Building a house - tips? (1 Viewer)

[Jason Handy]

Hi all,
I have a situation here - the wife wants a new house. Yep, we'd better act quickly or else somebody's gettin' hurt Here is the skinny...we have not picked out a floor plan yet, or a builder so I am soliciting tips from people who may have info to help this process go as smoothly as possible.
1) Are there any good online resources for floorplans. I am looking for something searchable by square footage, number of bedrooms and baths, etc.
2) I have never worked with a builder before. Are there any things I should be aware of when choosing the contractor to build my house?
3) We have a piece of land in mind for the house, but are not sure what the steps are for doing this. I imagine the following: buy land, find builder, choose floorplan, finance construction(?)
I am not sure how we can finance the construction of the house when we still have our current house. Do builders accept promissory notes towards the sale of a current house?
Thanks for all your input.
Jason Handy

 

[Jared_B]

Hey Jason,

My parents had their house built a few years ago, and my wife and I recently bought a new contruction house, so we had contact with our builder.

My parents had to sell their original house, then find a rental while the new house was being built. My house was part of a new development, so we didn't have to pay up front - but we had to choose builder approved plans and options. I don't think a custom home builder will take an IOU.

Do a lot of research on a specific builder. Get references and check them. Ask other home owners what they liked/didn't like about the builder and their house. My parents' builder is still in business, while my builder went bankrupt only months after finishing my house.

 

[Keith Mickunas]

I'm building in a new development, so I don't have to deal with everything you do. My boss on the otherhand did a custom build. I believe his builder bought the land for him, built the house, then he bought it from the builder. In that case the interest on the land why the house is being built will be part of your final purchase price. That could vary from builder to builder though.
Just remember, ask lots of questions. Try to think of everything. That's harder than it sounds. The day after I went to the design center, which was when I needed to choose things like extra electrical outlets and such, a friend suggested to make sure that I have plenty of outlets in the garage. Too late. In my case I can't make changes anymore, and so far my house is just a hole in the ground. Again, that process varies from builder to builder.
Check out this thread when I started mine:
my build

 

[Robert_J]

My wife and I are right in the middle of building a custom home.
1. Try Sullivan Home Plans. There are a lot of other home plan sites but I have met these people in person and they do quality work. We went in with nothing but drawings on graph paper and they turned it into a house. A lot of their stock plans are all over the north MS/Memphis TN area and they look great.
2. Shop around. Check references. Look at other houses they have built.
3. First get pre-approved from the mortgage company. Find out how much new construction costs are in your area. This may limit your plans. Pick a builder. They may have their own list of plans to choose from so if you are dead set on a custom house, pick a flexible builder. We got estimates from the builders using our preliminary scale drawings. This allowed the builder to make suggestions before we went to the blueprint stage. We got the blueprints and put down earnest money on the lot. The mortgage company took our blueprints and the lot into consideration and gave us an appraisal on the future house. The maximum mortgage would be 95% of the appraised value. They sent information to a local bank that is handling the construction loan. We closed on the lot and paid for it out of the construction loan. Work started a few days later. Follow our progress here.
Our builder is not working on a cost plus contract. He gets paid the same no matter what the house costs. That way he has no incentive to pad the construction costs.
Feel free to ask more questions.
-Robert

 

[Bac Bradley]

Find a real estate agent you can trust whom has worked with the builders your are considering. The agent will work in your best interests, and their commission is typically already built into the price of the home.

 

[Jason Handy]

Thanks everybody! I am looking around for builders in my area to ask them a bunch of questions. Boy this is going to be an exciting ride over the next 8 months!

Jason

 

[KyleS]

Also note that a lot of times what happens when you have a custom house built you need to get a building loan and since that is Non-secured (No house yet) you pay a much higher interest rate while the house is being built. Then once the house is done you can apply and get a standard fixed rate loan to take over the building loan, then your rates will come down to normal levels. (This is of course assuming that the builder will not front the money, which is very common, I mean why the heck does he want to front the costs?)
Also try out the website www.coolhouseplans.com
This site lets you put in the square footage, rooms, baths, etc. then it does a search of its database and brings you back a set of results which is pretty cool.
Best of luck building your new house (or having it built) over the next year. This is definetely what my wife and I want to do in the next 5 years and I am looking forward to it.
KyleS

 

[Bill Cowmeadow]

Biggest headache you could ever imagine. Do yourself a favor, find a model thats finished that you like, and buy it. Builders get left holding finished homes all the time, and they are usually very motivated to unload them. That's the way I bought my house.

