Buying A Home
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Thank you.
Note: This only affects The Nest's community members and will not affect members on The Bump or The Knot.
Anyone built a custom home?
My husband and I are looking to buy a lot to build a house on. We have never built a custom home and are not sure of the whole process. How did you find your builder? Did you go with a big builder or a small company? What type of questions did you ask? Any help/advice would be greatly appreciated.
Re: Anyone built a custom home?
We are on the process of building a custom home.
We asked people for recommendations then drove around and found homes we like and contacted the builder. From this, we ended with 4 builders to choose from. We ended up choosing a builder who only builds 1-2 homes a year and who was highly recommended by a friend who used the builder recently.
Reasons we chose this builder:
1. Communication. We can easily get in touch with the builder. He answers all our questions, helps us make decisions, recommends a better way to do things, ways to cut cost without compromising design/quality, etc.
2. Not a "contract price" builder. We agreed on a flat builder's fee. So our cost is builder's fee plus actual cost. Working with a builder on a contract price gets more complex because you'll have to deal with change orders (which usually have a 15% additional fee for the builder). Anytime you want something other than their set of choices (example, if you prefer a different type of wood flooring) then expect to pay cost + 15%. Or, you want an outdoor kitchen later because you got a bonus as you're finishing the house, then it's usually cost + 15%. FYI, that's how I interpreted the 15% clause on the sample contract I reviewed.
3. We feel the builder we chose is really working for us. I think it helps that his pay is not a percentage of the cost. He does asks a lot of questions and really want to learn the things we want so he can make suggestions, make a wise last-minute decisions on site that we will be happy with, etc.
HTH
I did tons of search online for floor plans. Then I found a local architect's website with a floor plan we kinda liked. We considered modifying that particular plan instead of starting from scratch. I definitely tried to avoid starting from scratch because it would have cost $10-15k to have one done. I prefer to spend that on the house. LOL.
Then we went on an open house of one of the builders on our list. We really liked the layout. So we got with the builder's designer and modified the plans. We did tons of modifications to get everything we want. You wouldn't think it's a modified plan of the house we looked at. lol. So that's how we got the plans. And it only cost us $1k.
No, we did not choose the above builder. There were communication issues I couldn't stand.
The architect above gave us a per sq ft estimate to build his house plan. But the range is so big that I didn't really find it very helpful. I then contacted the builders to give me estimates. The prices I got were pretty close.
Btw, it's really hard to get a per sq ft estimate without a plan. Different plans with same square footage cost differently. Also, don't think that the final cost will actually be around the estimate because it can also depend on the things you like (example, $100k kitchen instead of a $50k kitchen).
Yes, all 4 builders are high end home builders.
We first started by looking at almost every house on the market that met our basic requirements and we could not find one that we really fully loved. Our budget is a bit higher and open - we just couldn't find what we wanted.
We then started to go to a lot of new construction open houses so we could get a feel for a builders style and quality without them there. After 100+ houses we started to get a feel the minute we walked into a new construction and could guess which builder it was lol
The builder chose was not the cheapest price wise, he is well respected, he only builds quality homes with quality products thus his homes always appraise higher than other builders. The quality and appraisal were important aspects to us.
Our builder is like a rock. I need someone who has that personality type because I can get emotional lol We also liked his years of experience. We loved their office / design center.
Being custom construction we custom designed our layout. It took me 2 months working with the architect - going back and forth. I wanted it perfect. I wanted to select everything up front - not during the process with 'allowances'. I spent a few weeks picking out my kitchen/bath fixtures at a plumbing supply/design center. As well as appliances and cabinetry. I wanted to make sure that the style and design that I wanted could be done and that it was integrated.
The lot was more difficult for us to find. We originally wanted to be closer to downtown but wanted .5 acre or larger in a neighborhood that was well established. We did find one (like the last piece of open land available in this particular area which had homes build in the 1900s) but the owner of the land was a PIA to work with and even after an accepted offer they failed to comply with the terms they accepted and we walked away.
We finally decided to change the neighborhood we wanted and have selected one of the builder's lots.
After all that was done the builder sent out for bids from his subcontractors and received the cost for the fixtures etc. He had his own flat fee separate from the cost of building and cost of land.
After we agreed on that aspect then we sent it off to the bank for a planned appraisal.
Right now appraisals on custom construction are soft - because generally most markets have a large inventory of homes. We had hired our own independent appraiser to help us with our choices in house size/rooms/etc. His assessment of our plans was a 50K difference or 5%. Which means that we would have to pay the bank that 50K on top of our required 10% down at closing.
So that made us nervous - we changed a few aspects (ie: in the lower level instead of having a full bath for the 2 guest bedrooms as a jack/jill and a separate powder room ... we removed the powder room and opened the full bath up for access by everyone not just the bedrooms).
We just received back our bank appraisal and they appraised for 1K above the purchase price YAY!!!! A few things that worked in our favor as 1) our builder, we received a higher grade for our builder's known quality of homes, 2) we built a 5K sqft ranch (which is not in over supply in our area but in demand) this earned us a 15K credit above other homes of similar sq ft. and 3) we put in geo thermal which earned us a nice return plus a tax credit which makes it less than if we went with two traditional heating/cooling systems.
We secured our financing last week and we will start our dig in the next couple of weeks. Home should be completed by the beginning/middle of March.
I suspect that every builder has a different process and some of that might be regional/cultural too how they work. For example - I know in NJ a builder would not have their architect work with me for 2 months without any guarantee of build or at least charging us for the time with the architect. Here in IA - I could have walked away any time. They took the risk and on good faith worked with us to design the perfect house for no additional fee.
lol. Looks like we have the same timeline.
We custom built our home. There were a few small companies in our town known for building quality homes. The company we picked was 2 guys who had 2 additional guys working with them.
We had an architect draw up the plans and then submitted them to the builder to come up with a budget figure. We picked out just about everything for the house (not the wood, sheetrock and stuff) but everythign else. Doors, windows, flooring, even the grout!!!
I had both owners home phone numbers and could call them at any time. One even invited us to his house to see some finishing touches we might like. It was a great experience for us and we love our home.
The only down side was that it took up all our free time. I was at the building site daily - some times 2 x a day and when we were not there, we were out looking for all the things we had to pick out. Light switches, drawer pulls, light fixtures, etc...the list is endless. I felt like I lived at the home improvement stores!
Would I do it again? probably not, but then again, this is our forever home!