21 Things Buyers Need To Know

Many people find that process too stressful, but others wouldn’t have it any other way. In my conversations with Mike Bower, of the prestigious Design Group (928-282-4702), Mike had some interesting things to say that will be pertinent to your decision as to whether you want to build or buy an existing home. Even though the Design Group architects are generally considered the most expensive in town, Mike’s comments are valuable about any architecturally designed custom home.

First, The Design Group is about six months to a year out before they could begin the design process. Other first-rate architects, like Eric Brandt (928-821-3617) and John Kamas (928-282-4206), I’ve spoken with don't have quite that wait time, but that's starting to lengthen as new construction continues to pick up steam. Occasionally they’ll have a cancellation and you can get in earlier, but obviously that’s not something you can count on.

Second, the design permit processes normally take between six to nine months. Again, you can probably get that done quicker, but the design and detail of the drawings may not be up to the level of quality that you want.

As for architectural fees, typically you’re looking at 10% of the construction costs. Last I heard, The Design Group charges up to 12% and they justify that with innovative design and extraordinary detail in their architectural drawings. Good drawings that can keep the contractors on track can save time and money down the road. In fact, architectural over-sight should pretty much return the fee in construction cost savings. 

The biggest return with the right architect, though, is going to be saving you from fatal design flaws that are very common among builder-designed homes and especially owner-designed ones – and which might cost you big bucks when you go to sell the home. Even without major design disasters, most sophisticated buyers can tell when a home has had a professional architect involved or not and that affects the bottom-line.

Once the design phase is complete and construction begins, figure on a minimum of a year to completion. Year and a half would be more prudent, especially if you have extra features like pools and guest houses. So, figure on at least a couple of years out before your new home is completed -probably more, possibly a lot more.

As for building costs, Mike suggests asking pointed questions about whether the builder’s estimates include landscaping, appliances, and standard or upgraded appointments and amenities.

These days – especially with the current (& hopefully, temporary) sharp increases in building materials costs, $400/sq. ft. appears to be the entry point for building. For a luxury home it’s likely to be well above that if you were to go with a lot of upgrades. That’s for building on a relatively flat lot. Steep terrain can add a bundle in site preparation for buildings and pools.

Mike cited a few homes that were built recently in the $850 to $1200 a square foot range. Admittedly those are way beyond the norm, but they are an indication of what’s happening on that end of the range. Keep in mind, too, that the farther out you go with building timing, the more you are going to be affected by variable materials and labor costs. Those are now on the rise as new construction is up sharply in the area and are exacerbated by International trade policy and a depleted labor force in the construction industry. Very significant costs often overlooked by potential builders are the Impact Fees charged by the City of Sedona for new construction within the City limits.

Those have jumped drastically in recent years and can be as much as $25,000, especially if the lot has access to City Sewer. Outside the City, the Counties also have impact fees - less than the City's, but still pretty heavy. So, do ask for a projection of fee costs, preferably before making an offer or during your due diligence period prior to going hard on the deal. Meanwhile, do peruse the estimated potential new construction fee listed at the end of this report.

For buyers, the one bright spot for costs is Land. Back in 2006, the Median Recorded Selling Price for vacant land in Sedona was $519,000. Now it's about $315,000 and rising.  Keep in mind that vacant land is a non-renewable resource. Sedona is completely surrounded by U.S. National Forest and almost all the land that can be developed pretty much has been.

Currently, luxury parcels run the gamut from as low as $300,000 to well over a million or two. The highest sale in 2021 was $3 million for a ten acre parcel. Realistically, figure somewhere in the neighborhood of $350,000 to $800,000 or more for an exceptional lot.

For a less ambitious and less expensive project, consider a builder’s model home with plans developed with an outstanding architect, Paul Overman. 

For that talk with Chris Dolan of Casa Natural Builders (928-300-1745). Chris’s company is known for its good, nicely designed mid-level Santa Fe style homes as well as fine luxury homes. He works with a couple of different architects to develop models and builds those less expensively than completely custom homes.. Chris estimates a construction time of seven to eight months for one of his models and nine to eleven months for him to build a custom home designed by one the architects with whom he works. Again, I would suggest throwing in a fudge factor especially when, as inevitably happens, the home buyer comes up with changes during the construction process. Count on it costing more and taking longer than you expect. If you’re not in a hurry, that may be within your tolerance limits. One test that is helpful in the “should we build?” dilemma is to check to see whether or not you can buy an existing home for less than it would now cost to build it. In Sedona, that has more often been the case. With the recent shortage of existing homes on the market, the pendulum has, however, swung a bit in favor of building.