Recently I worked with clients who had a very specific set of requirements in their new home. This was not their first home and their experience in their homes in the past helped them refine what they desired in their new residence.
After learning what they were in search of we started a 2 prong approach to achieving their goals:
- Vacant land suitable for their new desired residence
- Existing home that could be renovated to accommodate what they were looking to achieve
After an extensive search and touring homes with potential and walking lots with potential, it became clear that building was most likely the most efficient use of money for the area and lot they desired. With this in mind we met with custom home builder, Chad Christin, award winning builder and owner of Christin Homes LLC.
The next step in working with the builder was to determine the right floor plan, design, function and how that would fit into budget. Throughout this part of the process it is important to note that new construction lending is not offered by all banks – we have lenders we have worked with for years who are experienced in new construction and renovation lending to assist in making the process as smooth as possible. Once you have determined your budget, and the builder has an idea on the design and plan, 2 things occur:
- The builder prepares their “sworn statement” to the bank outlining how they will appropriate the necessary funds to build the home. This includes everything from materials, to labor, to the light switch plate covers…it’s everything.
- The details of the land acquisition are worked out. At this point, either the construction loan can be used to acquire the land or cash can be used and then the land becomes part of the equity used in the down payment on the overall construction loan.
Once this is complete, the bank takes over preparing the financing. No building starts until the loan process has been completed – that can take 60 days or more because of all the factors involved. Once the loan has been completed, then the builder is ready to start building.
How long does building take? Timing has a lot involved in calculating it. That said, most homes in the 3000-5000 sqft range will be 8-10 months; those that are larger make take longer. The shortest building time for most builders is 4 months with a builder who builds the same floor plan over and over. Custom home building will most likely be 6 months or more. Also the other important factor is the lot itself – answers the real estate agent and builder work on:
- Does it need any approvals from the city or township?
- Site prep – is it setup already for the desired daylight or walkout – or will additional site work be needed?
- Drive ways, electrical, gas lines and such – what does access look like? What will be necessary to ensure proper driveway and power reach the home?
- Septic, Well city water or sewer – what is necessary for the proper placement of these?
These are factors that are worked into the overall estimates from the builder and will be known early on for the sake of planning and timing.
In the case mentioned above, Christin Homes has been working diligently to ensure each step of the process runs smoothly and soon the clients will be enjoying their new home!
To see some of Christin Homes award wining work – check out their home from the latest Parade of Homes. This custom built home won several awards – including best kitchen and best interior! Click here
To talk about the best strategy for new construction and to put the pieces in the right order – let’s talk further about your needs and wants and craft the best plan to maximize your real estate dollars.