I looked up the cost of a prefab and while it's a lot less expensive to build a home than it was to buy a home, the estimates don't take into account the cost of the land. When all is said and done, buying an existing home is still probably cheaper than buying the land and having a home built.

You know, in terms of price they should go the groupon route: they know they can offer a prefab for a lot less if 100 people sign up.

I think it would be so exciting to do. I would love to build one of these if I had the time and energy. You do need to follow the same advice you get for any project of this scale and plan on adding another 25% to the budget to cover unexpected things that come up. Though you won't encounter the problems of renovation (dry rot, etc), weather and mistakes will still happen, and that will add to your costs.

IMO, letting already existing homes become abandoned and trashed is less green than building a new "green home."

Yes, I looked into this in the Los Angeles area and ran into some obstacles in the zoning area. These homes are classified the same way that trailers are, so it's not easy to find a spot where it's legal to put them. Also, because of that, I didn't find many building familiar with putting together something like a Rocio Romero house, for example.

I also don't agree with the prefab industry's insistance that these homes don't depreciate while also insisting that they're just like traditionally-built homes. If it's as simple as all the benefits without the depreciation, we'd all be living in prefab homes.

I want to do the same thing, and that Rocio Romero is my favorite! To me, prefab is waaay too expensive for all the hastle, but then again I live in the midwest where houses are a dollar a dozen

I would suggest you do a ton of research before plunging into building any home or even buying one that you want to renovate. The various home rehab TV programs, with the possible exception of Holmes on Homes, make house construction and renovation seem easy, it is not. If you're going to attempt building a prefabricated home, consult your municipal, county. and state zoning and building codes. A number of jurisdictions have prohibitions or regulations that make prefab home construction difficult or impossible.

If you can, visit models of the homes you like and make sure you will be comfortable living in them. Choose your contractor(s) carefully. A recent NY Times article chronicled a near disaster experienced by a family building an LV home in upstate New York: http://www.nytimes.com/2012/04/19/garden/in-the-catskills-a-prefab-box-of-galvanized-steel.html . To avoid disasters and unforeseen problems, engage real experts to advise you on this project. It may cost more, but will save you wasted money, time and effort in the end.

Good Luck!

@toypixie, I don't think any livable homes are being abandoned or trashed. The ones that are torn down to reclaim the land for building are generally unfixable anyway.

@ JOHN H: All good points, but the NY Times article about the LV home seemed less of a "near disaster" than a perfect example of folks who simply didn't do their homework. The couple having the house built went with the low-ball contractor and seemed to not pay any attention to cost-to-build range that Rocio Romero clearly states on her web web site. They spent some absurd amount on their kitchen floor and left the rest unfinished. Hmm...

I built my dream house. It has geo-thermal heating and cooling, tons of natural light, storm water collector and a design that fits my personality, but It was an ordeal. 2.5 years of daily stress. I had 2 full time jobs; my regular job and the job of managing the contractor, bank and architect. I thought I did a good job interviewing and bidding out my project. Look as 87 homes from 5 different builders. Got references and the works and still the project was late, the builder tried to cut corners and when confronted to try to charge extra for doing the work correctly. There is also the issue of dealing with the banks and fees for when the project goes over time and extending the construction loan because the project is behind

The story started with flood damage to my original house. It had to be torn down, we de-constructed the home and only one dumpster of material was discarded. We got a tax deduction for the material we donated to various charities. I hired an architect who was great. The builder, I though was great. I had checked them out, but in the end they tried to cut corners and change the design to increase their profits. If I were to build again I would have gone with the less experienced builder on the list. The rationale for this is the more experienced builder knows where to cut corners to increase profits where the less experienced builder is still trying to make a name for himself.

The Project almost bankrupted me. There were some very tense months at the end of the project where it looked like I would lose my home and land. Finally hired an attorney who helped straighten out the builder (another unexpected cost, but something I should have done earlier).

