You’ve been searching for the ‘perfect’ house for months (maybe even years) and you just can’t seem to find it. If you’ve exhausted all the options for homes available to purchase, it might just be a sign that you need to build a home that is ‘perfect’ for your family’s needs. You’ve also done your due diligence and you are aware that it might be less expensive to buy an existing home (that already has mature landscaping), BUT you’re willing to spend a little more money to build a home so that you get exactly what you want.
Building your new home is an exciting and at times overwhelming experience, but for your builder, it is very routine, which is why you need to be an active participant in all aspects of the home building process to ensure you end up with "YOUR" dream home.
If you have realistic expectations for what caliber and size of home you can comfortably afford, then you are ready to build.
Like I said above, you might never be fully ‘ready’ to build a custom home (just like you’re never fully ready to have your first baby), but if you have the desire and the willingness to put in the time and effort PLUS you’re financially prepared, then go for it!
For most people, building a custom house is a once in a lifetime opportunity and can be really exciting! It can also, however, be intimidating, especially if you're not adequately prepared or have the right team behind you.
If you're thinking about building your custom dream home, here are some questions you should ask yourself before getting started.
It takes an average of six to eight months to construct a new home. This means a gap in living arrangements between the time of selling the old place and building the new one.
Building means choosing the home design, picking out flooring, fixtures, cabinets, countertops, interior trim, exterior trim, and on and on it goes. It means making choices that stay within budget. Managing all the details that go along with building a home takes time, effort, and decision-making.
There are dollar signs to upgrade countertops, fixtures, and appliances. Upgrades can quickly drive up the price. Remember post-move costs like landscaping and blinds.
Understanding how to do a construction loan vs a mortgage, timing, and costs.
Building a house where other new homes are being built, means construction noise and traffic. It will calm down as other homes get completed, but it’s something to think about if your tolerance for noise level and messiness is on the low end. A new home also means putting in new grass and landscaping after moving in.
When comparison shopping, one may find that a new construction home costs more than a similar-sized older home. However, it is important to take into consideration that with a new construction home, there will likely be far fewer repairs and renovations needed throughout the time you are living in the home. Not only is EVERYTHING new, but you have already customized the home so you won’t need to update it to suit your personal style.
There is a lot to consider when deciding what type of home will be right for you – what features you want in the home, what type of neighborhood you want to live in, how much maintenance you are willing to do, and more. Talking to experienced professionals such as Realtors and home builders, as well as doing your own research, can help you make the best decision for you in your new home search.
REMODEL A BATHROOM
REMODEL A KITCHEN
BUILD AN ADDITION
If you are looking at a planned development, find out if there is one builder or if the developer allows you to bring in your own builder. If you are looking at building on a lot that is not restricted to a particular builder, it’s important to research builders in your area to find one that is reputable and stands by their work.
Unfortunately, some builders fail to deliver on their promises, cutting corners on materials, or even failing to finish certain details. Meet with different builders before you make your selection.
It’s important that they are organized and communicate well. Make sure the builder has someone that is communicating with you through every step of the build so you know when your choices must be made and when each phase will be completed.
Check out your builder before signing anything. Find out if there are any complaints registered against them and ask for references from other homeowners. Find out if you can tour a model or a recently completed home and bring someone who can judge the quality of the workmanship.
Many builders work with a preferred lender that offers attractive discounts on closing costs when you finance through them. It’s important to know if the lender is working as a referral or if the mortgage company is owned by the same company that is building your home. If your lender and builder both work for the same company, it’s a good idea to have an attorney review your contracts as an independent set of eyes. If you are not required to use their lender, talk to other lenders to see who can give you the best financing.
Builders use their own contracts that are similar to a regular sales contract but include additional terms specific to the building process, such as at what points during building the contractor gets paid, and what options you have to choose from. Your agent can help you interpret the terms of the builder’s contract before you sign.
This will depend on whether the build is a production home, meaning the builder is building select models throughout the development, or if you have hired the builder to build a custom home. Production homes can be completed in three to four months, whereas custom homes usually take a minimum of six months. Regardless, the builder should be able to give you a timeline outlining each phase of construction. Factors affecting the timeline include weather, delays receiving building supplies, or the number of changes you make along the way.
This will depend on whether the build is a production home, meaning the builder is building select models throughout the development, or if you have hired the builder to build a custom home. Production homes can be completed in three to four months, whereas custom homes usually take a minimum of six months. Regardless, the builder should be able to give you a timeline outlining each phase of construction. Factors affecting the timeline include weather, delays receiving building supplies, or the number of changes you make along the way.
