Desire a Modern Design?
Expect These Obstacles

Some 930,000 new houses were sold in America last year, most of them variations on only a few basic themes. There are good reasons for this: Builders figure Colonials, capes and other traditional styles have the broadest market appeal.

But my wife and I wanted something different, so despite a tight budget we set out to build a sleek modern home created just for us. In the process, we discovered that even nationally known architects were eager to design our place, simply because we encouraged them to be as creative as possible. Some were willing to accept a reduced fee for the privilege.

Unfortunately, we also learned that the planets themselves seem to be aligned against unusual design, no matter how good or affordable that design happens to be. Custom homes always cost more, of course, but modern architecture presents some forbidding financial hurdles, as we learned soon enough.

If you want to build a home with a modern or unusual design, be prepared to encounter similar hurdles. You can surmount them if you're determined -- and creative. But the first step is to be prepared.

Expect to borrow less. Although you may think your unusual new house will be worth more than a conventional home of equivalent size -- and ultimately you may be right -- your bank's appraiser is unlikely to agree. In fact, the stranger the house, the more appraisers dock the value. The rationale is that the place will appeal to fewer buyers. Appraisers also may have trouble finding "comparable" homes for valuation purposes. Our house, a sweeping one-level horizontal gem designed by New York architect Walter Chatham, has been "comped" against vinyl-sided ranch homes of similar size simply because they're also on one level. Thus, we've had appraisals as low as 35% of what we invested. Such lower valuations can mean you won't get as big a mortgage as you hoped, so be ready with more cash -- or alternative financing.

Yet there's a bright side to receiving a low valuation. Municipalities often assess new homes higher than comparable older homes, whose assessments may be years out of date. If you receive a low-ball loan appraisal, you may be able to effectively argue for a low property-tax assessment.

Your builder will need some handholding. Contractors can be frightened by unusual designs and unfamiliar materials, so look for one who is excited by the prospect of doing something different. Even then, expect bids on the high side. The reason is that you're asking builders for a fixed-price contract, but the design is taking them into uncharted territory, and they'll build in a hefty risk premium to cover themselves.

Our builder was frank about this, and we trusted him enough to work on a "time and materials" basis instead -- meaning we paid for his labor, lumber and so forth, without any guarantee of what the final cost would be. Thus, we assumed the risk he was reluctant to shoulder, but he worked hard to keep costs down, and we ended up saving $50,000 to $100,000.

Another option to consider is going modular. Resolution: 4 Architecture in New York, for example, has created a series of factory-friendly modules that can be combined into various custom home designs on delivery. Partners Joseph Tanney and Robert Luntz contend that they can produce good modern design this way at something approaching the cost of a quality conventionally built home.

Be prepared for sticker shock. Even if you absorb a lot of the risk for your builder, constructing anything unusual always costs more -- especially if it's modern. Building techniques and construction materials have been optimized over the years to produce standard houses; as soon as you break out of the mold, you're in danger of breaking the bank. For instance, achieving the clean lines and simple look you want can require labor-intensive perfectionism. Polished concrete floors, radiant heat, tall doors and other characteristic elements of modern design cost a lot and sometimes require a level of skill not typically found on most job sites.

To cite a single example, most homes are built with eight-foot ceilings using precut studs and drywall designed to fit this dimension. But our home was designed with unusually high, sloping ceilings. That meant cutting a lot of studs on site. And instead of drywall put up by workers wearing stilts, scaffolding was required--and moved every time a segment was finished. We also needed extra material, and more than the usual amount had to be wasted. To save money, we lowered the ceilings; one side is still high due to the slope, but the change resulted in significant savings.

Have some free time. To keep our project affordable, wherever possible we used off-the-shelf products in creative ways. Most architects typically specify costlier products available from catalogs, so be prepared to run around town and scour the Internet for good, cheap substitutes in keeping with the aesthetic you've embraced. You might even tell your architect that he can design absolutely anything -- as long as all the materials are available at major home centers like Home Depot or Lowe's.

Size up the neighborhood -- and the neighbors. If you're planning to shoehorn a Frank Gehry-style townhouse into a street full of stately Victorians, you're asking for trouble, especially if the owners of the stately Victorians are wealthy. Not only can you expect animosity, but you might even get sued.

In Louisville, Ky., for instance, when Kevin and Ruth Wyatt erected a modern home in a neighborhood of mostly 1920s-style houses, a dozen neighbors filed suit, contending the Wyatts had violated local deed restrictions. One of the plaintiffs called the Wyatt home "a monstrosity." In July 2002, the judge ultimately ruled that so many houses in the area violated deed restrictions that the rules couldn't be enforced against the Wyatts, but he did require them to do something about the glare from some of the corrugated plastic panels on the exterior walls.

You may not even get as far as the Wyatts. Local design restrictions in many places are strictly enforced during the permitting process; some communities even mandate paint colors. You may need to go before an architectural review board, which in all likelihood was created to prevent houses like yours from being built. At the very least you could face social opprobrium. We built our house in an old-fashioned village in New York state, but in a location where nobody can see it. Nevertheless, one village councilman (who was selling modular houses at the time) called it a "piece of crap," and one of our sons' seven-year-old pals said the inside was great, but the outside "looks like a dumpster."

Be creative about resale. The community counts in this department, too. More progressive locales are more likely to harbor buyers who would like your cool modern house. Modernism is especially valued in Southern California, where people seem to be more used to it. One of the lessons of Southern California, in fact, is that architecturally significant homes can bring premium prices. Erik Lerner, an architect turned real-estate broker in Los Angeles, has observed that homes by Frank Lloyd Wright, Pierre Koenig, Clifford Yates and others bring huge premiums over similarly sized conventional houses in the same neighborhood. That's a good reason to consider your architect's current -- and likely future -- fame before hiring him.

And choose a Realtor carefully. Thanks to the renewed interest in all things modern, some agents have begun to specialize in such homes. Tom Holst, for instance, maintains www.Seattlemodern.com and handles modern sales and rentals in the Seattle area. Bob Zaikoski (www.portlandmodern.com) handles modern homes in and around Portland, Ore.

All that said, you may discover, as we did, that building a unique home breeds a special kind of attachment. If all goes well with your project, selling will be the furthest thing from your mind.

-- Mr. Akst writes about design as well as financial matters from New York's Hudson Valley.

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