Building a home is not just about laying the foundation. It is easier and more fun to make a home if you have a plan and a competent builder. These five steps will help you avoid costly errors during construction. Ask questions and share your progress with others who have been through this process.
Budget Planning
Start thinking about your budget as soon as you begin to think about building your home. It would help if you had a realistic estimate of what you can spend on a home and what it will cost. Budgeting is about finding the right balance between your needs and a practical assessment of what you can afford.
You will likely need a construction loan or a mortgage. You can find out the maximum loan amount you are eligible for based on your income and other financial obligations. Most banks and financial institutions will prequalify you to get a loan for construction. This will give you an idea of how much money you can spend.
This is a time-consuming and complicated process that should be started many months before construction starts. You may need to spend as long as two years researching the issues before signing a contract with a builder.
Select Your Lot
Talk to realtors if you don’t have a lot of land for your home yet. They can give you a rough idea of the costs. While land costs can vary depending on the location, it is a good idea to budget for at least 1% of your new home’s cost to purchase the land.
You will need to select the land for your home before choosing floor plans and other details. The soil, drainage, zoning, and other building codes of the area will all need to be considered by you (and any professionals you hire). If your house design must be tailored to the lot, it will cost more. On the other hand, it will save you money if the house can be built using standard blueprints.
Choose a House Plan
Stock plans are often used to build new homes. However, it can be challenging to find the perfect plan. The first step is to choose your preferred house style. Then, take inspiration from the numerous catalogs and, if necessary, consult a builder or other building professional, such as an architect or designer, to help you select the right stock plan for you.
A custom-designed home is a home that has been designed specifically for the family living there. Most custom-designed homes will require the expertise of an architect. Where does the wind blow? How can we cut down on cooling and heating costs?
Get your team together
After you have established a budget and a site for construction, you can begin to build the team of professionals needed to construct your home. If necessary, key players could include a builder, an excavator, a surveyor, and a home designer or architect. Most homeowners start by choosing the general contractor (builder). The pro will then select the other members of your team. You may choose to hire an architect, designer, or engineer first.
The question is: Will you (or can you) be involved in the construction process? Although most homeowners hire a general contractor/builder for coordination, homeowners can also serve as their GC. In this case, you will be engaging and supervising all the subcontractors–excavators, carpenters, concrete contractors, etc.–yourself.
You can negotiate a contract
Make sure you have signed written contracts with each building professional involved in your home’s construction. This includes a contract with your general contractor/builder and the home designer or architect if they are involved in the construction process.
What is included in a building contract? The contract for new home construction will detail the project and list all parts included in the house. It also provides a list of the “specs.” Your house will most likely be constructed with “builder grade” materials. This can be more expensive. Before the contract is signed, make sure you have a detailed discussion about the specifications. Then, ensure that everything is listed.
