Building a Home: Top Things to Know BEFORE Building

  • By Jeremy Thompson
  • 15 Mar, 2013
Building a custom home requires a large investment of not only money, but also your time and energy. It’s a team effort, with hundreds of different people involved and often those people have different viewpoints and investments in the project. Thorough preparation, planning and coordination is essential to the success of the home building process. […] The post Building a Home: Top Things to Know BEFORE Building appeared first on J. Thompson Builders.
  1. Understand building codes and other restrictions.Local laws regulate the construction of residential properties, and their restrictions can affect your building plan and result in the costs of building to increase. The development where you build may also have its own set of restrictions, often called covenants. Before purchasing property, meet with a city building department official to discuss any codes or restrictions, as well as to receive an explanation of the area’s development plans.
  2. Know the final cost and how to stay on budget.Work with your builder to calculate a realistic estimate, which incorporates all construction costs, plus all the features you would like in your home. After looking at the estimate, you may want to eliminate some of the higher-priced features, such as commercial-grade appliances, to keep the budget reasonable. Factor in an additional 10-20% on top of the total expected cost to account for unexpected expenses. For more about staying on budget, read Home Building: Staying on Budget .
  3. Know your funding availability. Unless you are paying cash, you may have to secure financing for both a construction loan and a mortgage loan. The construction loan is used to pay the builder, subcontractors and suppliers. The mortgage loan is used to finance the home after construction is finished, and is used to pay off the construction loan. Local lenders are sometimes the best source of funding for construction loans as they have an interest in investing in the community. Shop around, and choose the lender with the best offer who is the most likely to approve your application.
  4. Consider resale.The house you build may not be the house you own forever, even if you plan for it to be. With that in mind, you should consider the home’s potential resale value. Refrain from adding so many upgrades that your home becomes overpriced for the neighborhood in which it sits. Also, be cautious of choosing a style which either doesn’t appeal to others or does not align well with the neighborhood. Bottomline: Don’t stick out! Read more tips about choosing a house plan design in Home Plan Design: Don’t Stick Out From the Crowd .
  5. Understand project scheduling.While the goal is to build the house in the quickest time possible, with as little money invested as possible, construction is not a smooth process. Things can and WILL go wrong, and upset the schedule. Each project varies in its process and other variables, including the weather, affect the timeline. For more about project scheduling, read Project Scheduling: What Every Client Should Know .
  6. Know the reputation of your builder.Lots of builders are on the market, actively vying for your business. But do a hefty amount of research to find out which builders have the best reputation. Ask family and friends for recommendations, but also interview past clients of the builders you consider using, and use resources like the National Association of Home Builders ‘ (NAHB) member list.
  7. Finally, DO NOT be passive.Be an active participant in the process. Many decisions are made by you. Have an open dialogue with your builder. If there is something you don’t understand or can’t visualize, you need to tell him. If you are unable or unwilling to make decisions, your builder may have to make those decisions for you. If you do not speak up or participate actively in the process, the risk is that your new home, including its cost, may turn out differently than you planned.
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J. Thompson Builders Blog

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