Expert: Sue Bernstein - 7/17/2006

Question
Ms. Bernestein,

I recently moved to a small city from a lot larger city and it is my opinion that the homes in the small city are overpriced.  I'm toying with the idea of purchasing land and building a custom home.  I've met with one company (Americas Home Place) and their prices appear reasonable.  I plan on shopping around more.  What questions should I ask?  How can I protect myself from hidden costs associated with building a home?  Do I need a real estate agent if I plan on building?  Let me know any pertinent information I need to proceed forward.  Thanks and have a great day.

Darnell

Answer
Dear Darnelle,

Much of your situation is outside of my expertise but I really don't see why you would need a real estate agent.  I think your idea of shopping around is wise and you will probably learn something from each company you interview.  My experience is that building always costs more than what you start out believing it will cost.  Will any of these companies give you a guarantee that if there are any building charges not in the contract that they will eat them?  Ask them what surprises you should prepare yourself for and build in a cushion (perhaps 20%) so that you have enough money budgeted to complete the project.

I hope this helps and good luck.

Sue Bernstein