Budget/Financing


OSB vs. Plywood

OSB vs. Plywood


Posted By on Oct 14, 2013

Lately, a lot of people have been asking whether we use Plywood or OSB Sheathing.  Our answer is both, but this inquiry has caused me to be curious about the benefits of Plywood vs. OSB.

In this video, Matt Risinger discusses the differences between the two products.  He also explains how he uses the products in the homes he builds.  His application is not relevant in our use of modular technology for two reasons: 1) Modular homes have a much shorter window of opportunity for weather exposure before button-up and 2) Modular homes must be built on a crawlspace or foundation not slab on grade.  Even with these two distinct differences in our construction applications, the information Mr. Risinger discusses is valuable.

Link to Video: OSB vs Plywood Sheathing – or Both?

Further Research:

Product Pros and Cons: OSB v. Plywood by Builder Online

OSB vs. Plywood by Int’l Association of Certified Home Inspectors

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You can feel the energy in the housing market.  There are MANY potential new home builds just on the verge of happening, but customers are waiting…. wondering if now is the right time to build.

Well, all indications are saying there isn’t going to be a better time to build than now!

  1. Home values are increasing with each day that passes.  This means, from the moment you sign your building contract, your home value is appreciating!  You are building equity into your home even as your home is being built.
  2. Building material expenses are going up.  Sign your building contract TODAY, tomorrow it will be more expensive to build your home…
  3. Mortgage rates are stable, but they are slowly creeping up.  The rates are not going down, the best rate is the rate that is available today.

New-home sales rise 2.1 percent in May by Housing Zone.

Housing Market Shrugging Off Rise in Mortgage Rates by New York Times.

Builders and Lumber Dealers Both Report Shortages of Key Materials by NAHB

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Buying vs. Building

Buying vs. Building


Posted By on Jun 27, 2013

How do you decide between purchasing your home or building your home?  It is up to each family to weigh the factors of each option and decide which will be the best for their situation.  This blog has been written to give you a clear understanding of some of the pros and cons of each options, as well as some tips to make either process move smoother.

Buying a Home

Pros:

  1. Purchasing a home is quicker.  Typically once an offer is accepted by the seller a closing can be scheduled within 2 months.
  2. You can see and touch the home.  Walking through a home is much different than looking at plans.
  3. Landscaping is mature. The lawn is ready for the swing set. The shrubs along the front of the home or edge of the road are full.
  4. The bargain.  Buyers can usually find a great deal, especially in the current market.

Cons:

  1. Sellers don’t always disclose the full reason they are moving, such as the 2 am train knocks the glasses of the shelves or the neighbors throw wild parties with fireworks every weekend.
  2. Older homes are not as efficient as newer homes.  They are not as well insulated and tend to be harder to heat.
  3. When you buy a 10 year old home, you are also buying 10 year old systems and fixtures.  Appliances, boilers, fixtures and some building materials have an expected lifetime.  Replacement costs can add up quickly and start much sooner than the homebuyer may anticipate.
  4. Many of the homes currently on the market are foreclosed properties.  These properties are not always properly maintained during and after the foreclosure process.  Homes do not withstand neglect well, especially in upper New England.  One winters worth of no maintenance, possibly no heat or electricity, is a lot of wear and tear.

Tips for a smoother buying process:

  1. Higher a reputable home inspector.  This person is worth their weight in gold, if they can inform you of issues before the closing.
  2. Ask your realtor lots of questions about the home you consider.  Age of appliances, systems & fixtures.  How long has the home been empty if it is a foreclosed property.
  3. Require that all systems be operating during the home inspection.

Building a Home

Pros:

  1. It’s your home.  Your plan, your design choices.
  2. All systems, fixtures, materials & appliances are new.  They meet all current safety and energy standards, and should carry the full warranty.
  3. Lower energy and maintenance cost.  Even if you aren’t building a home specifically designed for high energy efficiency, new homes continue to become more and more efficient as new products and materials become available.
  4. The majority of new homes are being built in developments, this means you may be building with a community of new homes.  Many developments have strict guidelines about the types of homes allowed and what maintenance is expected.  This ensures the homes around you will be of similar value and well maintained helping to keep home values steady.

Cons:

  1. Not being able to see and touch the home during the sales process can be difficult for some prospective homebuyers.
  2. Cost overruns.  Building material prices fluctuate, this can cause the cost of your home to rise during the building process.  There is also the risk that not all materials are accurately reflected during the sales process.  For instance, homebuyers may think they are getting a beautiful dining room light, but the builder put the cost of the dome fixture into the cost.
  3. Delays.  The building process spans over several months with multiple contractors involved.  Without a clear plan, delays are inevitable.