Good luck.

 

[DennisHP]

Whatever you do, get EVERYTHING in writing. Verbal contracts or handshakes don't mean a thing anymore. Even if your builder says "sure we can make that change" get it in writing along with the extra cost or you may end up sorry.

 

[Jason Handy]

Do yourself a favor, find a model thats finished that you like, and buy it.

Well, thats what we did with our current house and while it looked good at first glance, we had to make a decision so fast that we overlooked some aspects of the design that were not to our liking. I would rather pay a little extra to make sure I have a house that I am completely happy with.
The recent (last few years) drop in mortgage rates has meant more people are able to buy homes. While I think this is a good thing, I also feel like the recent trend is to put up a whole bunch of identical homes on a block and this makes the neighborhood look sterile. It's like we are all crammed into this development, each with our 0.1 acre of land, spitting distance from our neighbor. No way dude, I want something a little more special. I know that sounded snotty, and I should really thank my lucky stars that I have a home to own in the first place, but I look at my house and all of the unusable space and cringe. I look at the fact that these new suburban developers cut corners to save costs by using smaller pipes, cheaper cabinetry and doors, etc. I look at it all and I think HOMES BY WAL_MART
I just want a home that has a tub that you can actually use for a bath. I want a home that doesn't have creaky flooring in every room. I want a home that has a front door that screams something other than "ROB ME!". I am willing to have a few headaches and drop a few extra bucks for quality construction.
Sorry for the rant, but my blood boils over at the thought of the problems I confront every night in my 8 month old home. Thanks for listening!
Jason

 

[Keith Mickunas]

Recent trend? You got to be kidding. This has been going on for decades. I think it was far worse in the 60's and 70's though. The neighborhood I grew up in had roughly 3 floor plans. My builder is using 10 floorplans for a small area. Yeah, there will be three or four houses almost identical to mine and several more that are similar, but it won't be too bad. After all, I got to choose my brick and the paint for the trim, siding, gutters and doors. Its all a matter of finding the right builder. My floorplan has lots of usable space, with very little wasted. I have a great master bath with a big tub and separate shower. The house is pre-wired for a security system and has a very nice door, of course those are cheap and probably not hard to replace. The plumbing and electrical all look good, I've been inside several houses in various stages of the build process so I have an idea what the builder does. Specifically I've been keeping an eye on four houses similar to mine since very early on in their construction.

The fact is there are certain advantages to this type of build. Its easier to review the work of the builder. You don't have to think of every little thing. And you get a fixed price. My price was fixed back in February. Since then they've dropped certain incentives and had two price increases, one of which was due to Bush's tariff increase on lumber.

True the neigborhood will look a little uniform, and I'm not getting a big lot. But if I went up in price there are places available where the lots are bigger and things aren't all the same. Remember, when you do a custom build, you don't get a fixed price until the house is pretty much complete. There's a lot of risk there. Its bad enough that when you build you have no idea what your interest and insurance will be until you get with 60 days of closing. Interest has gone up 0.5% so since I started this less than 2 months ago. What's going to happen between now and July?

 

[Deane Johnson]

Jason:

Whatever you do, get some competent advice from someone in your area that has your best interests in mind. Perhaps an attorney, perhaps a well experienced real estate agent with a good reputation. There are dozens of places for misunderstandings and places where you can end up not getting what you think you're getting.

I believe the prefered way is that the builder own everything until it's finished and you close on the house. I'm not sure how he is protected from you backing out, that's where a local expert comes in.

Right now, this is kind of like buying a bunch of equipment for a home theater. Investigate, investigate, investigate.

Deane

 

[Jason Handy]

Thanks everybody for the insightful comments. In response to Keith, I was a lucky person who grew up in a neighborhood where every house was different. I grew up in the 80's in southern New Hampshire. Moving to Virginia was quite a change because it is much more suburban down here with much more homogeneity in the landscape. That is where I am coming from.
I still think that if my wife and I are smart about things, we will turn out OK. I just got an offer yesterday for a better job, so the ball is preparing to roll!
Jason