Well, I am the wrong one to ask because at the end of my build now, I tell everyone, "I wouldn't recommed building." I thought I would LOVE to build a house. Well, it has been very stressful. Be sure you really want to do this! For me, there is heartache over every decision. I have laid in bed awake many nights. Now, our house is TOTALLY custom--a tear down of an old house. We created our floor plan. I have said that I think building a house in a subdivision would be easier and I would probably like having fewer options. Just know that you will be dealing with really boring things like sump pumps and drainage when you want to be picking out tile and window treatments, etc. Another friend did build their first house in a subdivision and said he would never do it again b/c you have to pay for everything--the fence, the sprinklers, the grass, etc.

The other thing that i don't love about building is that you have to make all your decorating decisions at once. I have to figure out my paint colors before I really know what furniture I will want in the room. If you buy an exisiting house, you can move in and redecorate/remodel one room at a time.

Just think it through. Maybe look at existing houses and see what is out there. I don't mean to be a downer. Many people love building. Hopefully you will hear from them too!

Hey, daygoose. we are from Chicago too (bucktown)! we are nearing the end of our build (custom, bought a house that we demo'd) in a suburb. Depending on your area/s of interest, I would highly recommend our builder.

Just as kelleg mentioned though, go into it with as much info as possible, know that you can afford it (and allow for a great percentage of 'over the budget' costs), and expect headaches, heartaches and great joys along the way. I am very happy that we have built our home with everything we wanted (within our budget and lot size constrictions, of course!). It is A LOT of sleepless nights. Making 10,000 decisions gets to the most even-minded individuals!!! If we do this again, we now know more about ourselves and how we make decisions together. There has been much that I've loved about the process, making it worth it (but the headaches are painful!).

I'm in the chicagoland area also, and we just completed a total custom build, and I also wouldn't recommend building, at this time, but for different reasons than kelleg.

First, good luck in selling.. we tried selling our old home for 8 months. I had wanted to put it up prior to starting construction, but DH talked me out of it, since we knew it was going to take 1+ years and our last two homes sold very quickly(3 days and 10 days) Our old home had been on the market about 7 months when our new home was nearing completion & we decided to try and rent the old house, and luckily that has worked out. Whatever you do, in these times sell first, then move on.

We were also owner/builders, while the building process was often stressfull, and there were so many choices to be made, for the most part we enjoyed the process. That being said we had previously had two semi-custom homes built in subdivisions, so we kind of knew what we were in for.

I love our new home, but if I had any idea how bad the housing market was going to get, we probably wouldn't have proceeded. The costs of building haven't declined nearly as much as exisiting homes.

Currenty,there are just SO many unbelievable good deals in existing real estate out there. We lost more than a few very interested buyers to short sales and foreclosures. Our house was priced more than fair for our neighborhood, but just couldn't compete with firesales. I've seen homes that in 2005-06(peak)sold for 1M, now for sale for 600. And the same all the way down.

I would certainly take a look at what there is out there before you decide to build.

Kelleg and mairin had some good things to say--there are lots of hard times ahead of you with building a home. It would be alot more fun if we didn't always have to worry about money because everything cost more than what we thought it would, so plan for that. If you are not great with choosing colors, go look at a home that you really love and find out who chose the paint/faucets/stains, etc. It is a long process that you will lose lots of sleep over, but the best thing is is that you found this site early on. I can't imagine building without it. We just got finished building in December and I'm glad we did build, but I don't want to do it again. But I have friends who LOVE to build. When you interview builders, ask to go see homes that they have built and ask the owners how the builders were to work with, how close the final cost was compared to his bid. Ask the builder how often he visits the site--I think every day is best, his feelings about your calling/emailing every day to find out what is going on that day, etc., and that you would like a schedule ahead of time to know exactly when and what order you need to be thinking of things. Good luck!

Hi daygoose,

Hang in there- it will sell if it is showing well and priced right :) We just sold our place in Lincoln Square (Chicago) in December so houses ARE selling. Check out cribchatter for the latest real estate gossip as well...

