Thinking about a different home? You should consider building.
Building a new home is a wise choice. Building has several advantages over purchasing an existing home. When
you build, you are able to customize the home to meet the specific needs of your family. You're able to select
the home's floor plan, materials, fixtures, colors and appliances - and everything is brand new! You may also
be able to build equity in your new home faster than if you purchased an existing home.
This all sounds great, but where does a person start? Follow these simple guidelines and building your new
home will be something you'll never regret.
The old saying goes, "The three most important things in real estate are
location, location and location". So when you're shopping for a lot, finding
the right location is critical. You need to weigh the pros and cons of the
various options. You need to consider things like distance to work, schools
and shopping, then prioritize their importance. Seek advice from your builder,
friends, local government and people in the neighborhood. Here is a checklist
of considerations when looking for the right lot:
- Schools: Are quality schools convenient?
- Day-care: Is quality day-care available nearby?
- Police and fire protection: Is there adequate police and fire protection?
- Shopping: Is there shopping nearby?
- Medical facilities: Is a hospital or medical facility located in close proximity?
- Traffic: Are the streets quiet and safe?
- Recreation: Are there parks and other recreational facilities located nearby?
- Places of worship: Are places of worship convenient?
- Privacy: Does the lot offer adequate privacy?
- Nuisances: Are there any nuisances such as noise, smoke, soot, dust odors or other hazards? Are there any other development plans that could change the community?
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Purchasing a lot is easy. Once you decide on the right location you will need to enter into
a purchase agreement and make an earnest money deposit to effectuate the contract. Closing
(the date that you pay for the lot and receive a deed) is usually 60 days from inception of
the purchase agreement. It is always a good idea to purchase title insurance as of the date of closing.
PRIOR TO ENTERING INTO A PURCHASE AGREEMENT
Before you sign a Purchase Agreement you need to make sure the lot you are considering meets
all of your needs. A building professional may be able to help in this area. These are some
of the details that need to be addressed:
- Zoning - What is the zoning of the property?
- Setback restrictions - What are the side, rear and front setback restrictions?
- Covenants or title issues - Do any covenants or title issues prevent you from building what you want?
- Utilities - Are water, sewer, electricity, gas, cable and telephone brought into the lot? What about garbage pick-up?
- Landscaping - Is the drainage adequate? Is there a need for fill dirt or retaining walls?
- Flooding - Is flooding a potential problem? Are there any flood plain or Resource Protection Area restrictions on the lot?
- Taxes - Are the property taxes reasonable?
- Assessments - Are there any special assessments that will require added charges?
- Financing - Will you be able to acquire the necessary financing?
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It is usually best to pursue financing options as early as possible in your home building
process. There are several quality sources of financing available today, as well as different
types of mortgages. The builder may finance the construction phase or you may need a construction
loan that is then converted to permanent financing. You may also be able to qualify for special
mortgage programs such as First Time Homebuyers, FHA Mortgages or VA Mortgages. The financing of
the home construction may be handled through the builder or through your lender. A mortgage lender
will be able to assist in determining if you qualify.
Building a home could be one of the biggest investments you ever make, so choose your builder carefully.
The local homebuilders association, home show, real estate agents, newspaper home guides, yellow pages
and friends are all sources to locate a builder to fit your needs. Here are some practical tips in finding and
choosing the right builder for your home:
REFERENCES - Get a list addresses and references from the builders you are considering. Drive
by these homes and talk to some of the homeowners. The more people you talk to the better. Prepare
a list of questions to ask the homeowners. Are they happy? How was the working relationship?
Were timelines met? Were problems fixed promptly? Would they buy again from that builder?
PRICE RANGE - Identify the builders that frequently build homes in your price range.
OPEN HOUSES - Go to the Parade of Homes and as many open houses as you can. This will help in
identifying the builders that may best meet your needs. Check the quality of the cabinetry,
carpeting, trim work and paint.
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Most builders will be able to provide design services and will be able to assist you in
developing the right plan for your family. In going through the design process, you will need to
determine the style of home, number of rooms and materials. Based on the design, the builder will
be able to provide a quotation on the cost to build the home.
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