After reflecting on the last few months of blogging, I thought now would be a great time to update everyone on the nitty gritty of the housing situation. The process has been slower than expected due to administrative stuff that I wish I had found clearly outlined in a blog post, such as the one I am about to pen. 🙂 If you’re thinking about building and haven’t been through the process, then read on! If you’re familiar with the process, feel free to skip ahead to see where we’re at today.
When we purchased our vacant lot for cash in April, there were a number of players involved: us, the sellers, the sellers’ real estate agent and a title company. Because we did not have a real estate agent working for us, the sellers’ agent served as a dual agent and represented us both in the transaction. Because it was pretty straightforward, we felt comfortable working with the sellers’ agent.
With the title company involved and a bit of Internet research, we knew what fees and taxes would be added to the purchase. There are two types of taxes we had to pay: property tax (for the rest of 2015) and school tax (last couple of months of the school year). Fortunately, we found a calculator online to help us estimate fees, and the real estate agent worked up an estimate as well. We knew we had to shell out $4,300 for the lot with fees and taxes, but we were ready.
Related Post: Small House Construction, Part Deux
After a short waiting period of maybe 10 days, we met with all the aforementioned players at the title company to sign paperwork. It was then that the waiting period began; I wish I had paid attention to this part at the signing. I didn’t realize that it was going to take at least 60 days for the transfer to be complete. Also, I did not realize that all construction depended on the acquisition of permits, permits that depended on the acquisition of the deed. After going through this process, it makes sense now that we have to prove we own the land first. Duh, Claudia.
While we waited for a copy of the deed to show up, we weighed all of the options and vetted some house builders thinking that building a 200 or 300 sq ft tiny house would be easy (and cheap). Unfortunately, the estimated building costs of $200/sq ft made traditional building out of reach, especially since this estimate did not include site prep, which two quotes indicated would be an additional $13K. Wow! Eyes wide open now.
Sidebar: Site prep for our lot is unique since there is an old basement that needs filled before the foundation can be set. Laterals are in place for water and sewer, so we don’t have to pay to have these installed. And we are going with all electric, but it can’t be buried, which would have added more to the site prep cost.
What next? Do we build the house ourselves and hope that it will be done in a year? Possibly. We checked in with the borough to see what we needed to know in order to construct a home. Proverbial wheels went off the wagon at this point. Apparently, the minimum size for a dwelling is 500 sq ft! After considering home layouts about half this size, 500 sq ft seemed huge. (Pro tip: contact the zoning officer early on before getting stuck on one idea.) And with a $200/sq ft price tag, the price of the home quickly exceeded the $100k we did not save for building a house. After considering the possibility that we could apply for a variance on the dwelling size, it was an expensive gamble not worth trying that would delay the project by at least a month.
Oh yeah, and the TV show? Even if we were selected to appear on Tiny House Nation, filming could have been months out. Again, time is of the essence! It would have been fun to be on TV, though. 🙂
Related Post: Small House Construction, Part 3
Rather, we considered what was most important to us: time. Time is money. We outlined the options that would land us in a smaller home faster, and we found ourselves with one real possibility. Purchasing a manufactured home meant that we could move into our new home summer 2015 rather than summer 2016, potentially saving at least $13k in mortgage payments, $2k in electricity, $700 in water/sewer and $2k in taxes for a total of (drumroll, please) $17,700 annually when comparing the big house expenses to the small house expenses. These are estimates based on assumed efficiency improvements and the cheaper utility rates in the new borough.
Since manufactured homes are required by HUD to meet certain standards, they are all practically the same. Garrett spent more time researching the options, construction and differences since he wasn’t 100% sold on the idea at first. Being an engineer, Garrett really appreciated that manufactured homes are constructed in a factory according to federal mandates; his thought that ultimately sold him on this idea is that homes are likely to be far more consistent in construction when the pieces are cut on jigs indoors inside a factory than when they are pieced together onsite outdoors. There were a few upgrades we opted for, such as a porch, vinyl flooring and gypsum drywall. After living with hardwood flooring for more than a year, we relish the day we return to vinyl–MUCH easier to maintain.
After weeks of vetting manufactured home retailers in three counties, we decided on a home manufacturer (Skyline) and a retailer (Howe Homes). Barefoot John of Howe Homes had the experience we desired (47 years and still going) as well as the turnaround time (permits+3 weeks for manufacture/site prep). Total cost for this project, move-in ready is $60k ($47k for the house + $13k for site prep). Total cost for the big house? Lost track over the years, but the purchase price alone was $180k, so you might say we’re saving a little bit. 🙂 If the big house sells today, we should be able to move into the small house before the big house closes. And we won’t be saddled with the Mortgage Monster any longer! *happy dance*
Now, I should get back to the administrative stuff about buying land and building a house, which I promised earlier. At the time of this post, we have a copy of the documents from the title company but not the official “deed.” We were able to use the deed to kick off the next stage of the process, which is obtaining building permits from the borough. Thus far, there has been very little we have had to do for this; we are fortunate that Barefoot John handled the paperwork as well as arranging a contractor for site prep. Because of John’s experience, he estimated that building permits would take two to three weeks to obtain, at which time site prep and home manufacture can commence simultaneously.
That’s where we’re at today, so I’ve made this “part 1.” When permits are in hand and site prep kicks off, I imagine we’ll be learning a lot more that may be worth sharing with those looking to build a house. For a running total of the costs we’ve incurred, please check out “The Build.”