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Old 07-14-2020, 05:27 AM   #21
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I wouldn't do it, but not for the reasons you specify.

I just could never spend 7 figures on a 5000 square foot house for 2 people. I would consider that a huge waste of money.
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Old 07-14-2020, 05:43 AM   #22
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My opinion is different than the others. I cannot judge whether you are spending too much on a home unless all of your assets and income are analyzed so I pass no judgment. If "you can afford it" I see no problem in building a 5000 square foot home or even a 10,000 square foot home.

One thing you need to ask yourself is whether this home will ever be sold. If not, then does it really matter if you would lose money on a sale?

In my opinion we are only on this earth so long and it is important to enjoy your time here. If you can afford it and it will bring you joy go ahead. We have built ourselves five homes so far (I am 60). For us, our homes bring us joy.

Regarding building, I provide this advice which you are free to ignore:

1. Bid the job. Send the architects plans and specs to multiple builders if you can. If you are buying in a development with only one builder you do not have this ability. However, then his price is somewhat dictated by the market.

2. Pay very close attention to the specifications of the house. God is in the details and you must evaluate every item that is included and is an option. Understand what you are buying. This is necessary and time-consuming. For example how many paint colors are included and what is the cost of an extra color?

3. Despite our experience and best efforts, we always add 20% to the final bid for options we may later choose and changes we might request.

4. Don't forget the cost of Builders All Risk Insurance, Furniture, floor covering, wall covering, design costs, permit fees, etc.....

5. Try to get the builder to agree in advance for the cost of options you have not yet made a final decision on. Once you pay him, he has you and has no incentive to keep costs down on an option. Perhaps agree that options will cost 10% above his cost and have him provide receipts.

6. Understand what the builder/GC is building himself or hiring a subcontractor to complete. Some GCs sub out the entire job. We stay away from those builders because we want our GC onsite.

7. If you will not be at the site a few days per week, have the builder install cameras so you can see what is being done (and not being done) each day.

8. Make your payments coincide with work that is done and in place. Don't let the GC get too far ahead of you. Be careful of the size of the first few payments when nothing is done and he has your money.

9. Understand what it will cost to maintain your home including what real estate taxes will be after construction.

10. Perform periodic title searches to confirm no contractor has placed a mechanics lien on your property. Require the GC to sign lien waivers. If you need to spend a few thousand dollars on an attorney to help you then go ahead. A small price to pay to avert a big headache.

The above are just a few concepts. We have three homes each larger than the one you are contemplating. Our family and particularly our children enjoy visiting them. We cannot think of a better way to spend our money which we understand differs greatly from many on this site. I just wanted to provide the other side of the argument. All the Best.
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Old 07-14-2020, 05:49 AM   #23
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We just sold our 5200 square foot home in March and downsized to 3905 square feet with a triple car garage. But the cost of this 12 year old house in like new condition was only 20% of what you're proposing to spend in PA.

Unless you've ever built a home and have a great contractor, I would never suggest anyone take on such a large project--especially in these times. Such building puts a strain on marriages, too.

We're very fortunate in the South to have homes available for very favorable prices. We're still in a cost basis market versus a demand driven market as far as prices go. And it's also nice to be out in the county where property taxes are only $1100 per year.

We would only consider purchasing a house that's already built. Fortunately we're cash buyers and can wait for a fair price on any home purchased.
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Old 07-14-2020, 06:26 AM   #24
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I'd sell the land and put it towards another home in a more tax friendly state when you are ready. Having downsized from a big mega-mansion to 2400 sq ft, I can appreciate those that like a bit bigger house, but I do not yearn for 5K ft2. My only complaint about our current home is the lot is too small and so is the garage. If I could double the size of both of those, with one additional large closet, I'd be a happy camper.
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Old 07-14-2020, 07:10 AM   #25
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I don't know what size home you would be leaving but plan on spending a bunch of money decorating and finishing the inside of the new house.

Does you build number include landscaping?
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Old 07-15-2020, 10:08 AM   #26
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A coworker in his 50s built his "retirement home" last year - a 2500 sq ft ranch on a slab. It was a miserable experience. Constant delays, major cost overruns, and nearly a year of revisions after they moved in (warranty claims) - including having to redo 1/3 of the laminate flooring because of damage during appliance delivery. He likes the house now but it was a stressful couple years for him.

