Building your own home comes with many benefits over buying pre-built, such as energy efficiency, no repairs, and you get the features you want. However, the process of purchasing land and building is very different from buying pre-built.
To successfully build your own home, consider these six factors:
Thoroughly Research Contractors
The contractor you choose plays a huge role in the construction of your home. A qualified contractor will help design your home’s construction plans and keep the project on budget. Thoroughly research contractors to avoid poor build quality, unfinished projects, and lost money.
Always know what you want before you get estimates, get references from trusted friends and family, interview at least three contractors, and choose the right contractor for your home build. You contractor should be licensed, professional, and have little or no litigation or complaints history against them. Be sure to also get the licenses of their subcontractors. If complaints or litigation history exists, ask the contractor to explain what happened while meeting with the contractor in person. Giving the contractor a chance to explain their side of the story can tell you a lot about their character.
You Will Need A Construction Loan & Mortgage
Construction loans are harder to qualify for than a conventional loan, as they require a lot of trust between all parties involved. They are short term, have higher interest rates, and come with a strict set of requirements, such as:
- Good credit
- A qualified builder
- A substantial down payment
- Proposed home value appraised by a professional appraiser
Before applying for a construction loan and mortgage, you will need a specific building plan, construction contract, cost estimate, and timeline to present to your lender. These construction plans will help the bank determine your eligibility.
Be Prepared For Higher Costs & Have A Realistic Budget
When it comes to building your own home, be prepared to pay higher costs. There is not much room for negotiation when it comes to closing costs or purchase price. You will also have to work closely with your contractor to understand what is included in the base price and closing costs.
These costs will help you establish a realistic budget.
Design For Your Future
Where do you see yourself in 5 years? When designing and building your own home, you will want to design for your—and your family’s—future. For example, if you are a couple who plan to have kids, plan your home accordingly. Will you need an extra bathroom or bedroom?
If you are an older couple whose children have left the nest, perhaps you want your own office or hobby spaces. Whatever you plan, work with your contractor and realtor to establish the best home for you.
Get An Experienced, Reputable Agent
Find an agent that has experience with new construction and finding the land that meets your needs. The agents at Merchant of Homes have years of combined experience helping our clients find the best property for them, be it for a home or a weekend retreat.