Research

When we started talking to the agent about constructing the lot next door, there were some initial hiccups on both sides. We were very interested in building the same floor plan, but we didn't want to pay a penny more than the other house sold for. To complicate matters, the builder only had license to build that floor plan one time and was unsure that he could procure the rights to build it again. Initially the process moved very slowly, which was fine for us because we wanted to do a lot more research before we made a final decision.

One of the major research tools for us was touring model homes. We walked through every new construction model we could find getting a sense of features, floor plans and layouts. We found a lot of little features we liked, but we didn't find a single floorplan that we liked better overall than the house we tried to buy.

Model homes also helped us get a sense of what a new construction home should cost. We found quite a few homes that were cheaper, but without a doubt they were slightly smaller homes in tract developments in more suburban communities where land is readily available. Because of the location of my job, moving that far away was not an option. Besides, neither Theresa or myself wanted to live in a tract home community with small yards, close neighbors, no trees and that classic "cookie cutter" sense that sub divisions built by the same collection of builders always get.

We did manage to find a builder who was building the exact same floor plan in a few tract communities around the area. The prices on that model were 10k-40k higher than the house we tried to buy for the base model (depending on community) and the house we looked at had quite a few upgrades, such as granite countertops, etc.... The clincher for us was when we walked through a model home literally right around the corner from the house we tried to buy. The house was very similar in size layout and finish, however it had a few things we didn't like as much (notably the kitchen size and layout) This house was selling for 75k more than the house we tried to buy. At that point our minds were made up. If the contract looked good, we would sign and build a house.

How did this happen?

I suppose I should start at the beginning...

I was not planning to build a house. For some odd reason I took a quick look through realtor.com one day and one house in particular really caught my eye. It was brand new construction in an existing neighborhood, looked very nice and when I ran the numbers I was suprised to see that I could afford it.

Existing Genick House

I sent the link over to Theresa and she liked it just as much as I did. I still didn't think that there was any chance we'd actually consider it, but we decided to go take a look just for fun. A few days later we showed up and toured the house and we both loved it right away and a few days later we were making an offer (which was well below asking price). We were promptly outbid.

Everything happened so fast for us that we weren't confident making a strong offer. We weren't certain about the house's true market value, the idea of living together was a new idea to us, the timing was bad because I'd be forced to break an apartment lease, Theresa already owned a condo that she had no hope of selling and wasn't sure she could rent... so we kind of took that approach that if we could get a great deal on the place that'd be awesome. If not... oh well.

But it did open our eyes. We started looking into property values, thinking about moving in together, Theresa started looking into renting her apartment and we started paying close attention to our financials. Everything pointed to the house being a decent deal at full asking price, and something we could easily afford. The more we thought about it the more we started to think that it was something we maybe should have done. Of course there are always more houses, but interest rates were low, housing prices were depressed, and we had found something we really liked... it seemed like the right time to buy. We were a little bummed.
We did engage a realtor and started looking at the existing house market. We weren't in any hurry but we did want to get a sense of what was out there. Everything we saw reinforced our thoughts that we should have made a stronger offer. The existing houses were not much cheaper, and they all had less desirable layouts, or just generally weren't as nice and for almost every one of them we would have undertaken some level of remodeling, which didn't sound the least bit appealing to me.

But the agent selling the first house had mentioned that there was a possibility of building another house on the lot next door...