Tips for a smoother building process:

  1. Higher a reputable general contractor to oversee the entire building process.  Having one company responsible for all aspects of the construction from excavation to interior paint, will make the process smoother and eliminate stress on the homeowner.
  2. Ask questions during the sales process!  Visit construction sites, talk with previous customers.
  3. Always get written quotes, never agree to build anything based on an estimate.  Discuss with potential builders what their policy is on cost overruns and construction delays.  Without a clear policy, the cost and completion date of the project will never be met
  4. Read the building contract.  The contract should clearly define who is responsible for all aspects of the building process.

Hopefully this information will help you make the right decision for your family.  For more information check out these links:

Buying vs. Building by AskMen

The Financial Considerations of Building vs. Buying by Investopedia

Building a Home vs. Buying a Pre-Existing Home by GoBankingRates.com

As a final thought, I will leave you with this:  Everyone has heard the old adage “Live and Learn” meaning as you live your life, you learn from your experiences… Now let’s briefly consider homeownership options.  Approximately twice as many first homebuyers buy their home as those that build.  However, with each change in homeownership this ratio decreases with more homeowners choosing to build their second or third homes… Retirees are now one of the largest demographic building their homes.  Food for thought.

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Green Home Appraisals

Green Home Appraisals


Posted By on Jun 4, 2012

I just stumbled across this article, which is a great follow up to my blog from last week.

We have all heard the woes of getting homes appraised.  These difficulties are even higher for new homes, and homes that incorporate green products, concepts and designs face the most hurdles of all.  This is due to the higher cost of green products and systems that are being compared to standard products in a depressed housing market.

This article is written with builders as the target audience.  But it is a great resource for anyone interested in building a green home.

Appraisal Tips: Getting the value of a Green Home

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Housing Market Outlook for 2012

Housing Market Outlook for 2012


Posted By on Jan 6, 2012

I’ve spent the past few days reviewing the 2012 housing market projections.  Most of the sources are saying the same thing.  2012 will continue to be a bumpy road…

Good News for the market: mortgage interest rates continue to be at historic lows, and the foreclosures on the market are slowly working through the system.

Bad News for the market: unemployment remains above 8%, and it is unclear how many more foreclosed properties are in the wings waiting to go into the real estate market.

My opinion for the market: We are headed in the right direction.  2012 will see a gradual increase in sales activity.  Maybe not in actual sales, but people are going to be preparing for the next step in purchasing/building a home.  Several things lead me to believe this.
1.  Many households have been supported by a single income now for two to three years.  These families have adjusted their lifestyles to this income level.  In fact, according to the Federal Reserve Board, the current Household Debt Service Ratio (an estimate of the ratio of debt payments to disposable personal income) is at is lowest since 1994.  It has been slowly creeping down since the first quarter of 2009.  As it continues to drop, families will start to make more purchases.  As people spend money, the job market will increase to support the increase of inventory & service needs.
2.  As the the job market increases, single income families will become double income families.  Now there are “experts” out there saying that previous homeowners are now comfortable renting and will continue to do so.  I do not believe this.  I believe the American public finds pride in homeownership.  Maybe this is my Maine roots  rising to the surface: Home & Hearth, family dinners and all that… I believe people will be making every effort to become homeowners again.  That said, as families get back to double income status, they will be taking the time to repair their credit, save the down payment, and research their options for homes.  People are also going to need time to be sure the new jobs are long term and not temporary.
3. 2012 is an election year.  Election years typically create a holding pattern for the general public.  We all “wait and see” what is going to happen.  Are you going to expand your business? “Well, I’m going to wait and see what happens.”  Are you going to change investment plans? “No, I’ll wait and see what the market does.” Are you going to build on your land? “I want to but, I think we’ll wait and see how things go…”

On top of the above key points, one of the main hurdles for the market right now is the appraisal process.  All of the “experts” are now seeing the evidence of this and several groups, including the NAHB, are working to fix the problems.  Solutions should be on their way by mid 2012, allowing builders more opportunities toward the end of the year.

The bottom-line is: if you are in a financial position to do so, NOW is a great time to build.  Interest rates are as low as they will most likely ever get.  Any homes built in this market are going to build equity very quickly, as the market stabilizes and grows.  A land/home value in today’s market of $175,000 is likely to appreciate to $225-$250,000 within the next decade.  This appreciation is due to the mortgage market stabilizing, foreclosed properties being sold out of the market and the value of homes on the market increasing.  Families in the position to build now can cash in on that equity, as well as the savings of incredible mortgage interest rates.

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