CAN you do it? SHOULD you do it?

In order to be happy with the process and the result, whether you are considering purchasing a resale home, building in an established neighborhood, OR building from scratch, the starting point is the same. Are you financially (and emotionally) prepared to do this.

Just because you can afford to build from scratch doesn't mean you should do it. In my almost two decades in the real estate business, I've worked with a lot of Buyers, and If I've learned one thing it would be that some Buyers are not good candidates for building. The thing one person thinks is fun and exciting, another Buyer will find stressful and overwhelming. If you are the type who loves walking through stories like Home Depot and Lowes and reading 'How to" books. And you love looking at all the latest in fixtures, faucets, hardware and home technology. And if pouring over floorplans and reviews of the advantages of a tankless hot water heater or solar heating, is the idea of a perfect weekend, then this project might be the highlight of your life. However, if the thought of doing any of this stuff sends you running the other way, you might want to step back a bit and think about it. If you don't want to make these types of decisions and yet you want to proceed, you'll need some help. But even with help, there will still be a lot of decisions only you can make. 

The Joys and Challenges of Building from scratch;

The Joys 

Let's start with the Joys. Building your home is a journey unlike any other. It's a lot like having a child. There will be morning sickness, birthing pains, and it takes time, BUT when all is said and done, the results are well worth the wait. Walking through a home you designed and had built, knowing this is where you are going to raise your family, or perhaps spend the later years of your life, or build your empire, can give you a sense of accomplishment that is hard to describe. YOU created this. You'll be able to look back at once was an empty patch of ground and see something that was your vision. You added an outlet right where you knew you wanted your charging station. You added the coffee bar to the master because you knew you'd love having fresh coffee without leaving your room. You added the deck off the master bedroom in order to enjoy the beauty of the sky at night. You designed it around YOUR lifestyle. And let me tell you that it can be a very satisfying experience. 

The Challenges

Some people have the dream of buying some land, designing their home and building it exactly the way they envision it. And if you are one of those who don't really have to worry about a set budget or the time issue, it can be fun and very rewarding seeing it all come together. But more often than not buyers have constraints. Here are a few of the challenges to at least think about before you begin the journey.

  • The Unknowns  --  Probably the toughest thing about building from scratch is the unknowns. I had one client who was considering building ask me if she didn't like it when it was done could she change her mind. Obviously, my answer was 'no'. After much discussion, I helped her understand that she wasn't a good candidate for building. She was the type who needed to walk through a home and get a physical feel of it in order to know if she liked it or not. Are you okay with knowing the process of a custom build comes with surprises? Everyone involved in the process will try to minimize the surprises but there are things you just don't when you start out on the adventure. And though we might be looking at the brick or stone you are choosing on another home, or we'll see the granite at the quarry, or the flooring at a model home somewhere until you see it all together you want know how it's going to look. You can either find this exciting, or nerve-whacking. Because at the end of the day, it's going to be your house. 
  •  Choosing a Builder and Architect  --  This is a critical part of the process. You have to choose a Builder you can trust. One that will understand your vision. If you don't have a plan then you'll need one. It's possible the builder will have plans to choose from, but if your home is truly a custom home chances are you are going to need an architect. If you know a builder you like, he or she may have an architect they can recommend, or if you are starting with an architect, they may have a builder they can recommend. There are advantages of having the two parties know each other and have previous experience working together. 
  • The Financing  --  Unlike working with a production builder, usually, when you are starting with raw land and selecting a builder you need to be prepared to carry the loan through the building process. You either need to have the cash up front, or you need to work with a lender who does construction loans. A construction loan is different than a home loan and not all lenders work with them. In the case of new construction you will go through the approval process, and then the loan will be segmented into a series of 'draws'. There are points in the process when the builder is given a portion of the money to move onto the next phase of construction. Your payment will go up at each draw as you are now using the money. So if a loan is involved, you, not the builder, are footing the bill and you will be making payments during the building process. This means that if you already are paying a mortgage on the home you live in, or you are paying rent, you will have double payments.  
  • The Land -- If you already have the land you are way ahead of the game. You know the city/county/neighborhood codes as to what can and can't be built there. You know if there is a building site already cleared; if there are utilities, water, sewage etc on the property or nearby. You also know there is street access and how far it is from the street to the building site. and what the topography and soil/rock type. These are elements that will impact what you build as well as how much it will cost to get the land ready for a home to be built on it. For example, a flat lot with easy access to a road and utilities and no deed restrictions will be a lot less costly than a hunk of land on a hillside, with tons of trees (that may need clearing) and no water or sewage access. In this case there is a cost associated with clearing the land, adding the well and septic and perhaps having to build terracing if you are building on a hillside. Basically there are a lot of variables that go into prepping the land for the construction to begin. In other words, building that 'tiny house' on a plot of land might not be quite as inexpensive as you first believed. 
  • Thie Budget --  Unlike a production home where the builder has built the same home dozens of times, with a custom home it's hard to know the final price at the early stages of the process. You have land cost, land preparation costs, depending on the location you may have to dig a well, put in septic, tie into city utilities, etc, all of which will be different depending on the location of the land. When you look at this picture you might find that this part of the purchase takes more than half of the entire budget. You might be lucky enough to decide that's okay and you'll move forward, or you might have to take the 3000 sq ft one story you were building and make it, 2000 sq ft, or the French oak white floors you always dreamed of having, and that second deck outside the master, have to go to make up the different; maybe if you postpone that additional 3 car mancave you can get back in line with your budget. OR if you are financially able, and you really want what you want, you 'suck it up' and increase your budget. 
  • The Time Factor  -- From selecting a builder and architect, and the lot, to the completion of your custom home will take time. Time to draw up plans, agree on pricing, getting the required permits, to the actually building process which actually might be less than the rest of the process. And finally, expect the unexpected. It could be something crazy like finding the neighbors septic in your property. Yep I had it happen. When you are working raw land things might have happened years ago that even the owners of the land didn't know. You also could have inclement weather that holds things up for a few days, or even weeks. And as we experienced some years back, when Hurricane Katrina hit, we didn't get hit with the weather side of things, BUT when workers were needed to rebuild we found many of the tradesman left for the big bucks they could get during the months of rebuilding. That affected many builders' timelines. So it might be a question you ask your builder. How is his or her relationship with the trades? How long have they worked with the same groups. The goal is to get the best idea you can of what to expect in the months it's going to take to complete your home. 




From the first interview that determines your requirements to the moment that you receive the keys, we can help you with the complicated process of buying a home. Don't hesitate to contact us to find out more about how we can make the home buying process easier!