Mistakes to Avoid
Do Not Purchase based on Cost per Square Foot
The common question of asking how much a home cost per square foot is
not an informative value and is often misunderstood. An example is like
asking how much floor covering cost is per square foot. Without
specifics, you may receive a price quote for inexpensive linoleum tiles,
however your expectations are for ceramic tiles. This is one example of
the hundreds of variables that will affect the price of your project.
Certainly, you will receive a quote for the cheapest flooring material
just to get the sale. The same misconceptions are true in home
construction. Floor plan costs vary greatly due to the differences that
are unique to each home as a result of the quality of construction. A
lower cost per square foot home is due to a lower quality construction
and material used in the home and the reason why the cost per square
footage cost can be a very misleading number.
Do Not Purchase from Modular Home Retailers who are Not Licensed
Builders
The majority of modular home sales centers are only licensed to sell
homes, and are NOT licensed builders. As a result, there is a tendency
to underestimate the total cost that includes the site work required to
prepare the land for your home. Dealers give the homebuyer the illusion
of a low price, not only because they don’t have the experience of the
actual construction costs, but also because they want to sell you a home
and send you on your way. Modular home dealers who are not licensed
builder do not have the expertise to provide a cost estimate for a
foundation, well, septic, driveway, tree clearing, land excavation and
all the others costs to make sure your home is properly built.
Do Not Act as your own General Contractor
(Click here for a classic
example)
Perform a risk assessment before you act as your own general contractor.
An assessment will help you understand the risks involved if you choose
to act as your own general contractor. Compare the savings versus the
risks involved if something goes wrong. Understand that a subcontractor
is only responsible for their specific part, not the entire project.
Here are some important things to consider:
- Do I know all the building codes and permit requirements to build a new home?
- What are the industry standards for quality and workmanship?
- Can I afford the time required each day to oversee the project properly?
- Will the subcontractors make my project a priority over other jobs?
- How do I deal with schedule lags in my project?
- How can I estimate a fair price for the work contracted?
- What are the costs for liability and risk insurance policies?
- What do I need to know about subcontractor insurance?
- What is the timeframe that I need to get each phase completed?
- What documents are required by the bank, title company and appraisal inspectors?
- Can I afford the risk if a subcontractor does not uphold his contract?
- Is it cost effective to forgo any warranty to act as the general contractor?
Be an educated buyer and confirm everything that is included in the price. If you are unsure, do not be afraid to ask what is included in the price. If the price only includes the house, then you must price out the home preparation work. The entire home cost should also include the excavation, septic system, foundation, electrical, mechanical, permits, well, and other necessary prerequisites before you take delivery of your home. Obtain a complete detailed list of the items included from your home retailer. Review everything on the list so that your home will be built to the quality level you expect and includes all the necessary items to complete your project.
Know the difference between Modular vs. Mobile Homes
Understand the difference between a modular home and a mobile home built to modular specifications. The differences can affect the price of the home and its resale value, as well as the finance costs. Some mobile home manufacturers are building floor plan designs to meet the higher standards of modular BOCA building codes, instead of the standard HUD codes that apply to mobile homes. These homes are priced less, however there are differences in the quality and design of the homes that homebuyers should be aware of before purchasing these homes. These mobile homes are generally one-story and are designed to go on a crawl space therefore the heating system does not have the capacity to heat a basement area, and the structural integrity does not have the same quality as a BOCA modular home.
