When you decide to build…
As many of you know Matt and I are in the beginning stages of building our next home. In September, we found our dream property and our offer was accepted. In December, we closed on the land. Shortly after we started working with our builder to finalize our house plans, budget and timeline. During this process we have learned SO much! Had our realtor not been as knowledgable, or had we not researched as much as we did, we could be in a different spot. So many friends have come up to me and asked how we got this far, so I thought this would be a great first post in our Valvano Homestead Series.
As our build progresses I will give updates along the way, as well as any tips that we have found helpful. Here is the basic outline of how we got this far, and where we will go from here!
Set a budget!
Okay, first and foremost, you need to have a FINAL budget in mind for your home. What monthly payment (unless you are building with cash) are you comfortable with? Many financial experts recommend no more than 25% of your monthly income to be going toward your mortgage. There are many online calculators available to help you work backwards and find the TOTAL amount that you can spend on your build. Don’t forget to factor in taxes as well. For us that could add an additional $1000 to our monthly payment, so it definitely needs to be planned for.
Once your TOTAL budget is set you have to look at the estimated cost to build your home. Meet with builders, talk to friends, and research the hell out of this. The last thing you want is to get half way through your build and realize that you can’t afford that three car garage that your husband has been dreaming about. On average you will find that building a new home right now will cause upwards of $150 per sq. foot. That also doesn’t include a well or septic. If you will need those you can easily add $20k or more to that cost. You will be shooting in the dark unless you know what you can and cannot afford.
Find your bank…
Did you know that many banks will not give you a land only loan? There are also very few banks that will hold a construction loan. Sometimes, the builder may hold the note until the home is finished, and then it will be “sold” to you. It all depends on your situation. Usually your realtor will have some good ideas for you, but if not, be sure to know where you stand financially.
Determine your needs and wants…
This is not quite as black and white. When we started looking for a new home we were open to building or buying a pre-existing home if it met all of our needs. We were open to looking at anything really…and that got to be frustrating for us and for our realtor. We were not crystal clear with what we wanted, and that made it very hard for him to help us. Any home that he sent to us didn’t check off all of the boxes in my head, and I immediately shut it down. I was not being honest with where my heart was.
We wanted more privacy and property than what we currently had, but I really wanted acreage. I wanted the ability to build a party barn, have bon fires, play loud music, grow a big garden, and get some fun ATVs or snowmobiles someday. The tricky part was that I also wanted the ability to safely walk or ride our bikes on our road, be close to our parents and town, but also close to the express way for our jobs. This was no easy feat. However, when I was honest with myself and our realtor, finding that dream property seemed that much more possible.
What do you want?
Do you want a small lot in a development? Or do you want acres to roam? The difficult part with buying land is that there are so many more factors to think about than what you’d initially imagine. Many lots require you to drill a well or put in a septic tank. To some this is no big deal, but to us it was. We drink a TON of water, and want to be able to have safe (and tasty) drinking water from our sink. So town/city water was a must for us. We toyed with the idea of a septic, but really were hoping to find property with public sewer.
Determine the legalities…
What is an easement?
To continue, many properties have laws that protect the lot or areas of the lot, for certain reasons. These are easements, wetlands, or forever wild. We looked at an awesome little lot right in the city that was super cheap. We could’ve paid cash for it, and we were so excited! Well, when our realtor got the land survey there was a city easement on one side of the property, and wetlands on the backside, leaving nearly no room to build a house. When our diligent realtor called the city questioning this, the supervisor suggested we keep looking because although other parties have submitted building plans, they had no intention on accepting them with the easements present. We literally could’ve bought this lot and not been able to build a darn thing…. Thank goodness for research!
The lot that we bought does have an easement due to an underground oil line on it. The line has clear markings on the land survey and has a direct contact for the company that owns the line. Our realtor had called them before we even arrived to the property and had all the details ready for us. My husband and myself have since talked to our representative there a few times and are so happy to have already established this relationship, before we started building. This easement doesn’t interfere with any of our building plans and actually helped us score a deal on the lot.
What is a setback?
Lastly, when thinking about your needs, its important to know that your town/city has requirements that must be met in order to build. For instance, in some areas of my town, you have to own at least 2 acres in order to build a house on the lot! Seems crazy, but it is true! Furthermore, they have “setback” requirements for your build. So, you cannot build your structure within X amount of feet from the front, back, and sides of the lot.
This came into play for us when a lot was for sale (actually just two house down from two of our best friends house!) that seemed like a great opportunity. When we got the lot dimensions though we were able to see that it was too narrow to fit the floor plan that we loved and meet the setback requirements, so we had to check it off the list.
Find your builder
This is absolutely one of the most stressful and most fun parts of the experience. We “interviewed” a handful of builders before we chose ours. We also had them quote our house and detail exactly what that all included. For the same exact plan, we received quotes that ranged up to $100k! It was insane. In the end, we choose a builder with a good track record, and great communication. There had been one builder that we really liked in person, and that we had a high school connection to, but he was terrible at returning our emails. So, that was the end of that relationship. You HAVE to be able to reach your contractor in a reasonable amount of time. Our builder always returns emails within 24 hours, but answers his phone nearly every time.
The other thing to consider here is the kind of builder that they are. Do you plan to build a modular home, stick built, panel built, or in a neighborhood with pre-determined builders? We chose a builder that uses a panelization system. This means that they build the house in panels in a warehouse, and deliver it like a jigsaw puzzle to your site. Then, our local contractor will handle the assembling of the house. This company will save us a good deal of money, and has impeccable reviews. Also, the lumber will not be exposed to the weather for nearly as long as a stick built house because the house shell will go up in 3 days!
If you are building in a neighborhood, there is a good chance that your builder is already decided for you. In this case, be sure to do a lot of research on that builder and the products that they use. It is also a great idea to ask what choices you have in the process and the products.
More than meets the eye…
Everyone gets really excited (myself included) when talking about building a new house. I’m the first to admit that when we decided to build I immediately started Pinterest-ing (is that even a word?!) light fixtures for my dining room! However, it wasn’t long before I had to pump the breaks and get back to business. Building a home is more than just what meets the eye. Without a solid foundation your dreams may not be able to weather the storms of home building. I hope that this helps to guide you through the beginning steps of your build.
Your Millennial Mama,