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Need to Buy or
Sell a Home!
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Buying Unfinished Homes Maybe a Solution for
Jumpstarting the Housing Market
How to Go About Buying an Unfinished Home
By Mark J. Donovan
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With
a housing market that is still in the doldrums I may have just the solution to
jumpstarting the housing market. Back some twenty or so years ago builders were
willing to build unfinished homes for the young homebuyer. Building unfinished
homes was actually a fairly popular concept. Back then builders realized that
not everyone could afford a McMansion, a building theme that has seemed to
dominate the housing market in recent years.
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Builders were willing to build unfinished homes in order to make a living versus
trying to get rich quick by preying on just one or two home buyers per year. By
building smaller and less featured homes, or in stages, as such is the case when
buying an unfinished home, homes become more affordable and thus more buyers
begin to enter the housing market.
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In the past I purchased two homes that were
unfinished. The first was a builder spec home where the upstairs was left
unfinished. This type of new spec home was fairly common in the New
Hampshire area back in the 1980s. Many builders offered this type of starter
home to consumers. For me, it was a way to enter into an otherwise
overpriced housing market without having to go the route of a condo. |
It was an alternative that allowed me to
buy the framework of a big home at a reduced price, and most importantly
it allowed me a growth path to a bigger home as my income and family grew.
The second unfinished home I purchased I
actually negotiated with a builder who was building a development to not
complete the upstairs.
| Though unfinished
homes by definition are unfinished, they did qualify for occupancy
permits and banks offered mortgages for them. Typically in an
unfinished home the downstairs is completely finished and there is a
bedroom. The upstairs is shut off via a door at the top of the
stairwell. Insulation is either installed in the upstairs exterior
walls or in-between the first and second floors. Additionally,
depending upon what you negotiate with the builder the upstairs can be
partially finished. |
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For
example, internal wall framing can be completed, and/or rough electrical wiring
and plumbing can be installed.
From
a builder's perspective there are a couple of major advantages of building an
unfinished home for a wanting homebuyer. First, he has a committed homebuyer.
Second, his construction costs are reduced, thus reducing his borrowing
requirements. These are two extremely important facts when you are working in a
down housing market and a banking climate that is adverse to extending credit.
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Consequently, today's housing market is
ideal for approaching a builder on the construction of an unfinished home.
However be forewarned, some builders may still be hesitant to build an
unfinished home for a couple of reasons. First, buildable land is becoming
increasingly scarce. Second because the buildable land is scarce the cost of
it is high, and they may have paid a premium on the land back a few years
ago. Consequently you may find builders who are hesitant to build an
unfinished home because they want to maximize the amount of money they can
make on a piece of property. However, with the state of the current housing
market you may find builders now more willing to accept an offer to build an
unfinished home.
So if you have interest in buying an
unfinished home, check with your local builders and town building inspector.
You might get lucky, and who knows, building unfinished homes maybe a
solution that helps to jumpstart the housing market.
For help on building a new custom home, see HomeAdditionPlus.com's
New Home
Construction Bid Sheet.
The
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provides you with the knowledge on how to plan a custom home building project,
and what to look for when hiring contractors for your new home construction. It
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