I feel obligated to tell you (again) that I am not a professional contractor. My goal of writing these blogs is to help those who think they might want to build or are planning to build. I realized that there is a lot of information out there when it came to building. There are blogs about decorating, picking house plans, what not to forget while building, how to build the house yourself, etc. What each of these have in common is that it is based off our own experiences. So what I think is important to mention is not all inclusive but it is what I’ve found helpful………..
And one thing I asked when starting to build is…… where the heck do you start when you decide you want to build?!
Step 1: Homework.
You do not start with picking out house plans, or even picking out where you want to buy land. No, you start by looking at blogs like this or talking to people who have built and getting a good idea of what it entails to build. I can’t imagine I am the only one, but when we decided to build it was a completely foreign concept. I knew how to buy a house- well let me rephrase- I knew how to look up houses on a real estate website and then ask my realtor to show me a house, and then have her draw up all the contracts to buy the house. Building a house is starting from scratch and is so unique from state to state, county to county, and township to township. It is really important to ask questions to people who have built near you and to make some calls to your township/county to see what they require.
Step 2: More homework.
Hopefully when you did your Step 1 homework you included curriculum about figuring out what it costs to build a house. If not, let me spell it out: You need to know what you can afford, what it costs to build in your area, and you need to talk to your preferred lender to see what all they need.
I like to work backwards to figure out what I can afford. I think budgeting a house payment at 25% of your monthly income is recommended by Dave Ramsey and it has worked for me so far. You need to have a really good idea of what you can afford. Not what the bank says you can afford but truly what you can afford. If you have never done a monthly budget- you need to start.
You need to know what it will cost you to build. This was semi-fun for me. I say semi because I love all things budget but it was also shocking to know what some things cost (curse you beautiful board and batten!). Our first quote we received was from a commercial builder. They had model homes we could tour and gave us a quote and a spec sheet after about two hours. This was amazing for us because now we had a baseline to measure against. When we met with other builders we knew exactly what to ask for and could compare apples to apples. Plus they build a house every other day in our area so they walked us through the timeline for our county. Even though we choose a different builder it was a great experience for us with fact gathering.
Just because we knew what we could afford and we had got quotes within that budget doesn’t mean the bank is on the same page. I also got pre-approved for our construction loan. We did this the same way we got pre-approved for a conventional loan. So we provided W2’s, tax returns, bank statements, etc. It wasn’t until we went to actually apply for the loan that we provided our building contract, house plans, and cost sheets.
Step 3: Oh my land-a.
Another part of your homework will be figuring out where you are building. No matter if you are searching for land, buying in a sub-divided neighborhood, or building on your family’s farm, land is a big part of the equation from a price standpoint. We bought 8 acres of trees (anyone need firewood???), a long narrow plot, no access to public sewer, and no existing driveway. This meant we knew we’d have extensive costs for land clearing, a septic system, and to put a driveway in. We already knew we couldn’t afford to build a house way back in the woods because that meant buying a transformer for electric, running water back to the house, and doubling the cost of our driveway so the narrow plot was OK for us. My point is, when looking for the land you plan to build on make sure you are thinking about how you plan to get utilities to it and what it will cost to make it house ready.
Step 4 : Stop looking for 4 bedroom houses.
Ok, maybe this is too in the weeds of my own build but I swear this was eye opening to me! When we started to look at house plans I kept putting in the desired number of bedrooms. It wasn’t until we started obtaining quotes that I switched my mindset to looking for square feet. If you are building a custom home you can configure it anyway you’d like. I started to be less concerned with how many rooms there were to concentrating more on the structure of the house. Is it open concept, what is the roof pitch, in general where are things laid out? Once I knew what my budget was I knew I couldn’t afford more than 2,500 square feet. We found a three bedroom plan with a formal dining room that we turned into the fourth bedroom we needed.
Step 5: Go on tour.
I think this is an extremely important part of the building process. When Kyle and I first moved in together we lived in a lovely trailer built in the 70’s or 80’s (?). We had a mouse problem, an insulation problem (it was cold in the winter and hot in the summer), and it was an amazing house for the two poor kids we were. We upgraded after about 5 years to a foreclosed house that we loved. It had three bedrooms, no master bath, color-blind previous owners, and a hodge podge of furniture and fixtures. We added three boys to that house and we quickly realized our once forever house was really a 7 year house. What I am trying to say here is that we did not even know what our preferences were when it came to a forever house. We took a list of things we didn’t like about our old house, what we loved about it, and then married it with what was out there. One way we did that was by just seeing what was out there. We toured model homes, asked friends what they loved about their house, or wished they had. We went to home shows. We used a lot of date nights to look at houses and research together to know what we wanted out of our house.
As you can see, RESEARCH is the first step when building a house. As you might recall in my 5+ Ways to Save Money When Building a House post I said one way you can save money is by planning well. Doing a lot of research up front will make your build run more smoothly and hopefully save you money.
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