I look at the pre-fab homes that are now available and know I would rather go pre-fab than new construction.

Keep in mind the amount of engineering that could be required in the Seattle area. My wife and I just bought our first home in Kirkland, and I was in the same position you are now when we started our search, i.e. considering going new pre-fab instead. However, the cost of land out here, coupled with the seismic and other engineering requirements put me off the idea for now, at least for our first home. When we inevitably move in the next 10 years and are hopefully doing a little better financially, I'll reevaluate.

That said, if you can make it work, go for it! I'll bring a keg of Red Hook to your first party!

@Shamwise - reading your story, I just wonder why you think it's still worth it if the house almost bankrupted you. I mean, how is that possibly worth screwing up your financial future?

I would not dare build a home, any home, without having a fat, fat bank account. No matter how diligent and honest your architect -- and I know many diligent, honest ones -- things just end up costing way, way more than you anticipate or estimate, and everything takes much, much longer. That's just the way it is. I'd probably end up in an insane asylum if I tried to build my own house without knowing that even if things go terribly wrong, my financial future is still fairly secure.

Prefab houses are like anything else -- a commodity being sold to us for a company's profit. Go forth and gentrify, people. Renovating a beautiful little bungalow that's fallen into disrepair is far more green than building a new house.

@ Pi. The issue is not my financial responsibility. I am very responsible. The issue came down to the builder who is supposed to purchase material build the home and get reimbursed from the bank. The problem was the builder. He stopped paying sub contractors, Work was not getting done and the bank would not let me fire him without a bank approved alternate. I paid money out of pocket for the subs to keep them from walking and paid out of pocket . A construction loan does not pay out anyone until the work is inspected by the bank and work is considered "done." Towards the end I had to wait for closing to get my money back that the builder should have put out for materials and paying subs. At closing I got back that money and now all is well.
The only reason to pick pre-fab would be the building process.

We built about four years ago, our second home, about a mile from the first. Initially we considered adding a home theater onto the old house, but it would have made ours the most expensive home on the "block" (cul-de-sac, actually) which is always discouraged in real estate. And it wouldn't REALLY be what we wanted.

Then we started to consider building. (This is in New Hampshire, where real estate prices didn't drop as much as some areas.) We had a fair amount of equity in our old place, but land prices were incredible, and often were literally acres in size (too much to keep up) AND often needed utility improvements which we would need to pay extra for, such as bringing in natural gas lines and electricity. We realized we couldn't afford that.

Finally we discovered a little development going in not far from home. It was a brand new cul-de-sac, with six units, technically condominiums on a private street, but with individually owned homes AND lots. Four units were done (one being the model), one was under construction , and one was still an empty lot at the end of the cul-de-sac. After visiting the model several times, we talked to the builders, found out they would build us the house we wanted (within some limitations) on that lot, and we signed on. This would take care of many of the cost-prohibitive components: they already had permits from the town, they already had underground utilities installed, and the lot was smaller and more manageable for landscaping and maintenance.

We used the architect-designed model home as a starting point and made some changes. The poured concrete foundation had a foot of height added so we could have the headroom to finish the walk-out basement to include our home theater, family room, and a full bath (along with closets for the theater electronics and the furnace and water heater.) We had to move some structural supporting walls upstairs because of this, making some shifts in the ground floor plan, and we eliminated an extra closet facing the front door in favor of a more attractive entry niche. Because we raised the foundation, the door from the kitchen into the 2-car garage had to be moved or the steps to the door in the garage (which now were higher and protruded more) would have blocked parking a second car (except a Smart Car, maybe!) Fortunately we caught this problem early in the stud phase, because the builders didn't spot it on their own! (Moral: check often, know your floor plan, and be proactive. They also were going to switch two different sized windows around and cause some other mayhem we had to get fixed.)

