Overview of the Custom Home Building Process

The process of building a custom home is a series of many tasks performed by over 50 suppliers and subcontractors working together, making your dreams a reality. Most people venturing into the acquisition of a new home are embarking on the largest personal financial commitment that they have made to date. All of this added together can give people reasonable cause to want to understand what they are getting into before committing themselves. With this in mind, the best way to understand the process is to break it down into individual parts.

We look at the construction process as being made up of ten main elements tied together in various ways. These elements are as follows:

1. Budget

A price range must first be established. This may be dictated by your bank or personal comfort level. Be prepared to discuss your budget constraints honestly with your designer and builder immediately so guidelines for the rest of the process can be established. Some home buyers prefer not to reveal their budget and their only concern is to know how much per square foot a builder charges for the homes that he builds. It is impossible for any builder to assess a per square foot price to a custom home. There are thousands of options contributing to the final price and are as individual as each home buyers' tastes. If the same house with all the same materials in a "cookie-cutter" fashion was built, only then can a builder develop a price-per-square-foot cost. Home style, amenities, and lot choices vary greatly, each having their own impact on the price of a new home. If five homes were to be built, all having the same amenities and square footage, the most expensive is a ranch style, followed by a first floor master bedroom style, split-level, two-story, and a bi-level being the least expensive.

2. Land

Land is normally the single largest line item in any construction budget. In this area, it usually ends up being somewhere between 25% to 35% of the total package price. Many homes have been built within Treetop Estates and we're generally aware of most situations that we may encounter. Items to consider when purchasing a lot outside of our development would be the terrain, utility hookups, zoning issues, etc., that may impact your construction plans. Many times, an inexpensive lot may contain expensive development costs to make the lot buildable. Some examples of this might be the type of sewage disposal, water supply, wooded lots, long driveways, bedrock, public utility access, etc. All of these are non-issues in Treetop Estates, thereby assuring you that there will be no unwanted surprises along the way.

3. Building Permits/Impact Fees

Many home buyers are unaware of the significant costs today associated with impact fees. An example of impact fees would be public water and sewer hookups, well, septic, recreation fees, traffic impact fees, offsite improvements, etc. It has been my experience to see impact fees anywhere from $0 to as much as $10,000 per lot. This could have a considerable impact on staying within your budget and is a cost that you should be very much aware of when beginning this process. Building permit costs also fluctuate within different municipalities, but for an average home are approximately $1,000.00 in this area. Most reputable builders will have all of these costs in their final price, again reassuring you there will be no unwanted surprises along the way.

4. Home Plans

This is the part of the design process that deals with your family's lifestyle. For example, the location of the kitchen or patio in relationship to the gathering room or office space all need to be considered. Another area that is often overlooked is the basement area. Many clients express a desire to eventually finish the basement for more living space. With this is mind, your builder can design the basement to be as open as possible, provide windows or lighting, bathroom capabilities, etc. Another consideration is converting the attic area into living space. Most home designs have 9' to 11' high attic areas which can be easily converted into additional living space if needed. Home plans can be obtained in many different ways. You can engage an architect or a design/builder to create your plans. Either one can make modifications on some existing plans that they own or start with a blank piece of paper and create a totally unique design. Plans can also be obtained from plan books that are available in most bookstores . Plans can also be created by combining many different ideas from many different sources into a unique plan that fits your needs. Many times the custom home plan process is actually a combination of the above. The home design process should not start until an overall budget review has been agreed upon between the owner and the design team. Before the first pencil meets paper, the designer and owner must come to a general agreement as to what the overall size of the home should be, the general specifications and what the overall budget is for the structure and finishing items. Many plans that are obtained from plan books, although appealing to the eye, may not be cost effective to build, which is another reason to discuss your ideas with the builder up front. The construction process is a series of compromises. You may have to forego one item to get another, otherwise you will not stay within the budget. Those compromises should be made at the beginning of the design and specification process and not as an after thought when the wish list has been finalized and the plans are complete. Cost surprises at the end of the design process are unpleasant.

