Tips For Building A New Modern Home in Minneapolis
If you are like most buyers out there right now thinking about making a purchase this year, the idea of a modern home in Minneapolis may have become part of your search criteria. We have assembled 5 helpful tips for finding you future modern home. Whether you are looking to build a new modern new home or simply want to purchase an existing modern home in Minneapolis. It is important to think about these key points.
The foundamental cost component of a new construction urban home: the lot cost.
Beginning to understand the new build process can seem tricky given all of the variables. The impetus behind most buyers thinking about a new build is going through an open house or browsing sites like Houzz.com to see some of the latest trends in new construction. Its important to know some rough costs before going down the road of new construction. In the current Minneapolis real estate market, finding the right lot can prove much more difficult than it did in the past. Lot prices can vary from sites in Northeast Minneapolis in the low 100s to areas blocks from the Minneapolis lakes from 250 to 500k depending on the width and slope of the lot as well as alley access. Areas in and around Edina can start in the 300s and go up to the 600s. The further out from Minneapolis and Edina you get, lot prices are going to incrementally decrease.
Understand the cost of local Minneapolis builders and architects.
Just as you can buy a cup of coffee for varying prices across Minneapolis, builders and architects often function in the same way. As a rule of thumb, most architects will charge anywhere from 3-15% of the total cost to build a new home--lot prices not factored into this equation. With this pricing spectrum, architects are able to offer a host of services from a partial site plans and elevations to full full construction documents (ideal for a builder). In addition to what most buyers think architects do which is handle the building massing, exterior design, style and layout of the home, architects can also be involved in the minutiae of the interers including kitchen cabinet layout and elevations, electrical layout and lighting plans. With the sheer amount of services offered by architects, it is imperative to have a clear expectation of exactly what it is you want an architect to engage in early on.
Depending on the market niche within the Twin Cities, there will be a select group of builders which can vary between a few to few dozen that have experience and focus within a given area. We always recommend to our Buyer clients to work with not only an experienced builder, but a group with focus and a track record of success. Builders are going to charge a percentage in margin on the total cost of the build. This margin can vary from builder to builder so it is critical to understand how each builder operates. Some builders are open book, meaning you get to see exactly what (discount) they pay for supplies--others merely will tell you flat out they dont share pricing and have no intention of disclosing to you. Depending on the builder, fees generally run anywhere from 10-20% of the total cost of the build with an average of 15% in most cases.
If you want to build your home, understand construction financing.
Every builder has a different philosophy of construction financing--some builders want the buyers to purchase the lot and get a construction loan (more on this in a future blog) to pay the builder throughout the new build process. Others simply will ask the Buyers for some earnest money and to sign a construction contract, they will in turn purchase the lot for the Buyer and carry the construction all of the way to completion at which time the Buyers will close on the entire new build much like a traditional real estate transaction. At this point the Buyer will now have full ownership.
Work with a experienced Realtor® that is literate in the new build process.
For most real estate agents, the whole idea of new construction in Minneapolis and the process is outside the wheelhouse of their expertise. Very few agents have a background in new home building construction and can leverage this for the benefit of their clients. Before going down the road of new construction, choose an experienced Realtor with a clear track record of success in new construction. Find an agent that can offer you a number of architects and one that can explain the pros and cons of different builders in the marketplace. This will define your overall experience and with the sheer size of investment you are about to make it is absolutely paramount to have an advocate throughout the process.
What is the cost of a Buyers Realtor®?
In the state of Minnesota, sellers and builders compensate Buyers agents. This means agents are paid when they locate the perfect lot for their clients as well as when the agent guides the Buyers in selecting the builder. Having someone guide you throughout the process that costs next to nothing is a great incentive for every Buyer to work with an insightful, experienced Realtor® fluent in the new build process. If you are just beginning to think about going this route feel free to contact us today!