This is Part 2 of the Hypothetical Remodel~Let’s get down to the details of Buying an Existing Non-Green Home and making it Green in Houston. It’s all about keeping an open mind and checking out all of the options available to get what you want.
Typically most homebuyers have only a certain amount of money when they start looking for a home. Whether it be that they are going to pay cash or get a mortgage, there is only so much that a typical homebuyer can do. I touched on the topic of minimal options available when buying Green in Houston right now and how many of the ‘Green’ built homes inside the loop, or outside for that matter, are townhomes and condos. Well, that doesn’t appeal to everyone.
For the sake of this part of the Series let’s say that the homebuyer does not want to go over $400,000 and wants to stay around 2300 sq ft or so.
I have had clients that want room for Gardens, Composting Pits- Others just may not physically be able to buy a home with an extensive amount of stairs for one reason or another. Then some decide to build Green. Why not LEED?
Well, unless you have a lot already to use this can add up. I am sticking with near Downtown because location seems to be an issue with many buyers today. Let’s say that you purchase a lot in an area/location that you like with an existing home on it. It’s an older home, possibly built in 1920 or so, and selling for lot value only. This will likely still run you a minimum of about $125,000 in many areas. You Demolish the home (or deconstruct if you want to be a darker shade of Green) and design your 2300 sq ft home- The home can then cost, if built LEED, over $415,000. By the time it is all said and done the realistic cost of building with land included could cost about $600,000. Depending on the area it could be over $700,000.
But this homebuyer can not go over $400,000.
This is where I personally would recommend to one of my clients to consider an older home to fix up but it can be hard to have the vision of the home being ‘Green’. So let’s consider this: (location only for example)
How about a great area near I-10 and Kirkwood that is really close to work? About 10 minutes away. We find a nice single story home on a large lot that has great solar orientation for both Solar if you want it and an Organic Garden. Wonderful Trees, nice Community feel, It’s the size you want- 2300 sq. ft. and the list price is about $326,600! Well under your mark of where you want to be. The kitchen is updated, gorgeous actually, with Stainless Steel Appliances (all Energy Star). It has double pane windows already, great bedroom sizes, the flooring is beautiful and what you want. But the Master Bathroom is way too small, somewhat outdated and the home is not Energy Efficient.
The sold comparable properties in this neighborhood for this size could sell anywhere from $275,000 to $450,000 depending on the condition and how much updating has been done. With the home we are considering at $326,600 is far from being at the top of the comparables. How much would that LEED ReGreen Bathroom Remodel cost? How about a ReGreen Energy Remodel to finish it up?
With this scanario you would have $75,000 to play with to make this home Green and stay within your budget or atleast $125,000 to play with to stay within the comparable prices for the community. That is a whole lot of work that could be done, and some nice work at that.
The only other question right now you may be asking is “Do I have to have that kind of cash to make this happen?”
No. Not at all. What if you could do the work that you want done to the home before you move in or shortly there after, still have your Conventional Loan with 5% down and a somewhat competitive interest rate along with that?
The rest of this series will walk us through how to get a Mortgage WITH the Green Remodel calculated in to it, bidding the work out, getting the design done AND how to have this work done PRIOR to moving in or very shortly there after. Part 3 will discuss the mortgage product that has been around for many years…and is still out there today.
How does it sound so far?