We decided to build, but weren't comfortable doing so until our house sold so I can appreciate where you are coming from. Focus on selling your house first and getting into a rental. Take your time looking at land and house plans. Make sure you have the energy and the time required to build b/c I really underestimated the process (but I do not regret building).

There really are some good buys in Chicago right now (I've been keeping up with cribchatter even though we moved to the northeast). You'll figure out what it best for you!

Our choice to build was because we didn't want to have to go through the headache of remodeling an entire house again. Building is so much easier and less expensive than tearing out and instaling new. We could not find a prebuilt home to meet our requirements so we chose to build. It's taken 6 years, but we are at the finish line now. DH built 95% of the house in his spare time so that's what took us so long. It's nice to move into a house that is customized to your specifications. Building is very stressful.

Ditto for trying to buy over building. We built, but our situation (very limited geography, wife's wine collection, need for a big master closet and a basement) dictated that no existing home would meet our needs.

Prices on homes are finally at a reasonable level in most areas, so I'd look long and hard for existing houses before I started thumbing through plans online our looking at land.

Call custom builders in your area and see if they have any inventory that would fit.

You didn't say how long you've been married, but keep in mind that the stresses of the building process contribute to a high percentage of marital dissolves during and immediately after the build. Building throws not one straw aimed to break the camel's back, but several thousand straws which will provide opportunities for major marital discord.

Depending on your type of contract and how closely you and the GC see things, there will be somewhere between 5,000 and 50,000 decisions to be made preceding and during the build, half of which will be dumped on you unexpectedly --and with a short deadline-- and many of which you will be clueless regarding your choice's consequences. If either you or spouse are detail-oriented AND have the knack of remaining calm in crises AND are quick learners, the process of building will be stressful but not overwhelming. If only one partner fits the bill, the the non-detail spouse should have absolute trust in the Detail-partner, and the ability to convey that confidence without adding pressure (that means having really good communication skills). If neither spouse has these characteristics, I strongly recommend buying.

Please don't misunderstand - I come from a large family of OBs and GCs and I love the building process: the decisions and challenges to get a mental image formed into a touchable, visible, livable reality; the smell of fresh-sawn wood and even the unpleasant aromas of wet concrete or polyurethane; the challenges of dealing with skilled and unskilled people, and the pleasures of seeing a job well done are to me worth all the effort. But, and this is a big but... I never ever start something that isn't planned into the smallest detail in advance, and never ever start a build that I can't afford to finish even if delayed by theft, hurricanes, or a stock market crash. Thus I'm more conservative than 99.9% of the builders, but I have low blood pressure and enjoy life.

If you do decide to build, make as many decisions as possible before signing the contract. That means not only the floor plan but what the floor is made of, and the color, and how it's to be finished; and so on, everything from the roof to windows to doorknobs and the TP roller, and all the stuff inbetween and above and below. Don't say that you don't know what these items are or how much they cost, Do spend time online and find out how much whatever is selling for, so that you will know what is a good price and what's a price gouge (gouges are easily available and equally easily avoidable). Copy Persnickety's spreadsheet into your own version to get started and to keep the info handy...

The website BUbuild.com is a good beginner's resource for general information. A website that will give you a good feel for quality details is beforethearchitect.com and a wonderful website with lots of visuals is the Delores House (see link). There are hundreds more good websites, but I really think this forum at GW is one of the best when you have questions.

Assuming your finances are healthy and in good shape, a very loose guideline is to spend 12-18 months deciding what floorplan/style/size of house and where to put it; 12-18 months pricing and buying materials/appliances, and searching for GC/subs; and 4 months (small plain house) to over a year (large complicated house) in the actual construction.

Here is a link that might be useful: Delores house

Thanks for all of the advice! It is very helpful. Believe me, I have been looking at a lot of houses on the market. It is because of this, that we have considered building. There have been a few houses that we have really liked, but still not something anything we really love.... and not that cheap. I know there are great deals out there, but we haven't really found any. Part of the problem is that we have a pretty specific area that we want to live in that is near to work and family, and has good schools for our sons.

