The phrase “dream home” means different things to different folks. But no one ever seems to have trouble coming up with ideas for what they would want to have in their personal dream home! This makes the design phase the most exciting, as you visualize all the elements and extra touches that will make your new custom home truly “yours.”
But then comes the nuts and bolts – such as setting your budget, applying for financing, hiring the builder, overseeing the construction process and ensuring the finished product is delivered on time and as ordered.
If this is your first time building a custom home, this post can give you a helpful overview of the process from start to finish.
Step #1: Set your budget and apply for financing.
Your very first step – before you do anything else – is to set your budget. This step will tell you if you are in a financial position to begin the process of building a custom home. You want to budget for land, permits, architectural fees, materials, appliances, moving costs…. then add it all up. Then add an extra 10 percent on top of that (because nearly all new construction projects require leeway of about 10 percent to factor in unanticipated expenses). If, after adding on 10 percent, the final budget number still looks workable, it is time to move ahead and apply for financing.
Step #2: Locate the land.
Perhaps you are building on a lot you inherited or one that you already own. Today it is popular to buy a lot and sell the existing house (or tear it down) and build a new home. If you don’t have land, you can work with a realtor or builder to find the right plot for your budget and needs.
Step #3: Buy a floor plan and/or hire an architect.
A cheaper way to go is to find a company that sells ready-made floor plans or select a builder that offers the same. If you envision a truly custom design, you can hire an architect (this is a deep pockets move so tread with caution here).
In some cases, you may be able to find a builder-designer who offers floor plans that can be customized extensively. This is the best way to maximize your new home budget.
Step #4: Select a builder and outline your project.
If you didn’t do this as part of Step #3, now is the time when you will need to select a builder to work with. Your builder will wear several hats during the process, from tracking expenses to overseeing the permitting process to obtaining a “certificate of occupancy” to hiring the construction crew to offering recommendations on fixtures and materials and more. So choose wisely!
You will want to look for a builder with a long track record in the industry and a history of excellent customer service and rave reviews. You will also want to be sure you get along well with the builder and see eye-to-eye on important issues since that builder will essentially become your partner during the process of building your new home.
Step #5: Break ground.
From here, you will work with your builder as your new custom home begins to take shape. Periodic inspections will take place as construction continues, until at last your new home is complete. The speed with which your new home is built will depend on how customized you want it to be and how quickly the city can accommodate the periodic required inspections.
In general, the first step here will be pouring the foundation. Next, your house will be “framed” (when the exterior shell is put up and the underlying utilities pipes and lines are installed). Next comes siding and roofing, followed by insulation, drywall, interior and exterior surfaces, fixtures, HVAC and trimmings.
Step #6: Take out insurance.
At this point, if you haven’t already, it will be time to get insurance to cover your new home. You will also want to file away the warranties on the work, the appliances, the fixtures and everything that comes with insurance and/or a warranty. At this point you will also start paying your mortgage and property taxes.
Step #7: Move in!
This is the most exciting part of the process. It is time for you to move in to your new home!
If you feel a bit overwhelmed at this point, that is nothing to be alarmed about. There is definitely a learning curve that all first-time home builders must go through. But all the hard work will be worth it when you enter your new “dream house” for the very first time!