Are you ready to build a new home? A first step is understanding the financials, which we discuss in previous blog, Understanding the Cost of Building a New Home. In it, we talk about costs and expenses and what to expect when building your new home.
You Have a Budget and Solid Financial Backing
With your costs in mind, does your budget line up with your desires?
Have an honest conversation with your banker to ensure you are shopping within your means. Have you heard the saying “champagne taste on a beer budget?” Do your homework on building supplies and the custom finishing touches you want. It will save you heartache later on.
It’s important to not only budget for the usual costs, but also to plan for unexpected expenses that may come up. For example, poor soil conditions can increase costs. If your builder discovers that soil quality requires additional piles than originally planned, that will increase expenses. Soil quality should be tested to ensure the correct size of the home’s footing (the concrete slab your foundation walls sit on). However, this is not done prior to beginning the build. The soil test is completed on undisturbed soil in the foundation hole.
There are also self-inflicted costs, such as increasing your budget to include an extravagant light fixture. In this case you have complete control of how much over budget you go, keeping your spending in check will make the process much more enjoyable. A standard rule of thumb is to allow for 10% over budget. If needed, there are items that are replaceable later on; instead, spend the money on quality windows, insulation, and roof material. You are much more likely to change a carpet than remove windows.
A note about the type of mortgage you will have: When building a home, your mortgage is usually set up as a “draw mortgage.” As your home is being built, instead of receiving the entire amount upfront, your builder will receive “draws” of money at certain stages of construction such as close-up, drywall, finishing, and final. Your bank will send an appraiser to visit your home to confirm that work is completed up to the “draw” stage prior to the funds being released to your builder.
You Don’t See Anything You Like
Frustrated with what is available in the current housing market? You aren’t alone. That is the number one reason people come to us ready to custom build.
In our experience, clients have a list of “must haves” for their forever home. Unfortunately, the homes on the market do not satisfy enough items on their list, making them feel like they are settling and will regret their purchase in the future. This encourages clients to look at custom building a new home where they can fulfill their wish list and more. Their custom home is a better representation of their lifestyle… No settling.
Are you ready to get all the items on your wish list?
You Can Wait for the House to be Built
With a custom built home, there will be wait time. Are you able to wait for your home to be built?
How long does it take to build a home? The answer varies depending on how much time it takes to design the home.
The initial design process is when the builder and client collaborate ideas, perhaps by drawing bubble diagrams (as seen in Custom Build: What You Need to Know: Layout), and then those ideas are discussed with a draftsperson. A preliminary set of prints are completed then reviewed/amended with the client and the builder’s designer. The draftsperson will implement those changes and the client and designer will again review and make changes.
This process will go back and forth until the client is completely satisfied with the finished set of blueprints. The completed blueprints are sent out for pricing and a contract is drawn up and signed off. Permits are then applied for and once approved, the building process commences.
On average a home will take between 10 – 12 months after permits are approved. Time delays due to weather are unavoidable; however, smart scheduling can make up for some lost time.
Start to finish can be upwards of 14 – 16 months. With this time frame in mind, have you planned the timing of your current home sale? If you have, that is another sign that you are ready to build a new home.
You Have a Plan for the Future
Are you looking for your “forever home?” A place to raise your family and make many memories. A home that will serve your needs today and in the future. With a new home build, you are able to plan for the future in ways you cannot with an existing house. For example, if your family’s needs change drastically and you now have a loved one who requires an elevator or ramps, you can plan for that.
While some clients want a “forever home,” some want a home for a certain stage of their life. Perhaps a two story worked for the child-rearing years and a bungalow is what suits your needs now that the children have moved on. Imagine an art/craft room all to yourself or a golf simulator… With all that extra space, sky’s the limit!
Are You Ready to Build a New Home?
If you have solid financials, the desire to build a custom home, the ability to wait for the home to build, and a plan for your future – you are ready to build a new home.
The next step is to do your homework: research everything on your wish list, know your budget and the neighbourhood you want to live in. Most importantly, develop a transparent relationship with your builder. You do not need to settle for anything less than the home you have dreamed of.