Are you considering building a new home? Have you wondered about the process? It can be very confusing, here is some helpful info.
Choosing a builder.
Ask your friends for recommendations, go to open houses to meet builders, look on facebook for builder pages. Many of them post on-going projects. Meet with one or two to see who best fits with your needs and personality. There are many builders in the Mat-Su Valley, some of the best ones are hands-on builders who personally swing a hammer.
How to find land.
Some builders already own land. These are usually larger builders who develop subdivisions and then build on them. Or you can go out and shop for just the right piece. This can take some time. You may need to buy the land yourself or sometimes the builder will buy it for you if you participate with a large deposit.
When you know the basic plan you want to build it’s time for a builders meeting. The builder will explain the process from their perspective and help you understand the many steps. You can change the plan or upgrade the plan. It’s important to finalize as many details as possible before you start. If you make changes after you start the cost will be extra.
You need to know how you are going to pay for it. Unless you have cash you will need a loan. Usually you enter into a contract with a builder who finances the whole construction phase and you close with your long-term mortgage at the end. Some lenders have a single loan process where you get your long term loan at the beginning and the builder is able to make draws on the loan during construction. This may end up to be slightly less expensive for you since the builder does not have to assume as much risk.
Go into contract.
Before you start building you will need a contract with the builder. This will spell out in as much detail as possible the whole process right up to the closing date. It will talk about the plans, allowances, plot plan, builders warranty and more. A non-refundable “notice to proceed” deposit will be required before construction begins.
Do you have the time?
A key factor is time. Construction can take up to six months depending on the situation. Not only is the longer closing time a consideration, you will also need to spend time during construction personally talking with the builder, looking at the site and making some on-going decisions.
You will need to make many choices during the process. Paint colors, kitchen finishes, flooring, fireplace or not, window placement, lighting locations and type, driveway location and finish etc. There will be a LOT of decisions to make, and many of them need to be made fairly quickly to not slow the construction process.
Use Your Realtor.
Your Realtor can help you all along the way to keep things on track so that you will be ready to move in by the contract date. Your Realtor can be a big help when things get stressful along the way, and believe me, they a WILL get stressful.
Close and Move in!
There is a lot of excitement from the beginning to the end, there are disappointments too, but the excitement outweighs the disappointments and seems to build (no pun intended!) the close it is to closing time. When you finally get the keys and walk into your brand new home you will be glad you were willing to invest so much time and energy into building your new home.
Sheila Cote, Realtor