Having recently built a new home, we thought it might be helpful to share some insights we gained in the process. The thought of building a custom home can seem daunting at first. But with an experienced builder as your guide, the process of building a home is very manageable, even thrilling. The reward is you get your exact dream house, finished the way you want it, never lived in by others, and located on the land you found.
Here’s how to make it happen.
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Financing. Start by sitting down with a construction lender and getting a handle on your budget and the bank’s lending requirements. An “all-in-one” loan can provide funds to purchase the lot and build the home, and it converts to permanent financing when construction is complete.
Choose Your Builder. This sounds backwards – shouldn’t you choose your plans first and then let several builders bid on them? No. Competitive bidding between quality builders will do little or nothing to reduce your construction costs. On the other hand, having your builder help select a houseplan will save you tons.
Get a sense of the top 2 or 3 builders in the area. We looked at realtor comments on listings for new/newer homes. If the home was built by a marginal builder the agent probably won’t mention his name. On the other hand, if the home was built by a top local builder, the agent is likely to namedrop in order to add cache to the home. The builder we chose was Bruce Preston.
Schedule a short meeting with your top builder prospects to get a sense of their schedule and whether you can work with their personality type. They can also show you homes they’ve built, and arrange for you to speak with previous clients.
Choose Your Houseplans. Once you’ve made the decision on a builder he can help narrow your list of houseplans you’ve seen on the internet. (Be careful not to waste his time though.) The builder can also give you feedback on your ideas for customizing aspects of a plan.
The Construction Contract. Once the plans are completed the builder can provide a fixed cost for building your house, which includes allowances for the grade of interior fixtures and finishes you may desire. This is set forth in a written contract which identifies the plans and specifications, states the total cost, and sets forth the process for making modifications (change orders) as you go along. There will be change orders. Your builder can guide you, but the more organized you are in the selection of finishes (lighting, floor covering, bathroom fixtures and the like), the more smoothly and less expensive will be the process.
Closing the Loan. With plans, specs and contract in hand, you can return to your construction lender for a pre-construction appraisal and funding of the loan. When the construction loan has been approved and funded and a building permit issued, construction may begin. The lender will work with the builder to ensure that each phase of progress has been completed, inspections have been approved and subcontractors and suppliers have been paid as each draw is released to the builder.
The Construction Process. You might think that if you gave the same plans and specifications to any builder they would all build the home exactly the same. But the plans and specs are only a basic outline for construction. Actual construction requires the builder to make a thousand decisions, applying his judgment and experience (and integrity). It is helpful for the owner to inspect the process more or less daily, but we learned that our builder was almost always right and that we did not have the experience to make those decisions ourselves. Not having the right builder would have been a mistake!
The main steps in the process are generally as follows:
– Plans and specifications selected.
– Construction contract.
– Construction loan.
– Building permit. (Your builder will obtain this for you.)
– Grading and excavation.
– Septic system (if the lot is outside city limits).
– Windows and exterior doors.
– Siding and roof.
– Plumbing, electrical and HVAC ductwork.
– HVAC systems installed.
– Interior doors and trim.
– Floor coverings, plumbing and lighting fixtures, paint.
You should expect construction to take from six to nine months. The more changes you make during the process, of course, the longer it may take to get the home completed.
Moving In. The great thing about a custom home is you get to have it just the way you like it, subject to your budget of course. The downside is it can be hard to visualize certain elements when you’re just looking at a floorplan or samples in a building supply store. The more organized you can be and the more time you can spend in preparation, the more likely you will be to get it right the first time. The right builder can be an enormous help; we only wish we had listened to ours more!