One more question... I have heard about fixed prices and cost plus... How do you budget for a home when everyone talks about it going over price?

Those of you who have built around Chicago... please recommend your builders!

Keep the advice coming. Thanks again!

I would highly recommend our builder. Most of his work has been in the northern and northwest suburbs (Libertyville, Lake Forest, and ours is in Arlington Heights). If you want any other information, feel free to contact me via "My Page"

here's his info:
Brad Meyer
Meyer Homes, Inc.
O: 847-549-0914
F: 847-549-5139
C: 773-909-8234
www.meyerhomesinc.com

Budgeting is where foreknowledge really pays off. Along with the ability to resist making change orders. Also needed is the ability to resist the urges of "while we are at it" and "it's only a little bit to upgrade" and similar costly phrases. It's extremely rare for a change order to save you money!

The budget must include plans, permits, labor (some as crew/s and some individuals), materials for the construction itself, HVAC, earthmoving (basement, driveway, foundation and possibly septic and/or water), supervision and scheduling (those two items are prime reasons why GCs earn their money), appliances, tiles and other flooring, roofs, counters/builtins, doors, and windows. The cost of the last six items can make or break your budget and yet are the easiest to control with careful pre-planning. The cost of "earthmoving" is nearly impossible to control -- you take the sub's estimate, silently add 25% to a figure that will make you gulp, and then cross your fingers that neither boulders nor streams become involved.

No one here can tell you what a reasonable budget may be for your circumstances. You have to balance your present savings, future reliably expected income, and whatever the bank thinks you are qualified for (which probably won't be as much as you think) against the size, location, and design of the house. Make as many decisions as possible in advance, and hunt for sales on items you know will be needed (storage is cheap after saving the first hundred $ is saved) because materials are one category you can reasonably come under-budget [pay less than expected]. Become familiar with the neighborhood you want to live in -- study real estate ads and then learn the usual tax assessment for houses similar to yours in your neighborhood. And this is a good place to say that it isn't smart to build a house more expensive than average... it won't be valued as such but it will cost you more in building, taxes, and upkeep. I recommend that the total cost of your new build not exceed 75% of the neighborhood's average house value. If the market is competitive (thus raising values) then your cost should be closer to 50% of local sale value. Get bids (and research all references, licences, bonds) from potential GCs on your detailed contract, and talk with the lender. You must be able to afford the mortgage payments without financial strain as well as needing 20% to 25% of the total cost [in available case] for the lender, and -especially if earthmoving is involved- another fund of $20,000 or 10% [whichever is larger) to cover unexpected expenses. There WILL be unexpected expenses...

Remember not to sign anything you don't understand, and don't sign any contracts until you are absolutely positive that you can afford the consequences. If, after all that, you are sure you want to build... welcome to the club!

Your initial post makes me nervous. You have a house to sell, and you say you are on a tight budget. I add to that a rotten real estate market and I'm even more nervous. Right now builders are taking losses on homes they have built. I see that continuing for another year. The 'pros' are losing money. *I* would not build now.

We built 30 miles north of Chicago in 2000-2001 before the real estate bubble took off. Our new house is still worth more than we spent -- by a much smaller margin than it was a year ago! We were also able to sell our prior home 15 miles north of the city easily and for the top price for the neighborhood at the time.

Right now you can buy existing real estate for much less than it cost two years ago. You can't build new for less than you could build two years ago, and the value of your new build will DEpreciate for a while until the market turns.

It is a tremendous CHORE to build a house. If your present home doesn't sell you will be a nervous wreck. If it does sell, you will have to find temporary housing -- and live in it for a year, awful though it may be. (I thought I'd lose my mind in our apartment.) Building consumes all your energy and takes prime time out of your family life. And yes, just about everyone spends much more than originally planned!

Where are you looking? Are there any homes there that builders are anxious to sell? (You could have all-new and spend less than custom.)

(What's with the underlining here? I didn't underline 'budget' but I see that's how it's posting.)

