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| Clearing the Path to Your Dream Home |
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| By Jim Cooper |
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After several years of selling and building log homes, I've
concluded that many people who genuinely want a log home will never
own one. Conversations with others in the log home industry indicate
that others share my conclusions. I've decided that only two major
obstacles stand between most log home dreamers and their houses: (1)
the log home-buying process itself and (2) their budget.
Everyone who now lives (or soon will live) in a log home has
overcome these two hurdles. While the obstacles may seem obvious,
methods of surmounting them may not.
If owning a log home were as easy as walking into a sales
representative's office with a floorplan and a checkbook, the
hillsides and meadows of America would be blanketed with log homes.
Unfortunately, obtaining a log home is more complicated than buying
a conventional home.
When conventional home buyers go house-hunting, they either employ a
Realtor or wade through classified ads and real estate directories.
They look at finished homes and builder's models or renderings. At
the most, they may choose a lot, point at a picture or visit a
model, note a few modifications (only a few changes allowed) and let
the builder take it from there. More often, they will visit a
finished house they like, make a purchase offer and let the Realtor
or real estate attorney take over.
For log home owners, the process involves finding land, selecting a
floorplan, choosing a log home company, finding a builder, obtaining
financing, and, oftentimes, arranging to hire subcontractors or
contributing their own labor. In the case of log home buyers, since
they are operating outside of "normal" home buying
procedures, they will have to direct the entire process themselves.
A Realtor may help the log home buyer find land and a log home
representative may offer building services (or at least offer
suggestions), but working with the builder, the finance company and
the log home company falls directly on the buyer's shoulders.
The difference is much the same as comparing hiking on a well-worn,
well-marked trail with bushwhacking. Once you leave the security of
the trail you must be prepared to encounter occasional thickets or
briar patches.
So the procedure for obtaining a log home is an obstacle that can be
overcome only by preparation. Half the people who visit me will
never own a log home simply because they aren't prepared or willing
to accept the additional time and energy commitments required by the
log home buying process.
Budgeting is the other pitfall on the road to log home ownership.
Despite the efforts of log home manufacturers, sales representatives
and log home publications to explain the costs involved in building
a log home, many prospective log home owners entertain notions about
costs that range from mild delusions to sheer fantasy. I see many
people each year who think they can obtain a large, custom-built log
home, on a rural acreage with private well and septic system for
less than the cost of a modest town house or a single-family home in
a development.
There are three ways to deal with budget problems. First, you can
delude yourself. This is especially likely for those planning to
contribute their own labor. Some of these owner-builders believe
that most of the price tag of a turn-key, or finished, house comes
from labor costs, which they can avoid by doing the work themselves.
Their delusion about log home costs comes from a general lack of
knowledge about the house-building process. Just as we've lost touch
with the processes that put food on our table, most of us no longer
understand what is required to put a roof over our heads.
Complicating this is the fact that most of us are not willing to
settle for the same roof that sheltered our grandparents. Today, log
homes and housing in general are far more complex.
In reality, providing all the labor for your house (and not paying
yourself for your time) may save you one-third the total price of a
turn-key, contractor-built home. But this is only if you are very
good, very efficient and very organized. The real danger of deluding
yourself comes when you manage to get yourself into the project and
find yourself unable to complete it. This predicament happens
frequently enough that many lenders list it as their main reason for
refusing to grant loans to owner-builders.
The second way to deal with budget problems is to re-examine
projected costs and realistically determine what can be cut without
altering your basic dream house. Perhaps the deck can be added
later, the second story can be finished in your spare time after you
move in or the whirlpool tub can be roughed-in for later
installation.
These decisions can often help bring a budget-breaking house plan
within reason. But they usually work only when the budget is not too
badly broken. And such measures mean accepting a house that, in your
mind, is not truly complete-the legendary permanently unfinished
house. After a while it becomes annoying telling guests, "This
is where the so-and-so will be, and over there will be the
such-and-such."
There is a third way to make your log home dream come true, even in
the face of massive budget discrepancy. It's simple, certain and
comes with a host of other benefits. It's also the least tried.
Stated simply, redefine your dream. Since, for most people, log
homes represent more than just housing, this approach means
examining your lifestyle and priorities.
When I first started selling log homes, I was amazed at the
uniformity of people's log home dreams. The floorplans were
different, but the size and the features were the same. I call them
the "gotta haves": "We gotta have 2,000 square feet,
a loft, all tongue-and-groove ceilings, a glass wall, whirlpool,
master suite with luxury bath, hardwood floors, etc." The price
tag for such "gotta haves" can run to over $30,000.
I wondered how everyone was coming up with the same list until one
day I realized it came straight from magazine ads and sales
literature. I disclose this fact with a certain chagrin since I also
develop magazine ads and sales literature. So, let me point out that
I'm not protesting people's "gotta haves," just pointing
out that if yours prevent you from owning a log home, what have you
gained? Luxuriating in a whirlpool tub in a non-existent log home is
much less satisfying than stepping from the shower of a real log
home and hearing the chorus of night sounds drifting in the window
on a summer evening.
Perhaps a good way to evaluate your "gotta haves" is to
look at their real cost, not simply the price tag. Examine not only
the dollars spent paying for maintaining, repairing and replacing
them, but also the time required either to perform all those tasks
or to earn the money to have them done.
Consider a luxury tub-and it seems almost every log home shopper
does. What does it really cost? In my area, such a tub can start at
$2,500. To satisfy most tastes (and look like the magazine ads), the
price tag is roughly $4,000. But what does it really cost?
