For a lot of us, it's the gold at the end of a rainbow - to build the home of your dreams from scratch. But what should be a super exciting time in your life can also be super stressful. From understanding the construction process, to navigating construction loans and rate locks, there are a ton of questions that come with building a home, and we're here to answer them.
Plan ahead and practice the patience of a Buddhist
You did it! You saved up a sizable down payment, got that promotion at work, and you're ready to build. What you need to keep in mind is that a build job (depending on where you live) can take around 9-12 months to complete. That means if you're thinking about moving next spring, you should have started digging last June. Which really means you should have started working with a real estate agent and shopping builders by April.
You will need to put down a larger earnest money deposit
When you ask a builder to start building for you, they are likely to put the loan into their own name (there are some exceptions, for example you own the lot or you are using a construction loan). In most subdivisions, you will have the luxury of closing once the home is completed. This means that the builder takes all the risk, and they want to be sure you aren't going to back out mid-construction on a house that they've built custom to you. Earnest money requirements vary by builder and depend largely on how custom you're making the home. Some builders will take installment payments on large sums, and your real estate agent can help you navigate this process.
The fun stuff doesn't start until Month 4
There's a lot of work that goes on behind the scenes before your house can start being built. First you will have to pick a builder, a floor plan, and a lot. A good new construction agent can show you multiple builders' work and help guide you to a floor plan that meets your needs. Once you've got a quote from the builder, you can go to contract. At that point, the builder files for a permit which can take over a month. Then you'll have your groundbreaking (we like to have a little champagne for this) and finally you'll see the foundation poured. Despite the champagne, this part of the process is less exciting, but around the 4th or 5th month of construction, your house will get framed! At that point, the home starts to come together quickly, and you can begin visualizing your design selections.
You don't have to have it all figured out up front
A lot of homeowners make the overwhelming mistake of trying to navigate tile selection before they've even gone to contract. Rest easy. Your builder will give you an allowance at contract explaining what is included in your purchase price and you won't need to pick specifics until the house is near framing stage. Most builders allowances give you a wide selection of options when it comes to finishes and if you want to upgrade anything, your agent will simply fill out a change order for the difference. This will allow you to pay cash or lump it into the loan. Your builder and your real estate agent will also make sure that you're on time when it comes to making necessary selections leaving you plenty of time to Pinterest.
Interested in building a home in the Kansas City area? Contact us and we can help connect you with the right builder and walk you through the new home buying process.
2/4/2020 02:08:12 am
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2/14/2020 10:47:56 am
I'm glad you liked the article! I'd love some suggestions on what topic to write about next. If there's a specific real estate question or topic you'd like to learn about, feel free to email me at email@example.com
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The Burke Team
Real Estate Agents with RE/MAX Innovations