Building a Custom Home
Building a custom home can be one of the most thrilling experiences of a lifetime. Many homeowners revel in the fact that this is a chance to start from scratch to build the home of their dreams.
When deciding to build a custom home, however, it is important to keep a few things in mind. The first thing to consider when beginning this endeavor is getting representation.
A real estate agent can represent your best interests, saving you time, money and frustration. Best of all, their brokerage fee is usually paid for by the builder.
CHOOSING A BUILDER
The best way to find a builder is to get a referral from a friend or colleague. You may also wish to check your local Homebuilder's Association for a list of builders. These builders will be members of this organization, and will thereby subscribe to their code of ethics.
To further narrow your list, contact the Better Business Bureau to research complaints filed against these builders. The most important part of this step is to see how the builder resolved any problems. Things are always bound to come up, and it is important to know that the builder you select will work with you to find solutions to any of these difficulties.
Make sure your builder has a license by contacting the Registrar of Contractors. Get their license number and investigate their reputation.
Find out who the builder sub-contracts with, and repeat the above steps to determine their qualifications and credibility. You will also want to meet your builder's team. Find out who will be directly supervising the construction of your home. See if you want to use the builder's architect, or perhaps someone else. If you want to use someone else, make sure the builder will work with another architect.
You will also want to research your builder's track record on completion dates. How much time will they set aside for your needs? Do they charge you for additional time, or is it included in the original price estimate?
This is the time to thoroughly discuss pricing. From start to finish, pricing will be a 6 - 12 month process. See if the builder honor's today's prices, or will be adjusting for inflation. Is adjustment included in the initial proposal?
You will probably wish to ensure that your builder is flexible, in case you change your mind about details. See if they have a set cut off date to consider changes.
Once you have selected your builder, it is time to find your property.
CHOOSING YOUR PROPERTY/FINANCING
Find the area of town you are interested in, and begin your search for suitable property. The Internet can be a valuable resource for finding available lots.
You can determine the value of land by comparing it to the land and homes sold in the surrounding areas over the last six to twelve months. You may wish to search within the actual subdivision, or one square mile, to get an accurate estimate.
Your builder can help you determine if it is feasible to build your home on this property. They can also help you determine if the land will generate any additional costs.
You will need to work with a lender that specializes in construction loans and permanent financing. Remember, if you have representation, your agent will be able to coordinate these efforts on your behalf. You will have an experienced ally to help you through all these steps.
Realtors® often have solid relationships with the professionals you will be using, so this will make your search a lot easier. Their experience will also help you avoid many of the common pitfalls associated with building a custom home.
