First post for new home construction
This is my first post to document the progress of our new home which officially started construction on January 14, 2008.
In order to provide a thorough documentation on the process, I must revert back to the beginning of October 2007 (planning phase).
The first thing that needs to be done is to find a lot to build your home on. The next is get an architect to to draw up the plans for the house. When finding an architect, you must have a good feeling that he/she shares the same vision when designing the house. With that said an architect will give you several versions for your approval. The first is the floor plan, then the elevation, then the engineering/windstorm. Once you are confident that your plans are perfect it is time to find a builder. When building a home you have two methods to choose from, a flat price or cost plus. Flat price is where a builder gives you a flat quote for your home based on your plans and what type of fixtures, amenities, etc. This is how much you pay, it will include his cut for the home as well. The advantage to this is that you don't have to worry about going over budget unless there is a "change order". Cost plus on the other hand is where gives you an estimate for your home and he will make a commission on every payment that is made. I like to say that he makes a commission on every invoice. Let's use 10% for numbers sake, if a builder builds your home for $250k that means you will be $275k total including the builders cut.
After you have both the plans and a builder secured it is time to talk to the bank about financing the project. After speaking to several banks I decided to go with on over the other because of their good rate and my previous history with them. Once I chose my bank, I needed to close on the lot as soon as possible. You can not close on the lot before all the previous stuff has been done unless you can pay for the lot case or get a separate lone earlier. I wanted to have the new home construction loan also include the lot as well to avoid another closing which also means more closing costs. In my case I was buying from an individual not a developer, which made this step take so long. Plan on 1 month to close on the lost. There are several things that must be done before the closing of the construction loan such as appraisals, title clearing, and legal. The lot will be paid as the first distribution once you close on the construction loan.
Now you are on the road to construction. Plan on all the prep work taking a minimum on 2 months if you really hurry.
In order to provide a thorough documentation on the process, I must revert back to the beginning of October 2007 (planning phase).
The first thing that needs to be done is to find a lot to build your home on. The next is get an architect to to draw up the plans for the house. When finding an architect, you must have a good feeling that he/she shares the same vision when designing the house. With that said an architect will give you several versions for your approval. The first is the floor plan, then the elevation, then the engineering/windstorm. Once you are confident that your plans are perfect it is time to find a builder. When building a home you have two methods to choose from, a flat price or cost plus. Flat price is where a builder gives you a flat quote for your home based on your plans and what type of fixtures, amenities, etc. This is how much you pay, it will include his cut for the home as well. The advantage to this is that you don't have to worry about going over budget unless there is a "change order". Cost plus on the other hand is where gives you an estimate for your home and he will make a commission on every payment that is made. I like to say that he makes a commission on every invoice. Let's use 10% for numbers sake, if a builder builds your home for $250k that means you will be $275k total including the builders cut.
After you have both the plans and a builder secured it is time to talk to the bank about financing the project. After speaking to several banks I decided to go with on over the other because of their good rate and my previous history with them. Once I chose my bank, I needed to close on the lot as soon as possible. You can not close on the lot before all the previous stuff has been done unless you can pay for the lot case or get a separate lone earlier. I wanted to have the new home construction loan also include the lot as well to avoid another closing which also means more closing costs. In my case I was buying from an individual not a developer, which made this step take so long. Plan on 1 month to close on the lost. There are several things that must be done before the closing of the construction loan such as appraisals, title clearing, and legal. The lot will be paid as the first distribution once you close on the construction loan.
Now you are on the road to construction. Plan on all the prep work taking a minimum on 2 months if you really hurry.
posted by Phillip Veale at 9:03 AM
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