It's crazy to think my parents built their 2000 sq ft home in 1992 and the contractor got it done <6 months, on budget, and there was not a single issue that required them going back to the builder afterwards. Times have changed around here.
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Old 07-15-2020, 10:27 AM   #27
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.... It's crazy to think my parents built their 2000 sq ft home in 1992 and the contractor got it done <6 months, on budget, and there was not a single issue that required them going back to the builder afterwards. Times have changed around here.
Ditto for us in 2010-11. Demolished in late October and moved in in early May but could have moved in earlier but chose not to... on budget and no problems since.
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Old 07-16-2020, 01:18 AM   #28
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I have twice (yes, twice) worked on plans to build a home on land we owned. Both times I backed down and didn't do it and sold the land.

We most recently (2 years ago) bought a 30 year old house that had had some renovations. We then spent a lot of money on a 6 month remodel. If I had it all to do again...I would do the same thing. So general comments:

1. I don't care what quote you got on the cost to build a house...it will be more. Stuff happens that will add to cost. In our 6 month remodel (very expensive) we actually didn't have major things go wrong. But, it still cost more than I thought it was going to. Some of it was DH and I making changes but it was still more money. However, this extra cost happens much more with houses you build. We once bought a house when it was at the framing stages and there was so much that ended up costing more.

2. More possibility of things going wrong. I can't tell you the number of things I have seen go wrong with new builds. The contractor can go broke after you have paid them a lot of money. Even if you haven't, it always cost more to bring in a new contractor to finish work someone else started. Or, they make a mistake with the foundation which you don't even know about until you have moved in and the foundation fails. Or, so many other things that can go wrong.

3. You get more house when you buy an existing house. On our last time we had plans done I shelved the idea when I realized I could buy a 5 year old house for $100,000 less than I was going to pay to build a smaller house and the new house would have the land with it and I could still sell the land that I wasn't going to build on. Basically building from scratch was just adding so much cost.

4. I like what we did this time. Bought a house that was good and had had some remodeling but I could remodel it to my taste. That has, so far, worked great for us.

5. If you absolutely want to have everything 100% new and exactly as you want it then bite the bullet and build. I would personally only do it for a house I plan to be my final house (absent serious illness, etc).

6. 5k SF? I once had a house with 4500 SF and there is no way I would want to have that now. We are happy now with a 2400 SF house. I could maybe stomach 3k (what we had in our last house) but even that is larger than I need now. If I had a 5k house then I would have to hire someone to clean it every week and I don't want to have to pay for that. Cleaning smaller houses is easier and much less expensive.
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Old 07-16-2020, 05:30 AM   #29
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My wife, and I are swimming in our 1700 sf farm house after the kids left, I can't imagine a home three times that amount. We have never been ones to entertain, or have stay-over guests, so that isn't a consideration for us.

I would stay away from big expenditures in this uncertain economy, (we haven't seen the true fallout from Covid 19 yet). You may have real problems with finding, and keeping an honest contractor who can hire willing workers to complete the job in a timely, and quality minded manner.
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Old 07-16-2020, 05:35 AM   #30
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I have that dream once in awhile to build again. I know I most likely won't because of my age. If I did build another home I would do the building with the help of a few contractors doing certain parts of the project (plumbing, electrical, shingles). Not that I couldn't do them myself but it is the time thing and becoming totally wore out from building a home.

I'm still living in the home I built from the ground up in 1984. I started in March and was living in it second week of June.

So, my advise unless you are doing most of the work, I wouldn't be building a home that big with a contractor. I think both of you would be a wreck before the home got built. I also know that having a dream and going through that process could be fun and yes, you could sell it.

Good luck.
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Old 07-16-2020, 06:05 AM   #31
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I could afford 5000 SF house. However house of that size looks to me more like huge headache than pleasure.

I would rather spend that budget on livable smaller place in some gorgeous location like Boulder CO. Quality VS Quantity.
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Old 07-16-2020, 06:12 AM   #32
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Going into the Fall/Winter of 2020, I wouldn't start building a house. A framed-up but not dried in house is the perfect home for a murder hornet infestation..... not to mention a meteor magnet!
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Old 07-16-2020, 06:27 AM   #33
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OP could be right in that he/she could lose money in building a huge home now and selling a few years down the road. If I were OP, I would not build now if there was a chance that I would want to move in a few years. Unless you are definitely sure of your future plans, wait until you retire and see how your life is going at that point before making the build/no build decision.

I would like to build again. I built in 1984 and our current house in 1994. Did most of the work on both myself. It was the only way that we could afford what we wanted and get the house exactly as we wanted.

But we are at a crossroads similar to OP. I don't want to build now if we plan to move in a few years. And I've looked at hundreds of houses - none are exactly what we want. So we'll wait until our future lifestyle plans firm up and/or we find the perfect house and location.