Many people assume their finished home will look like the model or the graphics in the brochure, only to find out that the builder’s landscaping package is the bare minimum, or even non-existent. You may choose to upgrade it or plan to add your own landscaping.
This will depend on whether the build is a production home, meaning the builder is building select models throughout the development, or if you have hired the builder to build a custom home. Production homes can be completed in three to four months, whereas custom homes usually take a minimum of six months. Regardless, the builder should be able to give you a timeline outlining each phase of construction. Factors affecting the timeline include weather, delays receiving building supplies, or the number of changes you make along the way.
Many people assume their finished home will look like the model or the graphics in the brochure, only to find out that the builder’s landscaping package is the bare minimum, or even non-existent. You may choose to upgrade it or plan to add your own landscaping.
Look over the builder’s contract carefully, or have an attorney do so, and note if there is an escalation clause that would allow the builder to pass cost increases onto you in the event that materials or labor costs increase during construction.
Normally a builder offers a warranty lasting from six months to two years, possibly longer for some items. You should know what is covered under the builder’s warranty and for how long. All the major structural items and mechanical systems are usually covered. Appliances are not, but they should come with a manufacturer’s warranty. Damage from weather, shrinkage or expansion of the home or foundation, and anything resulting from the homeowner’s failure to provide maintenance or from work done on the home after construction is not covered.
Usually, there will be a “punch list” of items the builder needs to finish up at the end of construction. This may include a thorough cleaning, touch-up painting, repairing drywall nicks or scratches, last-minute trim work, caulking around cabinetry, changing out or re-keying door locks, and replacing landscaping that didn’t survive planting. It’s important that you go through the home before closing to make certain that every detail is taken care of before you sign the closing documents. If you and the builder agree that they will come back after closing to finish some details, make sure both of you have signed off on the list of what is still to be finished.
Construction loans usually have variable rates that move up and down with the prime rate. Construction loan rates are typically higher than traditional mortgage loan rates. With a traditional mortgage, your home acts as collateral — if you default on your payments, the lender can seize your home. With a home construction loan, the lender doesn’t have that option, so they tend to view these loans as bigger risks.
Because construction loans are on such a short timetable and they’re dependent on the completion of the project, you need to provide the lender with a construction timeline, detailed plans and a realistic budget.
Once approved, the borrower will be put on a draft or draw schedule that follows the project’s construction stages, and will typically be expected to make only interest payments during the construction stage. Unlike personal loans that make a lump-sum payment, the lender pays out the money in stages as work on the new home progresses.
These draws tend to happen when major milestones are completed — for example, when the foundation is laid or the framing of the house begins. Borrowers are typically only obligated to repay interest on any funds drawn to date until construction is completed.
While the home is being built, the lender has an appraiser or inspector check the house during the various stages of construction. If approved by the appraiser, the lender makes additional payments to the contractor, known as draws. Expect to have between four and six inspections to monitor the progress.
Depending on the type of construction loan, the borrower might be able to convert the construction loan to a traditional mortgage once the home is built. This is known as a construction-to-permanent loan. If the loan is solely for the construction phase, the borrower might be required to get a separate mortgage designed to pay off the construction loan.
A construction loan is a short-term loan that covers only the costs of custom home building. This is different from a mortgage, and it’s considered specialty financing. Once the home is built, the prospective occupant must apply for a mortgage to pay for the completed home.
However, there are several other loans available when it comes to home building, from ground-up building to a complete remodel of the entire house. There’s likely a loan out there that’s right for you, whether you’re starting from scratch with a land loan or completely renovating a home.
This type of loan is short-term and is usually issued for a year. It’s meant to cover only the actual construction period. Many lenders don’t offer this type of loan. Why? With so many variables like the builder’s cooperation, getting approvals from local municipalities, and more, these are considered higher-risk loans.
This means they’re harder to qualify for, and the interest rate will likely be higher than a traditional loan. In addition, if you decide to go this route, you’ll have to pay a second set of loan fees when you apply for a traditional mortgage.
Construction-to-permanent loans are a financing option that prospective custom home builders can apply for. Like construction-only, construction-to-permanent financing are one-time loans that fund construction and then convert into a permanent mortgage. During the construction phase, borrowers make interest-only payments.
These types of loans can be much more expensive than traditional mortgages, so if you decide to go in this direction, shop around, compare rates and find the best deal before you pull the trigger.