We totally redesigned the top floor to include twin masters, one over the garage, which the model home didn't have. We have a kind of "Jack and Jill" bathroom arrangement with 3/4 baths connected by a shared bubble-tub room, since neither of us takes a lot of baths, but we both wanted the option to soak...This took a lot of sketching and messing around, before we could hand off the plan to the architect's draftsperson to make code-worthy.

We wanted to go green as much as possible, too. We managed the high efficiency blown-in insulation, quality windows, recycled carpeting, Energy Star appliances, etc. We failed to get the cement board siding (the builders insisted on maintaining the vinyl of the established neighborhood as agreed to with the Town, and would have charged us more than $10K extra, over the cost of vinyl, to install it...) We failed to get the on-demand water heaters (2) since they would have cost at least $4K each. (A possible upgrade for later.) We failed to get solar panels (too expensive.) Budget made us forfeit some of the green dreams, but we did pretty well... Also we couldn't make the builders use LEED approved site-recycling, since that costs more and wasn't part of what they were equipped to handle -- we bought into THEIR development, after all -- so we had to live with some of their choices.

In the end we are fairly happy with the outcome. I'm not exactly convinced the construction was of the highest quality -- nail heads are protruding in the drywall. They failed to connect the dryer hose to the exterior outlet, and we had a gallon of condensation in the hose within a few months, an very unexpected problem that made the dryer fail to work. Because we added square footage with the second master bedroom, we had to have a second furnace in the attic, and they had condensation drainage pipes run down the exterior of the house which froze solid in the third month of residency, causing the condensation to overflow the tray and drip through the ceiling of my closet, until they came in and re-routed the drainage... (I wonder if we had been able to CHOOSE our builders if research would have caused us to avoid these guys.) We had a one year builder's warranty, and one of the builders actually lived in the first house in the development, so we called on him (at midnight for the frozen furnace drainage!!!) and got things fixed as we could. (Think that's why he just sold his place and moved???)

This was our first (and only!!) building project, and you learn from your mistakes! And you PAY for quality and for "green". (It's going down a bit as more people demand green building, but there are costs for being ecologically responsible -- it takes more man power and time and thought, so being careless is always cheaper.) You make your trade-offs, you do what you can, you get what you get, and you deal. If my partner weren't a pretty well-paid software engineer, this would NEVER have happened.

Good luck with your building project/s! (By the way, pre-fab is only eco-friendly if the fabrication facility is nearby. Shipping home components is costly both in money and in fossil fuels...)

One thing that I didn't see mentioned here is something that I encountered when I purchased my property to build my home--land loans are harder to get than a regular home mortgage loan. Depending on the size of the lot and what you plan on doing with it (sub-diving and selling it off, building one house, etc.) it's also more difficult to secure financing (in Connecticut more than 10 acres is hard to finance if you are building one house on it). I purchased 33 acres and had one heck of a time finding financing to build one house on it, most banks told me they don't offer land loans.

Sorry, I meant to say "sub-dividing it and selling part of it off"

a few years ago we nearly built an LVL, even had a contract on the land. But, after doing a lot of research and as much preplanning as we could, there were just to many possible disasters for us to take the leap. I echo what others have said here - lending can be difficult for these kinds of builds and it's hard to find a contractor experienced with prefab. In the end we felt more comfortable purchasing a known property and paying a little bit more, than with risking the unknown of building.

Thanks everyone for all of the great insights. It is quite helpful and much appreciated.

My parents built their own cabin/home. They are pretty well versed in Real Estate and construction. It was supposed to take a couple of months. It took them 5 years to full finish it. Just unforseen things happened. Mind you this wasn't a pre-fab. They are planning on building again, this time having had the experience, they know what 'not' to do this time around. It's a pretty brave step for any newbie.

My husband and I have been considering the same thing while looking at purchasing our first home in San Jose, CA. We love the design of the Living Home C6 model. It's discouraging to see what a dump you can buy in a city like this for the same price that you could build a beautiful sustainable house. The process still seems daunting though! We are thinking we might go with purchasing a condo or town home as our first place to build equity for the construction loan.