You have been dreaming of this one particular home ever since you were a little girl… It has a wrap around porch, private deck off the master bedroom, this cool little semi-detached octogan/sunroom you plan to use as a study… Oh wait, maybe that’s me. Well, anyway, maybe you have a dream, too. I have been designing my dream home since I was a little girl, I assume everyone is like that but I do realize not everyone grew up the daughter of a builder, so maybe not.
In any case, if you HAVE been dreaming of building a home that is unlike those you’ve seen on the market, then maybe you have thought of building a custom home. And it can be amazing… or a train wreck, so you need to know what you’re doing. Let me STRONGLY encourage you have representation to help you before you get too far involved with this… but I will start with a few generic highlights. Maybe you’ll decide this really isn’t your cup of tea – or it’s for later in life – and move on. Or maybe, you’ll jump right in….
First things first… Where to start. Because when you build a custom home you are usually building on a lot you went out and found all by yourself, I suggest you don’t don’t start with finding the lot.
So back up…
FIRST, determine some basic specs: Style of home, type of finishes, size of house. Sketch it out. List what’s optional and what’s not.
THEN, figure out how much money you are willing and able to dedicate to “Operation Dream House”.
NEXT, interview REALTORs… you want someone that can help you find land, refer builders and put the whole deal together. If the agent doesn’t know about utility access, wells, septic, doesn’t know local builders and lenders that do construction to perm financing skip that agent… He or she is not the right one for you, not this time. Once you’ve found the right agent they should be able to help you understand costs of property, build times, and expenses for building… at least on a “big picture” scale. Then they should be able to refer you to builders. Your agent should be asking you questions like if you have plans, if you want to hire someone to design them for you, etc. Based on your budget and style/size of home, the agent will hopefully be able to connect you to a few builders to interview.
THAT’S WHEN you start looking for a lot. Ask each builder to give you their opinion of the lot, what works, what doesn’t, what’s going to cost more money, how you could save some. This should not only help you choose the right lot but also help you get to know the builder… how do they think? how do they negotiate? Are they really going to help you accomplish your goals? Does he or she really understand your vision?
PUT AN OFFER ON THE LOT… Then comes the offer. Be sure to include a study period, and during that study period get a firm offer from your builder(s). Once you can enter into a contract with your builder, and a firm commitment on the loan, you can buy the lot and begin the build.
A few things you should know…
- Most of the time you will have to put down 20% or more of the final cost to construct the home and buy the lot.
- You should have another significant sum of money available to you for overages and unexpected incidentals. The cost of the home is not going to surprisingly go down, but it might go up.
- When you buy the lot you own it. All risks are yours.
- Most builder contracts will include allowances for things like finishes and utilities. They won’t guarrantee costs they can’t control.
- Builders will have up charges for change orders or anything that disrupts their scheduling.
So you must be really committed to this… it’s not for everyone, but in the end, most people do not get to ever live in their dream home. But you can…. and I can help you.
[If you have decided a custom home might not be in your near future, check out this post on buying a production home from a builder OR this post about the other types of sales we’re seeing in our market in 2014.
Looking to buy or build a new home?
Fieldstone Real Estate