So you want to build a home?
I’m so excited for you! I love building. I’ve built several custom homes myself and every time was a grand adventure.
How do you know that building is right for you? Let me outline the process.
First, in order to make the decision to build a home I would suggest you go house/cabin shopping first.
Perhaps what you want to build is already out there. Nine times out of ten the purchase price of a home is less expensive than what it costs to build that exact same home. So maybe with a little remodeling you can create your perfect home and spend less money than if you built from the ground up! It’s a lot like building only quicker, not as complicated of a process, and often easier to finance. While you’re looking and nothing is coming up right, you’re in the process of finding out what you really want when you do decide to build a home. This is definitely not a waste of time.
While you’re searching, it’s a good time to accept that, “No home is perfect.” Or if it is, you – like most of us – wouldn’t want to spend the amount of money it takes to make it “perfect.” The level of mastery to make a home perfect is just absolutely crazy expensive and time consuming. So, relax. Unless you really have pockets lined with gold, now isn’t the time to be a perfectionist.
If after a thorough search, you discover the home you want doesn’t exist, the first step to build a home is to call a lender. Many construction lenders disappeared in the financial downturn, so you’ll need to be persistent. We know of about four in our area that have lending products to help people build a home. All have a bit different terms, so you’ll need to walk through the various options with them before you commit to any decisions. You may want to begin with the bank you do your banking with if you’re a local resident. If not, call us and we can send you in the right direction.
With most lenders who offer construction loans, your construction loan will need to be rolled into a permanent loan when it’s completed. You’ll want to address that at the same time (unless, of course, you have cash to build a home with). In that case you’ll just need to make sure you have dotted your i’s and crossed your t’s with your builder and know the entire cost of your project. You’ll also need to be prepared to make payments during construction on the amount of money that’s been used to build a home. Some personal budgeting will be necessary. Construction on a custom home/cabin generally never takes less than 6 months. Often it is 10 to 12 months before completion.
Once you have secured a loan, you’ll want to meet with an architect or draftsman. You’ll need to be ready with pencil sketches of your ideal floor plan. Also, a list of wants and don’t wants and a collection of photos and magazine clippings can help your drawings move more quickly to the reality of your dream home.
At the same time, you’ll need to select a builder, or general contractor. We can help with this process as well. We have a wonderful group of builders we can highly recommend. You will want to go and visit other homes that your prospective builder has completed. Talk to homeowners about the builder’s past projects. You need to feel that you can work with this individual for half a year to a year. This is probably the most important next person in your life.
Lastly, you’ll want to nail down your lot or land. It can be a real advantage to have your builder and your designer look at your potential land in order to determine that the home you are envisioning will go well on the chosen spot. There are several items you’ll want to discuss with your builder, such as the lay of the land, the steepness of grade (this will be important in determining where the main floor will be vs. the basement), and what the driveway will look like and potentially cost. Also, you will need to know what types of utilities are available for this lot. Do you need a septic? If so, where will the field-line probably need to be? What about a well? If there are cuts in a bank for a road, or a stream or pond you will have to meet field line regulations. What about the covenants and restrictions? Who controls the zoning for the area where you are plan to build a home, and what are their rules that might affect your construction? Your builder and architect will help you navigate these questions and choose a lot that is just right for you. At this stage they are also helpful in keeping you within your budget. A driveway that meanders from the bottom of an acre lot will be more expensive than a driveway cut in from the top and is 1/3 the distance.
So after you have chosen a lot, it’s time to go back to the drawing board! At this point don’t lose sight of overall value. It is important as you go through the process to check yourself. Ask yourself: am I creating a home that will have a very healthy resale value? Often mistakes are made by custom home-owners when they customize their home too much in a way that doesn’t appeal to a future buyer. Be careful. Life happens and you never know when circumstances will cause you to need to move on to your next adventure, so you definitely want to make sure that new house you just built a few years ago can be sold for at least as much as you’ve put into it (or even better, for a profit)!
The best way to make sure the resale value is there is to have the home designed by someone with a great talent for it. If that’s you, that’s awesome! You can do really well making your money back when it’s time to sell. If it’s not you, you are going to want to find someone who can do a great job for you and trust them to build a home that matches your dream.
So to recap: new construction is not a project for the weak at heart, as you can face some unforeseen challenges during the process. Try to find a home that suits your desires before you embark on the process to build a home. But if you decide the choice to build a home is right for you, go for it! The key is to keep a level head, be prepared to troubleshoot creatively, and make sure you are managing your resources along the way. Just stay focused on the joy that is waiting for you when it’s finished and you are able to move in!