Some items that meldy_nva didn't mention, but can prove to be dauntingly expensive are the cost of putting in utilities -- electric, gas, water, phone and others.

I am looking in the near south or west suburbs. There is very little new construction in the area. We wouldn't build until we sell our house. We have been looking at existing homes for over a year now... and have not found much that we like. The one house we really liked was not in a good school district (there are not a lot of good schools in the area). We are approved for a mortgage and have been saving up as much money as possible since we have decided we want to move (a year ago). We are in stable jobs that we plan on staying at for a long time and are looking for a house we can stay at for a long time.

Thanks for all of your advice and warnings. We really want to do our homework before we decide anything for sure.

OK, so I'll chime in with a bit more positive outlook on the building idea - if only to make myself feel better that we are starting our build in the next 2 weeks! We are building in the Western suburbs of Chicago - we bought our lot over a year ago and rented out the house on it while waiting to sell our own. We then moved into a rental in order to build, as we did not want the stress of potentially owning 2 homes later on, plus we really needed to know how much money we were going to get for our home before we started to build the next one. While waiting to sell, we started designing the new home, with a certain budget, and builder, in mind. Once we sold and finalized our plans, we had him bid the project - and I spent a month in a depression b/c the bid was 30% over budget. I started mentally designing a new house, but we did bid it out to other builders and the pricing improved. A LOT. And when builders heard that someone else was getting the job, they came back with even better pricing. It is very competitive out here - builders are dropping their GC fees, subs are dropping their prices, lumber prices have come down. Now that doesn't make my house cheap, but it means we don't have to start over with a new plan, for which I am eternally grateful. We had builders - good builders - calling us asking us to bid our project!

Re: budget/overages, we thought we'd want to do a cost plus type of contract, but when we realized we were tight re: budget, we opted to do a fixed price. I have priced out our items enough (ok, actually in great detail!) to know our allowances are good and that any overages will be from our selections- and have left a bunch of wiggle room for adding to tile, trim, etc at the end.

Pricing on our construction loan was good. I will say that we are glad we have a hefty down payment, though, as the appraisal for the construction loan was for less than the cost of our lot plus the cost to build (mostly attributable to decline in lot value over past year, but a little due to the concept of "declining market" over the next year).

One other lovely little "fee" we discovered awhile ago is the asbestos remediation. Can't get a demo permit in Cook county without an all-clear re: asbestos, and these old houses have asbestos tile, etc. It'll be over 3K extra to "fix" in order to tear down the house. So if you decide to buy a tear down in Cook, spend the $ for an asbestos inspection before you buy, so you can negotiate that $$ off the price if need be.

Suero ~ Thanks for catching that utilities weren't on my list! Obviously due to a communications glitch between brain and keyboard. :)

Niffy - can I ask what suburb you are building in and what builder you are going with?

And, how exactly does "fixed price" work compared to cost plus?

Thank you!

Daygoose -
Email me at niffinator@comcast.net and I'll give you the scoop on our area and our builder, as well as others we considered. The cost plus option we originally considered was that we would pay the builder a set fee to supervise/build and then we would pay the actual costs for the work/materials, with no additional markup. The upside would be that we get the benefit if costs went down. The downside was that if anything was forgotten/miscalculated/or went up - we still had to pay that cost. No matter what, the builder was getting his set fee. We decided that made us too nervous, as we found a few things missing from those bids that ultimately WE would've had to pay for. As we interviewed more builders, we found those that were willing to price the project down to the last detail, commit to a GC fee, give allowance for our selections (which we'd already set with our architect, so they were realistic, not the typical builder low-ball allowances!), and then if anything changed or was missing from their bid that was on the prints/bid specs, they committed to paying for those items themselves, out of their own profit/GC fee. We still get builder pricing on our allowances and no additional mark-up if we add things or go over - i.e. we have more control if we go over budget or not. The price for the house won't change unless we add or change stuff ourselves.

FWIW, my brother-in-law lawyer strongly recommended the fixed-price contract over a cost-plus contract. More protection for owners, as niffy explained.