Building a new home in Puerto Peñasco is a dream come true for many people. While the process is exciting, it can be unfortunately full of potential pit falls and costly mistakes. This article will discuss some of the common mistakes to avoid when building your dream home.
Shopping on Price, Not Quality
We all love to save money so receiving an extremely low bid from a home builder or shopping just purely on price may seem like a good idea but as the old wise man said, if it sounds too good to be true it probably is and as the Mexican wise man said, “You get what you pay for in Mexico”.
There are many reasons how a home builder/contractor will submit a very low-priced bid and the most common reason is illegally paid workers. The contractor will not pay workers according to Mexican Federal law which mandates a Federal Minimum Wage along with many social welfare benefits for healthcare, housing, and social security here in Mexico. If you hire a company that does not follow the Federal Labor Laws you could be fined, potentially have your project shut down, will be responsible to pay any medical bills for any injuries incurred by a worker on your job site and worst-case scenario you can have your home seized. If a company is willing to cheat on Federal Labor Law imagine what he will cheat on during your job.
It is the homeowner’s responsibility to ensure that the company you hire is paying all Federal mandated wages to their workers or risk serious penalties. Using these types of workers, the contractor doesn’t have to pay the workers normal wages and he will pass the savings on to you hence the low bid. When you receive a bid that is dramatically lower than the rest of the competition remember this article.
Choosing a Good Lot in the Right Community
An important step in the process of building a home is purchasing a nice lot in a good location. The community’s association or HOA is just as important so make sure you review all the bylaws to make sure you agree with them. Some communities have fees for construction permission/permits others have water and electric connection fees and they can be a significant cost so make sure you know those costs upfront and that you can afford them and factor in your budget.
Make sure your lot has access to water and electricity if available. If it does not have access to water, you can always truck in water and dump it into your cistern. However, if the lot does not have electricity, I would look for a lot that does have access to electricity or has the electricity assessment paid saving you up to $20,000 USD or more when you go to break ground.
Another important thing to consider is the grade or slope of your lot. You want to purchase a lot that is relatively flat and does not require a lot of fill to bring it up to street level or requires a lot of excavation to reduce the fill down to street level. Grading your lot can be an expensive process and can add up to $10,000-$40,000 in extra costs to the construction price of a home. Try to purchase a lot that does not require truckloads of fill or require truckloads of takeaway and you will save money. To determine how level a lot is take the center height of the street and compare that to height of the lot you are considering for purchase. It should be as high or close to the center high of the street.
Don’t Go It Alone
Going it alone and not hiring an experienced contractor/home builder may seem like a great way to save money but in the end, it is guaranteed to cost you more than you anticipated. There are many highly experienced contractors from the U.S. who come to Mexico and want to build a home and feel that they have the experience to accomplish the task here. But what happens is they soon realize that the materials used to build homes, the language barrier, dealing with workers, culture and navigating the governmental bureaucracy for permits, DRO signatures, etc. are all things that can sabotage a project.
For example, here in Puerto Peñasco, we build homes out of concrete block, poured concrete with reinforced concrete beams. In the U.S. it’s typical to build homes out of wood studs and plywood walls. The construction process is totally different here, heavier, slower, using different tools and requires a tremendous amount of experience. Without that masonry experience working with poured concrete and concrete block, the mistakes will pile up as fast as the extra costs.
Considering that the profit on a home build by a professional home builder is typically just only 10%. A 10% profit is not a large sum of money relative to the total cost to build and the time it will take so save yourself the potential disaster and hire a professional.
There are many reasons why a contractor will submit a very low-priced bid and one common reason is underpaid workers.
An important step in the process of building a home is purchasing a nice lot in a good location with water and electricity.
Going it alone and not hiring an experienced contractor/home builder may seem like a great way to save money but in the end, it is guaranteed to cost you more than you anticipated.