An end loan is a traditional mortgage loan that a home buyer (if you’re building your own home) can apply for after the new home is constructed. Unlike some of the other construction loans previously discussed, these are offered by most mortgage lenders.
You can get an end loan if construction is complete on the home. One good aspect of an end loan is that the mortgage application for a newly constructed home is the same as it is for any other home.
A home construction loan is a short-term, higher-interest loan that provides the funds required to build a residential property.
Construction loans typically are one year in duration. During this time, the property must be built and a certificate of occupancy should be issued.
Builders or developments often work with particular mortgage companies and will offer discounts on closing costs for using their “preferred” lender. Whether you use the builder’s lender or someone else, you will need to get pre-approved for financing. If you are not financing, obtain proof of funds from your financial institution.
Builders use their own contracts that are similar to a regular sales contract, but include additional terms specific to the building process, such as at what points during building the contractor gets paid, and what options you have to choose from. I will help you interpret the terms of the builder’s contract before you sign.
Questions to consider
Weigh the pros and cons
Choose a homesite
Choose your builder
Questions to ask builders
Obtain pre-approval
Enter a contract with a builder select your options
Walk throughs
Optional inspection
Punch list
Closing day
Obtain pre-approval
Enter a contract with a builder select your options
Building a house can take anywhere from six months to two years, based on a number of variables. Location, style, and size of the floorplan, weather, and even the region you live in will affect the amount of time it takes to complete the build.
While the thought of owning a brand new home built to your exact specifications no doubt sounds tantalizing in this hot seller’s market, it is important to know what you are potentially getting into and how long you could be waiting to move into your new house.
Knowing all the factors and the basic timeline at the outset will allow you to make an informed decision on whether a new home build is a right choice for you.
There are several common sources of delays that new home builds fall victim to. Some of them can be avoided or mitigated with proper planning, but some will simply have to be worked through.
Depending on where you live, the process to obtain the necessary permits and approvals can be time-consuming. Whether it is due to a slightly overworked inspector, restrictions caused by local regulations, or just excessive paperwork that must be filed, delays at this stage are not uncommon. It is important to expect potential delays in this area and pad your timeline to account for them.
Where you choose to build your home will also affect the timeline. You may have found amazing views at your hill-top home site, but bear in mind that all materials and equipment needed to construct your dream home will also have to haul up that same hill, which could cause complications and delays. During the preparation process, clearing and leveling the home site in preparation for the foundation could also run into delays, with the removal of trees, rocks, and other unknown debris.
Inclement weather can also delay construction. In addition to halting work, storms can cause flooding, damage supplies, or make unpaved roads impassable for equipment. Freezing weather and high winds can likewise necessitate the delay of some building steps. Curing the foundation, installing sheetrock, painting, roofing, and installation of sewer lines, among other steps, cannot be done during inclement weather. Although there is no way to plan for such events, it is important to be aware of the possibility of weather delays.
During the busiest building time of the year, summer, it is common for subcontractors to be unavailable on schedule due to the number of jobs requesting their attention. Many critical construction steps, from foundation and roofing to electric and plumbing, require licensed subcontractors who specialize in those fields.
IF YOU PLAN TO BUILD A FULLY CUSTOM HOME, YOU WILL NEED TO FACTOR IN ADDITIONAL TIME TO MEET WITH THE ARCHITECT OR BUILDER AND DRAW UP PLANS, SECURE THE NECESSARY FINANCING AND PERMITS, MAKE ALL DESIGN DECISIONS, AND ALSO BUILD IN A CUSHION FOR INEVITABLE UNFORESEEN DELAYS OR ISSUES.
It stands to reason that larger homes take longer to construct, and the same goes for more intricate designs. Building a truly custom home could experience unforeseen delays due to potential issues that come up throughout the process of building a floorplan that has not been built before.
If you are utilizing a floorplan provided by a builder, they will have constructed the same or similar homes before and will be better aware of, and able to plan for, any potential problems.
Homes with specialized materials could also potentially face delays if those materials are in shortage or are unavailable at the time they are needed.
Additionally, weather issues in the line of transit could lead to shipping delays or even damage to those materials in transit. Incorrect supplies delivered can also create timing headaches.
One of the biggest causes of delays in new construction is an indecisive buyer. Changing the plans halfway through a build, altering material choices, or waiting to make design decisions until the last minute can delay or even halt construction.
Some materials take weeks to arrive once you order, so if you wait until it’s time to install those materials to decide what you want, it will mean halting construction as you wait for them to arrive.
