WHY BUILD NEW?

So you've decided to build a house! YAY! How exciting, but what should you consider before beginning this fun journey?

Over the years we have built 5 houses, toured countless show homes and have truly fallen in love with the process of building a home! Back in 2005, before we were even engaged we decided that we should start saving to buy our first home together. Part way through this saving process we saw an ad for a home builder saying "why buy used when you can build new?" and they showed a house that you could build for LESS money that the 30+ year old houses we had been looking at! We thought it had to be too good to be true so we went to the show home to find out more. At that time it really was cheaper to build new! This started us down the road of building and moving.

So why should you build new instead of buying an existing house?? (I'll be honest if you are house shopping in Regina right now, you should probably just stop reading this and consider buying my house! LOL)

*You get exactly what you want!

*You can tailor the layout for your family (ie open concept, main floor office etc).

*New homes are more energy efficient, you can save money on utilities!

*It's an adventure! (There's nothing like ordering a pizza and having to walk down the street to meet the delivery driver because they won't drive down your unpaved street.)

*You can MAKE money! In the right market conditions you can build a house for less than buying an existing one. This was what fuelled us to build 3 houses in 3 years!

Questions you should ask yourself before deciding to build:

1 - Should I sell my current home before signing a contract to build?

Depending where you live and what you are trying to sell it might work in your favour to sell your house before starting. This way you have a solid budget and fewer time constraints while building. Be sure to talk to a realtor and get the numbers before you agree to anything with the builder!

Our custom 3 story staircase, open to below

2 - Do I want a fully custom home, a spec home or something in between?

Each builder has a specialty. If you are starting out, a builder that primarily builds spec homes might be perfect for you. By working with a stock plan and preselected finishes in a design centre you can save yourself a lot of stress and money. These builders won't move walls or let you make design choices beyond the board (hello builder beige) so if you need something slightly more custom be sure to ask the sales centres what they can do for you. A fully custom home is just what it sounds like, there are no pre designed floor plans or design selections, you will be sitting down with the draftsperson and fully designing your home from the bottom up! There are also plenty of builders who will tailor to your needs offering plans to work from, make minor changes and let you select your own finishes so be sure to shop around!

Seasonal improvements include stucco, driveways and final grade

3 - Am I willing to live in a construction zone?

If you are building in a new development be prepared for mud! Driveways, sidewalks, stucco and sometimes even the street are all completed seasonally and even after you have a driveway the mud and mess from other build sites will be caking your streets for months (or years). Depending on your city there may be rules on when you can or cannot develop your yard. I have seen neighbourhoods in Kelowna that require landscaping completed within 6 months. In Regina we couldn't construct a fence or landscaping until we received the surveyors certificate which can be a lengthy wait!

4 - What will I need for financing the build?

Depending on the builder you may require a completion mortgage or a builders mortgage. A completion mortgage works like a conventional mortgage where the builder will get paid once the house is complete. A builders mortgage will take out construction draws throughout the build when they reach specific completion points. Some builders may cover the interest on the construction draws for you, while others may require you to pay the interest. Be sure to find out which kind of mortgage you will require before sitting down with your mortgage broker.

A fully custom kitchen always includes surprise expenses!

5 - How much should I set aside for extras?

When setting a budget for the house you have most likely already considered the expenses of the down payment and closing costs but when building new there are always little extras that pop up! In the past we have had to pay for most upgrades out of pocket (meaning they don't go on the mortgage) so it's good to plan to keep some cash on hand. Also create a budget for the other things you will need to purchase once you move in. Over the years we've had to add in the expense of sealing the driveway, buying appliances, window coverings, building a deck and landscaping. Another forgotten cost is land taxes! In Regina you will start paying property tax when you move in but when the bill is only for $50-100 you can bet that it's not accurate (you're only paying for the tax on the vacant land)! Once you have moved in they will send out a person to do a tax assessment (this can take awhile) and you will have to complete catch up payments due in December of that year. It's a safe bet to look up similar houses in your neighbourhood and guesstimate how much you should be paying then set this aside in a savings account.