Cost, Appraisal, Decision!

Just a few steps remain in your decision-making process. Step 5, estimating the cost to build the house you have selected, is discussed thoroughly in the next chapter.

Step 6 involves getting an appraisal of the final value of your house. As I said in chapter 1, you can obtain a written appraisal of what your dream home will be worth after it is built on the land you have selected (or own). You will be getting such an appraisal ordered by your construction lender, but you can order one yourself as soon as you have selected land, plans, and basic specifications. Look in the Yellow Pages under Appraisers. It is not expensive to order an appraisal for yourself and it is folly not to have one at all.

Now you can move on to Step 7: Decision time! Based on total cost of land, labor, and material, is this project worth it? With the appraisal in hand, you will be able to make your decision intelligently by reviewing the following factors.

1. Are you saving any money?

2. Is the house over, or under, priced for the neighborhood? (Under is better!)

3. Can you revise your cost estimate if there is less than 25% savings? (Probably, see construction loan page)

Once you decide to move ahead with your dream house and have obtained financing, you can start on the fun part of seeing the work actually begin.

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