Custom Home Building - How To Start?
So, you have made up your mind to build a beautiful custom home and have imagined floorplans and amenities for your dream home? Great news, you have taken one of the first steps, but the road ahead could get a little "bumpy" if you are unfamiliar with the custom home building process and how it differs from a "spec home" or production home builder. Let's take a look at a few things you need to know before you dive in.
Custom Building is Different
To begin with, the entire process of custom home building is often misunderstood. In other words, many potential home buyers start with a plan to build a custom home but eventually buy an already built home or directly working with a builder to modify a home that is under construction. These are "spec homes" or production builder homes that should not be confused with the custom home building. With custom home building, you're locating a standalone property that allows you to build your dream home to your architectural style and budget. The end result will be in every detail of your home from layout to interior and exterior material selections. Every square foot of the home will be custom to your taste, and it will be easy to recognize the custom feel when you're handed the keys to your new home. The home will be unique, as every aspect of it will be a direct outcome of your complete control of the budget and scope throughout the lifecycle of the building process. Typically your journey will include a builder, residential architect, and interior design professionals. The timing and order you engage with these professionals will have an impact on your overall process and building experience.
Order and Sequencing
Prospective custom home buyers sometimes approach the process with sequencing that may not work in their favor. Their first step is to find and buy a perfect lot, then hire an architect to design their home, then take the architect plans to local builders who will swiftly bid out the project, then the buyer chooses the builder with the lowest bid. The fact, however, is that the order is usually reversed, i.e., a home buyer ought to choose a builder, and then together, they "spot" the ideal lot for the project. The process is usually faster and seamless as the buyer can leverage the builder's knowledge in regards to project costs associated with site development, utilities, and zoning. This is part of due diligence, and when done correctly, it can save you significant money in the long run. Your home design and residential architect can come after you've purchased your land. Some architects are very skilled in design but not as knowledgeable of accurate costs to develop vacant land.
Build Site Selection – Custom vs. Spec/Production Builders
A custom Home Builders's experience and knowledge can help you in identifying a lot to purchase as they understand the intricacies of "custom projects" and the costs involved. With spec" homes (homes built by a builder/developer on speculation that they will be able to sell to a consumer), you may not have nearly as much site due diligence. The builder completed it before you were involved and has added those costs to their price tag. The point here is to consider calling your builder early in the process to help consult you in your decision making.
Consider Early Builder Engagement – Detailed Site Due Diligence
Alright, so what does this mean for you, the "custom home buyer" who wants to find their own west Michigan land to build their dream home?
Plan on a competitive but rewarding search for your build site. You may lose or have to pass on a few prospective properties for numerous reasons. Others may outbid you in your local market, but stay the course!
Plan on 4-6 weeks of due diligence with your builder to understand site-related construction costs.
Again, consider engaging your builder early in the process of searching for land. There is nothing worse than rushing to buy your build site to only find out about a variety of surprise costs later in the process since you skipped due diligence. Tread carefully if you think you will estimate these costs on your own whether the land is vacant or requires a teardown of an existing structure. Prospective buyers can lack the expertise to identify the financial pros and cons of a property.
Ask your builder about their residential architecture team, and if they can support a design that aligns with the land you're considering to purchase. You and your builder should have a high-level understanding of the type of home you want to build.
Financing
Don't be hesitate to understand how you're going to finance your project (land + construction). There is a strategy in obtaining your construction loan financing, and your builder will likely have relationships with multiple lenders in your market. You will benefit from understanding financing early in the process.
Summary & Critical Steps
Given the above, the most productive path for a buyer wanting to build a custom home is to first choose the builder they intend to work with, and then work together in strategic sequencing of financing, site selection, budgeting, and residential architecture (home design). You will save yourself significant headaches and probably be way more efficient in achieving your end goal, which is living in your dream home!
Contact our team @ Cullen Custom Homes to help guide you through your custom home building process!
https://www.cullencustomhomes616.com/contact-us