Now that you have selected your own-of-a-kind home, it’s time to find the one-of-a-kind piece of land to place it on… the Homesite. Not every home fits on every homesite, so now that we know the plan, we will show you what homesites your plan fits on. Once you select your home site, it’s time to do a 7-day refundable deposit called a Homesite Reservation. This will take your favorite one off the market for the next 7 days, then we will go over any other remaining questions you have before moving forward to the purchase agreement. Homesite Reservations are important because we can always duplicate the home but we can never duplicate the land.
One of the advantages of purchasing a new construction home is that you get to choose all the features and finishes to customize the home for your lifestyle and personal preferences. This could include everything from the number of bedrooms and baths to choosing whether to add optional features such as an outdoor wet bar or built-in grill on the terrace.
While this can be very exciting for some, it can also be stressful for others as there are many decisions to be made. To help make this process less overwhelming, familiarize yourself with key terms and the selections process and allow plenty of time to make the decisions that will bring you happiness for years to come.
Builders typically offer standard items that are included in the negotiated sales price of the home. This may include items such as standard flooring, cabinets, faucets, appliances, and more. Be sure you are clear about what items are included in the sales price of the home before you sign the contract.
Available upgrades can vary greatly by builder. They may include structural options such as rear decks and finish options such as faucets, fireplaces, and lighting.
Structural options include items that impact how the home is built. Examples include whether you would like to turn a study into an extra bedroom, add a rear deck, or other changes to the home’s layout. If you are purchasing a custom-built home, you will likely have more options to choose from than if you are purchasing a production home. These decisions need to be made early in the construction process.
Finishes refer to items that are the finishing touches of the home – cabinets, countertops, faucets, lighting, and more. Decisions on finish options can be made later in the construction process. Mix and Match vs Packages Mix and Match: Custom home builders may offer purchasers the option to select each individual option in the home or at least a wide variety of them. This is typically called mix and match as you can mix appliances, cabinetry or whatever you desire.
Builders may offer various packages, such as a standard kitchen package vs an upgrade kitchen package. You would not get to choose the individual items in the package (refrigerator, dishwasher, oven, etc) but would select all the appliances as a group. This type of options process may be preferred by those who would like to make fewer decisions and is likely offered more often by production builders.
Due to various factors, builders may begin the construction process on a home site before anyone has purchased it. For example, if a builder is building a row of townhomes and all of the homes in the row have sold except for one, that home still needs to be built along with the others. If that home gets built to completion without anyone purchasing it, it is often referred to as a “spec home.” Spec homes are finished (or almost finished) homes that have a quick move-in timeframe.
Builders typically have a variety of resources to help you in the options selection process. While some builders may have a showroom, others may have model homes that feature various products. Visiting the showrooms and model homes is very useful for seeing color combinations and how the items will actually look in the home. Many builders will also have a dedicated staff member to help you with the selections process. This person will offer guidance on selecting options for your lifestyle, what items do or do not go well together, pricing and more. If construction on your home has started prior to your entering into a contract, it may be too late to choose certain options. The options you will be able to select will vary depending on how far along your home is in the construction process. For example, it may be too late to select structural options but you may still have time to select finish options. Selecting options is time-sensitive as it could impact how quickly your home gets built. Be sure to stay in communication with your builder on the necessary timing for options meetings. Between the time you select the options and the time they are put in the home, occasionally models may be discontinued and options may need to change. Most builders will work to ensure a comparable product is selected and will notify you of any change.
This will be your home for years to come so select the features that suit your lifestyle and represent your personal preferences. Consider your present and future lifestyle: what are your activities, hobbies and entertaining style? Trends will come and go, so be sure to select items that appeal to you personally. And remember that neutrals never go out of style.
It may be easier to justify spending money on upgraded options if you think they will help you sell the home in the future. Items such as upgraded kitchens, smart home technology and hardwood flooring are typically at the top of buyers’ wish list for a new home.
While that extra bedroom or bath may sound great, be sure to check with your lender so you do not exceed your maximum loan qualification.
The next step is meeting to draft and sign a contract, which is designed to protect both parties. Hampton Homes needs to know unequivocally that they will be paid for their work and you also need confidence the home will be completed to the agreed-upon specification.
As you read your contract thoroughly – prior to signing – zero in on these components:
For starters, your document will list how much you have agreed to pay for your home. Make sure you understand what’s included and what may incur additional fees or expenses. Understanding the fine print will help you avoid any hidden costs.