First, let's look at the mortgage. Since that tub is going to be
amortized over 30 years at 8 1/4 percent, the actual cost to you
will be $10,818-or just over $30 per month for 30 years! And this
figure does not even count the water or the electricity used to fill
and heat the tub while it's in use, regular maintenance and the
inevitable repairs.
What about the loft? Lofts go with cathedral ceilings, which go with
log homes. They can be spectacular, delightful places. But when you
add a loft and cathedral-ceiling area, you automatically increase
the size of house required to get the same usable square footage. A
24-by-40-foot, two-story house contains 1,920 gross square feet of
usable area. If you leave a 20-by-12-foot area out of the second
floor to create a loft and cathedral ceiling, you have reduced the
usable square footage by 240, or 13 percent. You must increase the
house to 2,160 square feet to achieve the same amount of floor
space.
The cost of this additional space will be only slightly lower
because, although we've eliminated some second-floor framing, we've
added trim carpentry and finishing in the form of loft railings.
Also, a cathedral ceiling costs more to finish than a comparable
area of flat ceiling. Assuming a bargain cost per square foot of $35
for that additional 240 square feet, our loft-cathedral ceiling will
carry a price tag of $8,400. Its real cost, as part of the mortgage,
will be $63 a month-or almost $23,000 over 30 years!
Utility bills also will be higher in a house with large expanses of
cathedral ceiling. Even using principles of solar design and energy
efficiency in siting and building the house, it will cost more to
heat and cool than a house of the same area without those features.
Many people cannot imagine a log home without a fireplace. I have
two high-efficiency fireplaces in my own log home, yet they cannot
begin to equal the efficiency of even a mediocre wood-burning stove,
which would have been far less expensive. In truth, fireplaces are
to enjoy for a few hours on blustery winter evenings. Wood stoves,
on the other hand, can contribute substantially to heating a home.
If yours is a wooded lot of any size in an area of moderate winters,
you may be able to provide several seasons of heat just from the
trees cleared for the house and road.
Don't forget to consider the cost of obtaining that wood. Many
wood-burning hopefuls invest more than the cost of a complete
high-efficiency heating system in the tools required for cutting and
splitting wood. Then, after one or two seasons, they realize that
there are things they enjoy more on a crisp October afternoon than
the drone of a chainsaw and the odor of gasoline. Next, they
discover that a house heated by wood cut by someone else is about
the most expensive form of heat obtainable.
Finally, there are features like hardwood flooring and
tongue-and-groove wall and ceiling coverings. These are always
substantially more expensive to install than their conventional
counterparts-carpeting and drywall. In my area, hardwood floor,
installed and finished, costs $5 to $8 per square foot. By
comparison, the installed cost of a top grade carpet is $2 to $3 a
square foot.
Tongue and groove costs roughly four times the cost of drywall in my
area. The materials alone may run substantially more than the total
cost of drywall installed and painted. Tongue and groove' has the
mixed advantage and disadvantage of providing a permanent finish,
whereas drywall needs periodic painting or wall papering. From a
maintenance standpoint, tongue and groove wins. But from a
decorator's perspective, drywall offers the possibility of changing
colors or wallpaper. This flexibility can be important to someone
planning on occupying the same house for 20 years or more.
I'm not trying to convince log home shoppers to settle for less in
their dream home. Instead, I suggest considering the value of the
features you want independently to avoid either making your dream
unattainable or saddling yourself with a financial burden that makes
your dream, once achieved, impossible to enjoy.
Finally, consider that the price tag is only a part of value.
Remember Henry David Thoreau's definition: "The cost of a thing
is the amount of what I call life which is required to be exchanged
for it, immediately or in the long run."
A family with a household income of $50,000 per year earns a gross
salary of $24.04 per hour (based on a 40-hour work week). Commuting
to and from work adds an average of five hours per week for most
Americans, reducing their effective hourly wage to $21.37, of which
about a third will go for taxes. This leaves about $14.25 received
for each hour's work done. Considered this way, that luxury tub
discussed earlier actually costs more than two hours of time from
the home owner's life per month, or roughly 19 weeks over the life
of the mortgage. This does not include the time spent cleaning the
tub (1/2 hour or more per week, or 2-plus hours per month) or the
time spent earning the money to pay for the electricity and water!
Weigh this cost against a conventional tub.
Likewise, that cathedral ceiling and loft will require 4.5 hours of
labor every month, or almost one full year over the 30-year life of
the mortgage. That may be worth it to you, but weigh it carefully
against the other uses you might make of that money or the time it
represents.
If their budget is drastically out of line, many people simply
choose to postpone their log home dream--"until we can afford
it." But this raises a final consideration: the future
affordability and availability of log homes. I live in the
mid-Atlantic area within a day's drive of most of the population of
the United States. In the past five years, I've seen land prices
skyrocket, building permit requirements and their associated
bureaucracy increase dramatically, and lending requirements tighten
drastically. These trends are not likely to reverse, even though
mortgage interest rates and the construction market may rise and
fall. If you are fortunate enough to live in less developed areas of
the country, these trends may not affect you for some time. But
there are many people where I live who will probably never live in a
log home because land prices are growing faster than their incomes.
Some of my customers have managed to pay for otherwise unaffordable
homes by acting as their own general contractor or providing their
own labor. Mounting regulation of the construction industry and
increasing strictness by lenders is making this trade-off more
difficult each day, however. In some of the counties around me, home
owners must have all mechanical work on their house performed by
licensed professionals. Only a few banks will lend to owner-builders
(not just of log homes but of any kind of home).
For many people, there may never be a better time to buy a log home
than now. This fact makes it especially important to consider the
features the house contains and to evaluate their true cost. Examine
your current lifestyle and the lifestyle you desire in order to
avoid letting something with a high hidden cost prevent you from
realizing your log home dream. |
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