For these last several months it seems as though all we’ve done is talk about house stuff. Ever since we started approaching our the end of our five-year plan for our current home we’ve spent countless hours pouring over house plans, comparing property sizes, researching covenants, getting rid of debt, and doing a lot of dreaming, and if we’re being honest, a lot of arguing, too.
And in the end, it all comes down to money. According to national surveys, it’s what couples fight over the most. And home buying is no different. Instead, you take all the stress of discussing finances and coming up with budgets and mix it with the stress of building codes and price per square foot. And it’s no wonder why couples joke about how they “survived” building a house. It takes a lot out of you. Literally and figuratively.
When we first started thinking about buying property and building a home we were dreaming in total innocence and naivety. We had always heard that it was “cheaper to build than to buy.” Well, not in this neighborhood. Here in Alaska it’s actually the same price, if not more to build than to buy. The cost of construction has gone up considerably, the price of land has increased as large parcels come few and far between, and it seems like everyone is moving away from Anchorage and coming to the Mat-Su Valley. We knew that last one and were counting on it when it came to selling our home. The house had appreciated so much that we stood to make $60,000 above what we had paid for the house five years ago. The only thing is that also meant that every other house had appreciated, too. Yeah, that didn’t sink in until we started looking and realized that our budget from five years ago would buy us a shoebox today.
Yes, the bank would approve us for well over the number we had in mind, but we’ve worked hard to get debt free and really didn’t want to overburden ourselves, instead, we wanted to be in a position to pay off the home early. Something that simply wouldn’t be possible if we were on the hook for a half a million dollar home. Some of the best advice I can give when it comes to home buying is take whatever the bank approved you for, subtract 25% and go with that number. You’ll thank me later.
We’ve been looking at floorpans this entire time and settled on a few that we really liked and found similar ones offered by a local contractor. We sent over the info to our realtor and she set up a walk-through with the builder so we could tour one of their current builds and go over any questions in person.
Oh, what a wake-up call that was!
Have you ever walked into a restaurant and as soon as you looked around you thought, “There is no way I can afford to eat here” ? This was like that, except with a house.
Everything screamed “high-end”. Marble this, custom that. Tiles that cost more than all the flooring in my home combined. We had complete sticker shock and were trying our best not to look like the country cousins come to call. The builder was very gracious and walked us through everything, letting us know we could go with a smaller budget and where we could cut corners. Even so, that house was easily 3x what we were looking to spend, if not more. But we thanked him for his time and said that we looked forward to getting his estimates. (Yeah, those arrived a few days later to the tune of $487,000 for the smaller house.)
With that option off the table I went back to researching and contacted another builder who seemed to do more “normal” houses. This time when I sent over the plans I was told, “Yeah, we can’t build that for that price.” Instead, it would be about 50% more expensive than we thought. So, back to the drawing board.
I spent the next week researching designs and price comparisons and which shape was the most economical to build (the rectangle/square in case you were wondering) and finally came across a post by Karrie over at the Happy Money Saver which was all about how to save money on your house design, which included a copy of her floor plan. I loved the simplicity of it and used it at the inspiration for our floor plan:
I sent that plan over with high hopes and great expectations. It’s a square, it’s simple, straightforward. No juts or anything that will drive up the price. Simple finishes. Hey, we might even come in under budget!
Nope. Still expensive. Turns out that going with a simple floorpan will save you some money, but we’re talking thousands, not tens of thousands.
The builders are quoting us an approx. price of $150/sq ft (more/less depending on complexity of the design) which translates to an 1800 sq ft house with a 2 car garage and a 2-5 acre parcel of land for our budget of $320,000. And that would be a home we love that can serve us well for many years. But it also means a lot of headache, heartache, and waiting in the meantime. Plus, all the risk of going out for land + building a home without selling our home first, so there’s that, too.
From the beginning we’ve said that we won’t move just to move. We want to move for something better. Better land and better house. We currently have 1500 sq ft with a 2 car garage and a .19 city lot, so the above would be a big improvement, but would also be $135,000 more than what we bought our home for. And if we were to put all our equity into that we’d still be out and additional $75,000. And I just don’t know if +300 sq ft and a few acres is worth that?