House drawing

Building a Home: Important Preparation Steps

Building a house is one of the best ways to get the perfectly customized home of one's dreams. While beneficial, this path to homeownership is a huge undertaking that requires a lot of thought and preparation. Failure to have a plan can be expensive and make the home-building process a nightmare. To avoid a negative experience, it helps to understand some basic steps that can help one prepare and reduce the risk of dire issues.

Plan Your Budget

Planning a budget is one of the first steps someone should take when considering whether to build or buy a house. A budget informs future homeowners of what they can realistically afford versus what they want. It is crucial when deciding on important issues, such as the size and style of the home, for example.

When planning a budget, a person must consider the cost of the land, building materials, permits, and any unexpected expenses, such as potential delays in construction, changes in building codes, and the cost of hiring a general contractor and other professionals. People also often overlook the cost of appliances when planning a budget for building a home.

Planning a budget from the onset is also crucial to obtaining additional financing, such as a construction loan. When a person applies for financing, a well-thought-out budget is something lenders want to see before they approve a loan.

Tips for Budgeting

Budgeting for a new home is a time-consuming process that can be more than a little frustrating. However, sticking to a budget is often just as hard. Some tips to help with budgeting include:

  • Researching all costs thoroughly. This includes researching the costs of building a new home in the desired area, talking to builders and contractors, and getting quotes from multiple sources to help one get a realistic look at what to expect.

  • Allow some wiggle room in the budget. Unexpected expenses happen and when they do, it helps to have a little leeway already built in.

  • Don't leave the selection of materials and amenities up to the general contractor alone. No one knows their budget better than the person who created it. Voice any wishes or concerns with the contractor upfront and comparison shop for materials in advance to avoid anything that may slow down the process.

  • Stick with the budget, not the maximum amount approved by the bank. The purpose of creating a budget is to help one understand what they can and cannot afford. Even if the bank approves your loan, building a house at that cost isn't necessary.

  • Take bids from several contractors before hiring one. Hiring a general contractor is one of the most important decisions regarding a new home's construction. The general contractor runs the show and, as a result, should be professional, experienced, and licensed. While cost is a factor, affordability doesn't always equal skill, and it should not be the basis for hiring or not hiring a contractor. Instead, check the references of three contractors at the minimum and interview each one personally to find the person best equipped to get the house built.

  • Prioritize needs and wants by making a list of needed features, such as the number of bedrooms or bathrooms, and making a separate list of the features that one can live without if necessary. By prioritizing needs over wants, future homeowners can more effectively allocate their budget.

Hidden Costs of Building a New Home

Many hidden costs during and after a home's construction can catch a person off-guard. Before construction begins, these costs often include land prep, such as clearing trees and brush, grading the land, and installing utilities. These tasks can be expensive, especially when building in remote or more rural areas. Additionally, there's the cost of installing the driveway, sidewalks, and other exterior features like laying sod and planting trees. You also need to consider added features like a pool or outdoor kitchen.

Indoors, homes require window coverings, such as blinds or window shades, for privacy. The cost of these coverings can add up quicker than expected, depending on the number of windows. Besides treatments for windows, the cost of furniture and the wiring for Internet, sound, and other smart-home features, are also things that one may not initially consider.

Choose Your Lot

Choosing the right lot is a critical decision for anyone building a home. The lot has a significant impact not only on their ultimate satisfaction once construction is complete but also on the home's value. Location, size, and shape are important factors to take into consideration. Locations, for example, play a vital role as they influence the livability of a house. Some people may want their home near their place of employment or shopping, or, for people with children, schools. The location's safety is also important as most won't want to build in an area known for high crime rates.

It's important to note any natural features or views that may be available from the lot. A lot with a magnificent view, lots of trees, or an adjacent body of water will enhance the overall appeal and value of the finished home.

The slope of a lot, potential drainage issues, and soil conditions are also important factors to review. These things can help determine if a lot is suitable or not. People should also research zoning laws and restrictions that might affect their ability to build a fence or the type or size of the house they want to construct.

Pick a House Plan

Choosing the right lot is only the first step. The right house plan is nearly as important and requires careful consideration. Picking the ideal house plan will require some thinking and shouldn't be rushed. When choosing a plan, one of the first things a person should consider is their lifestyle and needs. Whether a person has a family, likes to cook and entertain, or enjoys spending time outdoors, for example, will influence things such as the number of bedrooms and bathrooms, the size of the kitchen and living areas, and the outdoor living space.

Another consideration is the style of the house. Looking over stock plans or photos of other homes in various styles can prove helpful and inspire new ideas. You may also want to talk with a professional, such as an architect, about a custom design tailored to the lot and one's wishes. Planning for future changes like having children or aging in place is also a benefit of speaking with a professional who can offer knowledgeable guidance and ensure you make the best choices for your future home.

Line Up Your Team

Building a new home requires a team of experts, such as architects, builders, contractors, and subcontractors. The person who traditionally coordinates who works on the team is the general contractor, who is also responsible for overseeing the construction process. The general contractor is also the primary point of communication. They will ensure that everything is running smoothly and according to plan. One should also engage regularly with their team throughout the construction process, including attending meetings and asking for frequent updates.

When planning a new home, people will need to choose the right contractor carefully and should play an active role in selecting the rest of the team too. To start, check with friends or family who may know of or have worked with builders or contractors before. Regardless of where the recommendation comes from, you should research them thoroughly, schedule interviews, and verify their licensing, insurance, and referrals. Upon choosing a team, one should get everything in writing and contracts signed. The contract should outline the scope of the work, give a timeline for its completion, and discuss the payment schedule and any warranties.

What About Nontraditional Construction?

Nontraditional construction refers to building techniques and materials that differ from current, conventional methods. These may include modular and prefabricated construction or alternative building materials like straw bale, earth, or recycled materials. It may also mean innovative design and engineering solutions.

There are pros and cons to these types of construction. Reduced construction time and costs, improved sustainability, and flexibility in design and customization are all potential benefits. On the more negative side, nontraditional construction may include problems meeting local building codes and regulations. It may also require specialized expertise.

Negotiate a Contract

Contracts are legally binding agreements between the person having the house built and the builder or contractor and other professionals. They should outline the terms and conditions and the home's details. It's important to carefully review the contract and negotiate certain aspects, such as the specs, price, timeline, and any areas that do not accurately reflect one's expectations and needs. The contract should also clearly outline each party's responsibilities and be updated when there are changes or modifications.

Bottom Line

Building a new house is a huge undertaking that isn't for everyone. From the onset, one should weigh the pros and cons of building a home versus buying a newly constructed one. While a house built to one's specifications is enticing and has many benefits, people must contemplate the time and responsibilities required from the planning stage to its completion. This includes being the decision-maker regarding any changes and problems that may arise. Ultimately, it comes down to one's reasons for building their new house and their ability, and desire, to create their dream home.