Your dream to build a custom home. How does one achieve this dream? There are a few ways to prepare for this endeavor and below will discuss the most important.
Michele Lerner, a real-estate, personal finance and business news writer, outlines these topics in her blog How to Fulfill Your Fantasy with a Custom Home (5/12/2014). Many of the ideas below are from her blog that can be found here: http://www.realtor.com/advice/buy/fulfill-fantasy-custom-home/
Organize Your Financing
Financing a custom home requires a construction loan, something not all lenders offer. If you don’t already own land, you will have to finance the land purchase and then the construction.
You typically need excellent credit and a down payment of at least 20% to 25% to qualify for a construction loan. Lenders typically require more cash reserves for borrowers who are building a custom home to ensure that they have funds in place for any glitches that extend the construction period.
Interview Architects and Builders
Do not rush this process. There are several architectural firms and builders to choose from and it is important to do your research before you chose one. Be sure to research builders and architects in your area, gather resources and get out in the area. If you find a home that you like, see who built it and which architect designed it.
Start with Land and a Plan
If you own land, that is a great start. If you do not, reach out to realtors in your area to assist you.
Your builder should walk the property with you and determine how much preconstruction work is required. This is an important part of vetting your builder. Many builders will come out an assess the land free of charge.
Consider the Neighborhood
Most people who build a custom home believe they will never sell it, but eventually you may want to move to a different area or even build another custom home. It’s always wise to consider resale value when building a home. You want to match the price range and general size of your custom home to others in the neighborhood so that your house doesn’t stand out as oversized or overpriced.
Avoid Delays and Cost Overruns
Planning your home from the foundation to the roof and every single item in between can save you time and money when you are building a custom home. Your decisions about every detail in your home should be made before construction begins so you can reduce the possibility that materials won’t be available when needed, or that you will need to rip out things already built to accommodate a change order.