Dates and deadlines are critical. Setting this schedule of important dates helps to avoid delays or incomplete work. You’ll also need to lock down deadline dates. Keep these marked on your calendar as a reminder.
You’ll need to pay your builder an earnest money deposit, along with subsequent payments as construction progresses. You’ll also need to decide on how payments will be made.
Homebuyers need to have a good grasp on what will be used to construct their new home. Getting this insight prior to ordering materials is your best bet to make sure you’re happy with the quality. It’ll be much harder to change orders once materials have been ordered, shipped, and used.
When construction permits are received and your home is released to start, your Personal Builder will contact you by phone:
Introduce themselves and provide you with their contact info
Discuss your home plan and specifications
Give you details about the construction process
Our foundations start with a professionally engineered foundation inspected by the Field Manager and local municipality to ensure strength and peak performance.
Homesite prepared for construction
Footer/foundation built
Rough plumbing installed
Slab poured
Block walls constructed
Many inspections occur during this stage, to ensure your home is being built to that state's building codes as well as our high-quality standards.
Industry-leading construction techniques (including manufactured roof trusses and wall panels) are used to create each home.
Roof installed
Interior walls framed
Everything inside the walls is installed and inspected - Electrical, HVAC, insulation, etc.
All mechanicals, which includes plumbing, heating, cooling, and electrical, will be roughed in following the completion of the framing stage. “Rough-In” consists of supply and drain lines for plumbing, wiring for electrical outlets and switches, and ductwork.
Our construction techniques create framing that allows for optimal insulation. Once all mechanical inspections are completed, we will insulate the exterior walls. Once the insulation is completed and inspected, the drywall will be hung. After the drywall is completed, we schedule the insulation to be blown into the attic.
Drywall
Driveway poured
Now the fun really begins! During this phase, all the choices you made during your selection meeting will come to life. We will install your trim and interior doors and we will also complete all other interior woodwork throughout your home, including cabinets, countertops, and vanities. Your walls and trim will be prepped and painted with your selected colors.
Plumbing and HVAC fixtures
Flooring
Landscaping and sod
Paint touch-up
Finishing touches
Quality control checks
Full cleaning
Your vision is almost reality-The look and feel of your custom home is nearly complete! After the painting is done, the hard surface flooring and carpet will be installed, in addition to the lighting and plumbing fixtures. After all finishing touches are complete, we will perform a final cleaning of your new home.
Once your home is nearing completion, you will meet with your Construction Manager who will introduce you to your new home and discuss how to operate and care for many of the components. Because your new home is a source of pride to both you and Hampton Homes Homes, we want to be certain that your home meets our level of craftsmanship and standards of quality. Start packing boxes—moving day is just around the corner!
We will notify you of your closing date approximately 30 days prior to your closing by emailing you a closing checklist with helpful information and instructions. This letter will have contact information for the different utility companies you will need to contact in order to get service turned on in your name. You will have your closing at the title company office and all paperwork from Hampton Homes will already be there when you arrive at your closing. An agent of the title company will walk you through the paperwork and give you the keys when all the signatures are completed.
Do stay in regular communication with your builder Do come prepared to meetings with any questions
Don’t delay meetings, walk-throughs, and options selection as it could delay the construction timeline
Don’t make other big purchases (such as a new car) before you close on your home
Don’t change your job before you close on your home
Jen was amazing selling our Houston home in May of 2023. She helped us negotiate a purchase and advised us through the entire process in March 2023. She then stepped in and was a part of saving us 30k in our purchase price with when the home didn't make appraised value. We look forward to selling our third home with her at the end of 2023.
She is our Realtor for life!
10/10 We absolutely loved working together with Jen! She is FABULOUS at her job. From the first time we met together, she offered great advise, and went out of her way to make sure we were taken care of. Jen asked the right questions to our seller, referred us to a fantastic lender, and ultimately helped us to decide on our first home. It was a special process, and we are so thankful for her! I'd refer Jen to anyone!!!
Jen is a licensed real estate agent who transforms the process of buying or selling a home from stress-full to stress-free. She specializes in creating an environment of excitement and truly shares in the joy of new homeownership with her clients.
Jen’s personalized approach to real estate has helped buyers and renters move seamlessly across the city and across the country! She helps busy people find the home of their dreams by offering remote home tours, personalized home searches, and a full array of referral partners from movers to insurance providers.
Get assistance in determining current property value, crafting a competitive offer, writing and negotiating a contract, and much more. Contact Jen today.
