Site Selection is Key First Step to Home Building

by Doug Tusing, ESTEP REALTY SERVICE, Ebensburg            

Thinking about building your dream home? Great. But before you do, the first thing you’ll need to determine is exactly where you want to build it. In fact, deciding where to build is just as important (if not more) than deciding what to build.

Why? Simple. Once you’ve built your home, hopefully it will be perfect – just the way you want it to be. However, it’s likely that you might want to change your mind during construction on the design, features or upgrades. No problem – most of that can always be corrected. But if you invest your future in a beautiful new home in the wrong location, there is absolutely nothing you can do about it – unless you build your second dream home somewhere else!

I’ve had the good fortune of spending 20 years with a major multi-national retailing company, both here in the US as well as in Europe. Much of my work involved site selection, design and construction. No matter where in the world we went to analyze a market for new sites, our decisions were always based on the fundamental characteristics of the location itself, which we referred to as "dirt strength". Ask just about anybody in business what they think is important in real estate, and they just might give you three simple answers – location, location, and location. Whatever the business, you can always adjust your product mix, advertising, pricing or service. The one thing that you cannot change easily is the business location. The same is true when building a home – location is key.

Why is home location so important? This is where you will live. This is where you will raise your family, send your children to school, attend church, make your trips to the supermarket and stores, establish lifetime friendships with neighbors, and watch your children grow, learn, and make their lifetime friendships. Deciding where to live will determine how long your commute to work will be, how close you’ll be to schools and shopping. In this era of busy lives, what is the value of your time and how many hours are you willing to spend in the car traveling to and from home to these places? This location called "home" will become the cornerstone of your life for many years to come. Carefully choose the one you want!

Here are some helpful tips on homesite selection. Please consider these thoroughly when you are planning to build a new home.

First and foremost, try to think long-term. Building a new home is definitely a long-term decision. In fact, statistics show that people in Pennsylvania generally hold onto their homes much longer than they do in other parts of the country. So, it’s worth taking a moment to think not only about what your situation is today, but also how it may change in the future. For example, do you have children now? If not, will the home location be right when you do (choice of school district, close to recreational facilities, etc.)? Either way, think about how your family needs may change over time. If the kids run off to college in a few years, your longer-term needs may be different. Also, if you are building a new home to enjoy your retirement, try to envision how your life will change once you stop working.

Next, your home is probably one of the biggest investments you’ll ever make. It is smart to locate your home in an area that will likely bring future appreciation through a strong resale value if and when you ever sell it. In addition to considering schools and recreation facilities, look for areas that are convenient to work, shopping, and other amenities. Take a good look around the neighborhood. Choose an area where other homes have the look and feel of a neighborhood where you would want to live. In particular, look for areas where other new homes are being built. Clearly, it is impossible to predict the future value of your home. But you can feel confident that if the location is appealing to you, it will very likely appeal to others.

Do your homework upfront to make sure that the homesite you choose is actually "buildable". Determine if there are any zoning or deed restrictions or building set-back requirements that may cause problems. If there are no public sewers, find out what is needed to install an on-site system, and more importantly, have a percolation or "perc" test performed to insure that a system will work on your site. If the water is not public, what quality and quantity of water can you expect from a well? It is good to seek expert advice in all of these areas before buying a piece of land to be confident that you can actually build the home you want on it. Generally today’s municipal codes require these issues to be resolved by the seller before a lot can be sold, but it is wise to check everything mentioned here before going too far.

Last but of course not least, when it comes to locating your home, a major consideration will most certainly be the cost. Building a new home can be an expensive proposition, and the cost of the building lot is important. Be sure to look beyond the cost of the real estate itself. Carefully assess any additional expenses that may be needed. These may include such items as the cost to run utilities, to install sewer and water systems or pay tap-in fees, and to clear or level the land. In some cases, soil testing may be needed to determine the need for special foundations, or to identify the presence of rock to be removed. Again, it is often wise to get professional help in evaluating these issues.

BUT… please let me close with a word or two of caution regarding the cost of your new homesite. You’ll agree that once the location is selected, you will be living with it for a long time. With that in mind, think very carefully about ruling out a great location purely on the basis of the land cost. When I was in looking for business sites, my company would often pay a significant price premium just to be in a prime location. Home ownership is really no different. All too often people make the mistake of thinking they are saving money on land, only to regret their decision for the next 30 years. We have witnessed far too many cases where buyers have been shortsighted in passing up their first choice homesite in order to save $10,000 or $15,000 on land costs. While that may seem like a lot of money, in comparison to the $150,000 to $250,000 that many builders will invest in their new homes, spreading out an extra $10-15,000 over your financing term is really not that great a premium to pay to live on your dream lot. At today’s low interest rates, that extra $15,000 will only cost you about $90.00 per month. Is it worth $90.00 per month to you to live where you really want to live? Or looking at it another way, is the $90.00 "saved" worth the heartbreak of accepting a secondary homesite? Putting just a little extra into your land can literally mean the difference between living where you really want to…or not. Just ask yourself, what is that worth to me?

So, before you settle for a secondary lot on which to build your new home, please carefully consider all of the options available to you. If cash is tight, buy your lot now and wait a year or two to build your new home. If you want to build right away, hold off on adding the garage or finishing out the game room or basement; defer the installation of landscaping or paving the driveway. You will be surprised at how easily you can save that $10-15,000 in construction costs.

You can always make those minor improvements or add the details later. But you can’t change your building site once you’ve built on it. Ever.

Please give us a call if you are thinking of building a home, and are looking for a great location...