Building a custom home isn’t for the faint hearted. The entire experience can be overwhelming but the journey is definitely worth it. Besides, everyone wants to have a custom home that meets their family’s needs.
Before discussing the process of building a custom home, the first thing you need to know is the breakdown of the costs involved in a custom home construction.
Pricing Breakdown of Building A Custom Home
House Structure Costs
These are the costs for building the house including its structure and everything inside the house. The prices vary depending on the area where you live in.
Most custom home builders will give you an estimate for the structure that you design. After that, they’ll provide you with a list of the features included and you’ll have to pay extra if you wish to upgrade any of these features.
Lot Cost and Lot Preparation Costs
This is the cost of the lot where you’ll build your custom home and any closing costs for the land loan settlement in case you buy the land ahead of building.
Meanwhile, the lot preparation costs may include but are not limited to the following:
- Tree and stump removal
- Basement exit
- Electric or gas utilities
- Public water connection
- Public sewer connection
- Removal of existing driveway or any structure
Permit and Development Fees
There are permit costs in every state and city. Ask your custom home builder or from your city office what these costs are.
Loan Closing Costs
If you buy the lot first and get a construction loan after, you need to pay for their closing costs according to your loan program.
Loan Interest Costs During The Construction
You or your custom home builder need to pay interest on the loan during the construction. Don’t forget to ask your builder about this.
Custom Home Building Process
Create a plan
Before anything else, it’s important to create a plan. As you already know by now, building a custom home can be stressful. If you decide to go into it without a plan, you’ll eventually encounter problems that you’ll have no idea how to deal with. But if you’re prepared, the custom home Myrtle Beach building process will be much smoother.
Here are a few things you need to consider:
- Where do you want to build your home?
- What is your preferred lot size?
- How big do you want your house to be?
- Do you want a lot that’s completely cleared?
- When do you want to move into your new custom home?
- How much can you spend every month for mortgage?
- How much are you willing to use from your savings?
- Is building a custom home better than buying an existing one?
Be ready to think about all these things and discuss them with your spouse. You’ll be talking about these things many times. Also, your answers to these questions may change as you get to learn more about what you prefer, the availability, as well as your budget.
The location is one of the most important factors when it comes to building a custom home. You can change anything you want in your house but you can’t change the land where it’s located.
Get Pre-approved and Determine Your Budget
Can you afford to build a custom home? This is one of the many questions that many people are unsure of. Some may find this question easier to answer than others. Before you start building, you need to know how much you can afford.
Get Floorplan Inspiration
This is where the fun begins. You can start to check out floor plans while dreaming about your upcoming home. You’ll find a lot of inspiration online.
Talk To Your Custom Home Builder
You can do this in person or through a phone call. Here are a few questions you need to ask.
- What process do you follow when building a custom home?
- Do you have your own floor plans? If yes, ask if you can make changes to it.
- Can you create a custom floor plan? How much does it cost?
- Do you currently have any other building projects in any neighbourhoods?
- Will you pay the interest on the loan during construction?
- How long will the building project take?
- How long will it take to get permits?
- What are the county impact fees?
- How much will the land preparation cost?
- Is the price variable or fixed?
- What kind of building materials do you use?
- What methods of communication will you use to update us of the progress of the build?
- How often can we visit the build site?
- How much will a change order cost?
- Do you require a down payment when we sign the contract?
Find a Realtor and Look For Land
While you are talking to custom home builders and getting essential info from them, you should also find a land if you don’t have one yet. Look for a realtor, too.
Choose A Custom Home Builder and Sign A Contract
If you like a custom home builder, plan a second meeting along with them and talk about possible costs, floor plan, and etc. Meet with the custom home builder more than once before you sign any contract. Pay close attention to how fast they respond to your emails and calls. Ask yourself if you liked the experience with them during your initial meetings.
Find A Loan Program and Choose A Construction Loan
If you have not yet bought a lot, you will be able to find a suitable loan program that lets you buy a land and create a construction loan from the beginning. If not, you won’t need to find a construction loan that you could roll your land loan into.
Apply for Permits
Once you have your loan as well as the final floor plan, your custom home builder will apply for permits. How long it takes to secure the necessary permits will depend on your city or county.
Choose Finishes and Upgrades
This is one of the best parts in building a custom home but it can also be very stressful. You will choose the materials and upgrades to your house. The process varies from one builder to another. Some builders bring samples while others have design centers.
You will have a meeting with your custom home builder before the project starts. You’ll go over the floorplan, your choices, as well as other upgrades that you want to include. The blueprint will be checked and it’s the perfect time to ask questions or air out any concerns that you may have.
Once the permits have been secured, your custom home builder will break ground. This marks the beginning of your build and the time when they prepare the land and then pour the foundation.
Your custom home builder and their subcontractors are going to work together to build your custom home. At this time, will would make draws from the construction loan. When this happens, your loan payment and monthly interest cost will increase. You can see your home during the build but you’d have to clarify this with your custom home builder because they may have a different policy.
During the custom home building process, most home builders will ask you to make decisions on lighting placements and electrical outlets. You’ll walk through the house and they will take note where you’d like other outlets to be added. You will also be asked where you want to place phone jacks and cables.
At the end of the custom home building project, you’ll do one last walk through with your custom home builder. Take note of any changes that need to be made and anything that should be fixed.
New Loan or Loan Rollover
Depending on the kind of construction loan you get, you may have to have a closing on a new traditional home loan or your loan may roll over into a new one.
The custom home building process may be long and tedious but it’s definitely worth it. There may be a few bumps along the way but it won’t matter once you see your dream home come to life.