When my husband and I started looking into our next home, we weren’t really considering building a house. But, in an aggressive real estate market we couldn’t find an existing home that met our wants and needs. We stumbled upon a listing for a new build that wasn’t quite finished. The listing stated that there was still time to choose our own finishes and it was well within our budget, which peaked our interest. We checked it out and realized that it wasn’t going to work for our family, and of course, it was already sold in a fast moving market. Yet, it got us talking to the builder and one thing lead to the next and here we are building a new house.
We are nearing completion (sort of) and here’s what I’ve learned so far about the process as a rookie home builder…
WHAT TO EXPECT WHEN BUILDING A NEW HOUSE
CHOOSE A BUILDER | Like I said, we stumbled upon our builder by noticing a listing for a spec home, but we did call around to other builders to make sure we were making the right choice. A few things to consider when choosing a builder are availability, reputation, cost, communication style, and of course, the look and style of the homes the builder has already built. A huge determining factor for us was our builder’s reputation for sticking to the budget and finishing in a timely manner. We heard way too many horror stories of people blowing budgets and timelines.
PICK A LOT | We found that many builders develop their own lots or subdivisions, so you can purchase land right from your builder. This was another determining factor when we chose our builder because he owned a subdivision in the area we wanted to build in. Mind you, he does allow other builders to build in the subdivision, but we chose to go with him as he offered incentives for purchasing and building directly with him. We chose our lot based on location and size. It’s a country subdivision with well water, but city sewage. We also wanted more privacy than we had in our first neighborhood, so we picked a lot on a cul-de-sac with a tree-lined backyard and unbuildable wetland directly across.
DECIDE ON A HOME PLAN | As first time home builders, we decided to choose from a plethora of home plans that the builder had built before, knowing that we could use one as a starting point and customize the plan from there. Cost is obviously a big consideration, so we narrowed down the plans to those within our budget first. Then we took out the two-story plans since we knew we wanted a ranch. Next, we looked for an open-concept floor layout. Keep in mind, you can change wall locations, expand rooms, add bump-outs, switch closet locations, change the windows… pretty much anything you want. But starting with a layout that has already been created saves on time and budget.
DETERMINE COSTS | You’ll want a list of everything that is included or not included in the home cost. Our builder had a list of his baseline inclusions and types of finishes. For instance, our starting price included a walk-in tiled shower in the master bath, quartz or granite kitchen counter tops, wood laminate flooring throughout the main living space rather than carpet, and a stone gas fireplace.
CONSIDER UPGRADES | Before you take your floor plan to the bank, you’ll want to consider upgrades you might want to include in the construction loan. We gave a our builder a list of 10 things we wanted to price out. Once we made choices on those 10 items then we asked him to price out other things for us. We tweaked our list as we got estimates back and made choices on what was worth it to us to spend more money on. For example, we wanted a farmhouse sink, lockers in the mud room, upgraded flooring, wider siding, taller ceilings and windows, sidelights on the front door, etc. You can also consider adding on your estimated costs of things like extra landscaping and window treatments.
SECURE A CONSTRUCTION LOAN | Next you need to find a loan officer and take your plans to the bank for a construction loan. I just emailed the loan officer who helped us with our first home loan and he was able to work with us again. The process of securing a construction loan typically takes a minimum of six weeks. You’ll have to provide all the things you need for a regular home loan like W2s and pay stubs. In addition, you’ll need to get the floor plan and detailed plan from your builder which breaks down the costs. I could write a whole blog post about the bank process but I’ll leave it at that for this post!
The next step is for your builder to acquire permits and break ground! Be on the lookout for more about that and the steps to follow in What to Expect When Building a New House Part 2 coming soon!
Of course, the process is going to be a little bit different for everyone, but hopefully this gives you a better picture of what you might expect after you decide to build your own home. It can certainly be overwhelming at times, but overall I’m really enjoying the whole experience!
I’d be happy to try and answer any questions you might have as this was just a brief overview of what to expect.
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