Building Your own Home

If you have finally decided to purchase a new home, there are two new options to decide between. Should I purchase a home in a new subdivision or buy land and hire someone to build it to my specifications? Contrary to popular belief, the costs of latter option are sometimes less than the first. Building a custom home drives the value up substantially.

First, decide on your design and have an architect look over it. This will ensure that the contractors and builders get appropriate blueprints for building. The next step is to draw up a short list of builders. There are several ways to accomplish this, but the most common is engaging a main general contractor who will carry out most of the work and/or engage several subcontractors. Unless you are experienced in building projects, it is best to hire help to control the quality, cost and time scale of your project.

When contracts are drawn, have a real estate attorney review them. When building a new home, it is imperative that you have a contract that protects you should things not turn out the way you plan. You will need to hire a real estate attorney who has had plenty of experience negotiating contracts with architects, builders, and developers. Also, consider creating a system where the contractor gets a bonus for finishing the project on time or early, and is penalized if he is late. If you are paying out of pocket, pay as little up front as possible. Always pay for finished work, so you should try to get a contractor who can afford to spend his own money at the site. That way, you can avoid overpayment, and influence better work from the contractor.

Keep a detailed log of everything that happens. Whenever you communicate with the builders, make it in writing. If you'd like the contractor to change something, make a memo about it. You be keeping a concrete log of everything that happens, good or bad. In the event of a problem, you'll have an exact record of who said what and when.

While the house is going up, visit the site frequently and keep in daily contact with the contractor. This way you'll be able to deal with issues on-site and eliminate problems down the line. Hire a professional home inspector to visit the site and make sure all standards are met. The inspector should visit the site four times during the building: after the foundation is poured, when the walls go up, when the wiring is in, and just before you close on the home.

Don't be afraid to holdback funds if work is completed at closing. Obviously, builders do not like this, but it is your final protection. Consult your lawyer for further details, if necessary.

 

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