As for as the financial aspects - I don't see a house as an investment. So I'm not concerned about making or losing money on a house. I just want to live in it comfortably. That said, I certainly would not build or buy a house that was bigger or had more bells and whistles than what we need. No use spending more money for space or amenities that we don't need.
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Old 07-16-2020, 07:19 AM   #34
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OP - it's almost a 100% certainty that you'll never be able to sell the new house for anywhere near what you paid to build it. New builds are WAY more expensive than existing homes, and that's what you'll have when you go to sell it - an existing, previously lived in home.

If you're ~5 years from retirement, why on earth would you want to build a 5,000 sq ft home? It'll take you at least a year to build..a year or two to "finish" exterior (landscaping, sod, sprinklers) and interior (window treatments, decor, etc). That's 2-3 years minimum..and then you're retiring 2-3 years after that and in a 5,000 sq ft house?

Unless you have a personal staff of house cleaners, maids, butlers, pool boys, gardeners, etc, taking care of a 5,000 sq ft home is likely not something you're going to like doing once you retire. We have 3,600 or so sq ft today and the single biggest mistake I made in my ER plans was to not ALREADY be in our retirement home..because the ongoing maintenance, property taxes, and just plain care of 3,600 sq ft is a giant PITA. Something is always needing attention. And the very high MI property taxes are an ongoing drain on my limited piggy bank. I'm guessing you have the same in PA. (To that point..have you estimated your property taxes on that 5,000 sq ft mansion? That to me is a bigger consideration than even the house cost, because it's an ongoing drain on your assets every single year).

We've also been looking at building, but in this case it would be our "forever" / retirement house. Probably somewhere between 2,500 and 2,700 sq ft. But the cost here in MI is (to us) excessive at ~$250 / sq ft. Our initial budgets put the total cost of land + house + sprinklers + landscape + deck/patio + septic + well + interior finishing at well over $850K and quite possible $1M. For a 2,500 sq ft house. That's really tough to stomach. But the ongoing property taxes at ~$12,000 / yr is an even bigger consideration as that's $240K additional over the next 20 years even..and $360K additional over the next 30 if we live that long.

Good luck in whatever you decide to do..but if I were you, there's no way on earth I'd build a 5,000 sq ft house in the current topsy-turvy world we live in let alone 5 years or so from retirement. You're very likely to never recoup your investment and will probably lose a good chunk of $$ - not to mention the ongoing property taxes.
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Old 07-17-2020, 09:29 AM   #35
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OTOH.. we've been in the west for many yrs now. Originally from Ohio, obviously next door to PA. We've built several times, all aspects, so know what to expect. If your competent being the general, I'd hire competent builders from someplace like Ohio or ?? I'd have no problem bringing contractors in from elsewhere. We know of excellent contractors in Oh that would be 50% under what contractors where we currently live would cost. We'd never use anyone here to plant a flower let alone build a home. Yrs ago we brought in a well driller from several hundred miles from the mt site to put in a well. His cost was $21-ft. Local drillers to the site was over $50-ft. The locals wanted a 2 acre pad cleared. The guy I brought in asked where I wanted it, I told him, he backed up and put in a $30k well. He did an excellent job! His travel and all expenses and well were a HUGE savings over the local drillers that had been fleecing ppl for yrs! But we have no problem doing things differently than others. Cost savings might make your decision a little easier?
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Old 07-17-2020, 09:49 AM   #36
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My suggestion would be to sell the land and wait until you have been retired for at least a year or two, before building or buying a retirement house. By then you will have had a chance to adjust to retirement to some extent, and I think you'll have a much better idea of what size of house (and in what location) you would prefer for your retirement years.

For many the reality of retirement is a bit different from what was expected, even though I think most people here love being retired. For example, we thought for sure we'd move to another state once we were retired and could do so, but much to our surprise we decide to stay.
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Old 07-17-2020, 09:52 AM   #37
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Looks like the OP has flown the coop. The OP on this thread was last post.
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Old 07-17-2020, 09:54 AM   #38
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My suggestion would be to sell the land and wait until you have been retired for at least a year or two, before building or buying a retirement house. By then you will have had a chance to adjust to retirement to some extent, and I think you'll have a much better idea of what size of house (and in what location) you would prefer for your retirement years.

For many the reality of retirement is a bit different from what was expected...
+1

One of the best bits of retirement advice I got prior to pulling the plug was not to rush into any big changes until after being retired for a while. I believe the wording was along the lines of "Best to wait until you've had a chance to see what you really want to do when you grow up."
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Old 07-17-2020, 10:37 AM   #39
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Looks like the OP has flown the coop. The OP on this thread was last post.
He probably didn't like the advice he got.
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Old 07-17-2020, 11:01 AM   #40
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That's what I was thinking too.
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