hurts to ask!
11. Instead of Retail, Search for Online Wholesalers
We were able to buy a $6,000 front door for $2,300 unfinished, sent straight to our house. ($3,700 in savings!) We just needed to find somebody handy to help stain it. Luckily, my father-in-law is as handy as they come. If you’re not as blessed and don’t have a handy family member, ask friends and coworkers, and I’m sure you can find someone to help stain your door for a few hundred bucks.
12. Purchase Lighting on Sale
My wife knew what lights she liked, and she bought them from a few different places. Compare prices and buy from the place that gives you the best deal for building a summer house from scratch. She searched the Sunday paper flyers and compared Home Depot, Lowe’s, and Menards’ prices. At least one of them had their lighting on sale when we needed it. Don’t forget that you can usually find a discount lighting store online that will beat any home store price.
Example: The chandelier that she wanted, out of the local distributor’s catalog, was $873. By searching online, she found the same chandelier on clearance for $174.99. It gets even better. See the next tip.
13. Obtain a Little Help From Your Family/Friends
Have friends or family that can save you money building your home? We were fortunate to have friends that did our house plan (architect), kitchen and bathroom countertops, and cabinets. Just to make sure we were truly saving some money, we also bid out the cost and confirmed that we saved a significant amount.
Are you afraid to get your hands dirty? If so, you may want to skip this section on building a summer house from scratch. If not, dive right in and start sweating it up. Use your own skills (or find someone that has skills) and do some labor on your own. Again, with a handy father-in-law, we were able to tile the custom shower, hang the siding, install the kitchen cabinets, and install all the hardwood and tile floor on our own.
14. Use All Your Tax Credits
Congress has passed many laws recently that are favorable for many homebuyers and home builders. The most recent update to the first-time homebuyer’s tax credit would have given us a $6,500 credit.
15. Collect Boxes
Collecting boxes instead of buying them goes a long way in saving money. This just as important as the boat marina, kitchen remodeling services,
16. Figuring out Furniture you Need Beforehand
Whether it is a new mattress, or splurging on unique glass accessories, you must find out firsthand what your furniture will cost to work accordingly with your budget. This is just as important as local movers.
Conclusion
Getting a new home is an all-American dream. And more importantly, having your new home built is the ultimate all-American dream. However, there are various things you should do to make sure this dream will not turn into a nightmare. These steps are:
- Finding the Right Area for Your New Home
- Find out the Mortgage Rates
- For Sale by Owner (FSBO): Selling Your Home With no Realtor
- Hiring a Realtor for a Discount
- Get a Home Insurance Quote or Re-quote
- Retaining a Contingency Plan
- Find a Professional Architect
- Make Sure Not to Hire the Wrong Builder
- Putting in Your Bidding and Securing an Agreement
- Negotiating the Construction Loan
- Use Online Stores that Offer Free Shipping
- Instead of Retail, Search for Online Wholesalers
- Purchase Lighting on Sale
- Obtain a Little Help From Your Family/Friends
- Do Some DIY
- Use All Your Tax Credits
- Collect Boxes
- Wisely Compare Movers’ Prices
- Figuring out Furniture you Need Beforehand
These steps are a process that takes time. However, anything worth having is worth fighting for and timing. You won’t have to worry about having a nightmare.