5. Specifications/Selections

Many of the technical selection items, such as what kind of lumber to use, how the drywall will be glued and screwed, etc., that are necessary to put the home together can be made by your building contractor or designer. Most homeowners are not knowledgeable enough to make these decisions, so it is wise to pick an experienced and trustworthy builder. He can advise you in this area and explain to you the relative quality of the various ways to put a home together and its associated costs. The exciting part of the selection process is the "finishing touch." These are the items that can make your house a home and reflect you and your family's tastes. These items include the plumbing fixtures, light fixtures, cabinets, counter tops, flooring and so forth. Most clients have an idea of how they want their home to look upon completion. By careful planning and budgeting, you can obtain your goals. In your excitement of the construction of your new home many people want to rush out and pick every knob, carpet and light bulb before the construction process starts. As in the design stage I believe you should gather ideas of what you like from your previous home(s), magazines, other people's homes, etc. It is much easier to convey to a builder your ideas with pictures than words and will assure you that you'll achieve the look you desire. It has been my experience that the kitchen is the most important room of the house to most families. I suggest gathering many ideas about how you want to use this area and the look you want to achieve. This will allow you to plan for a breakfast bar area, double ovens, island, stainless steel rangehood, matching cabinet panels to make appliances blend with the cabinetry, recessed lighting, countertop finishes, etc. The "finishing touch" will transform a house into the dream home that you have envisioned.

6. Financing

Speculation home (spec home) financing is usually "turn key". Simply put, when the home is completed a settlement will occur and the ownership will be transferred. Custom home financing is generally handled in several steps. First, you should establish with your lender the amount you are able to finance or amount you feel comfortable with financing for the entire project. It is also a good idea at this time to get pre-qualified by the lender of your choice. Second, find a lot or parcel of land that meets your criteria. Third, provide the lender with a signed contract for the land purchase. Fourth, a settlement date will be established, at which point the land will be acquired by the buyer. At this settlement, through a combination of buyers' funds and guaranteed lender's funds, the buyer and/or lender will pay for the land. Fifth, you and your builder will develop a budget that you will want to stay within, then begin the design process along with the building specifications. Sixth, construction will begin and the contractor will be paid in five or six installments, as per the contract, as the construction work progresses.

7. Scheduling

One of the first questions a homebuyer may ask is, "When will my house be complete?" That is a difficult question to answer with any accuracy. We make every attempt to construct your new residence in an efficient and workmanlike manner keeping your commitments in mind. It has been our experience for the average size custom home the construction period is about 6 months, depending on the time of the year. Additional time may be required to complete construction during the winter months, Thanksgiving to New Years holiday season, unusually bad weather or even custom homes over 3500 square feet in size.

8. Warranty

Many customers are not aware of what is in the warranty they are getting until the end of the project. We think that it is irresponsible for any builder not to discuss the warranty at the initial stages of negotiations and to include the warranty in the contract documents. A warranty, however, is only a piece of paper and is only as good as the builder who is behind it. Many of the warranty heartaches that we hear about in the industry are the direct function of the owner choosing an inexperienced contractor who has a poor track record of building a true quality home and an even worse track record of honoring their commitments to fix the legitimate complaints of their customers.

9. Change Orders

It is our goal to build the home that you want with the design features reflecting the way you live. We are willing to make any changes or modifications at the initial stages of the design or any time during the construction process as long as we are reasonably compensated for our efforts. If we can move a window from one side of a bedroom to the other on the plans before it is built then there will be a minimal charge, if any, for this service. If, however, we have to move the window from one side of the bedroom to another after it as been framed, trimmed or painted, there will be a charge commensurate with the amount of effort the workmen have to expend and how the change delays the project.

10. Contract

Contractual documents typically always take precedence over any verbal commitments. The contracts will detail all aspects in which both the buyer and seller are obligating themselves to. Once you have received our contract we encourage you to take it to your attorney and have it reviewed.

Summary

Hopefully this outline has given you some insight into the home building process. It is our goal to turn your dreams into reality and be proud to be part of our new community.


Treetop Estates | Construction Features | Photo Gallery | Current Offerings | Contact Us
© 2011 Treetop Estates Development Co.