Peter Economy - Building Your Custom Home For Dummies

Many craftspeople and artisans participate in the building of your custom home. If you’ve carefully hired everyone, you need to put your trust in these skilled workers. Many processes are multistage. Unfortunately, some people will make mistakes or leave some items partially finished. Don’t panic — this process is normal. Your contractor and the subs can fix or replace most everything during the building process, and your contractor and subs will double-check their work as they go.

We give you spot-checks in the chapters in Part 4of this book. Use them as a guide to check on everything along the way. Write down any concerns and problems you see. Instead of pointing out everything every time you have a concern, talk with your contractor and set up a meeting with the appropriate sub to share your findings. Doing so allows the subs to do their job with a minimum amount of pressure. You may find they had already scheduled the repair.

You’re sure to have your share of frustrations and problems before your custom home is finished. Managing your patience and your temper is difficult when so many things are beyond your control and so much is at stake. To help you enjoy the lighter side of the process when everything is looking a little dim, here’s our top-ten list of ways to make your process extra fun:

Enjoy a mud football game before the foundation goes in.

Throw a block party at every completed stage.

Have an office gambling pool on completion dates.

Make matching T-shirts for all the workers on the project.KEEPING AN EYE ON EVERYTHING: CAMERAS ON THE PROPERTYIf you absolutely need to know what’s happening with the property 24 hours a day, you may consider installing webcams on sight. Your builder may even offer this service. Websites such as X10 ( www.x10.com/cameras.html ) sell cameras and software that allow you to watch the action at your build site from any Internet-connected device. You can expect to pay up to a couple hundred dollars for all the equipment and software you need to watch your project 24 hours a day. You may find it isn’t much different than watching paint dry, but what’s a little boredom where peace of mind is concerned?But beware of installing a camera without talking to your builder first. Make sure they’re comfortable with the idea that they’re being watched all day or being micromanaged. Nobody likes to feel spied upon. And remember, your contractor can always send you a quick picture via text or email.

Create art pieces with scrap lumber and supplies.

Compile a construction hunk calendar.

Give out a worker-of-the-month trophy.

Put your family’s handprints in the cement.

During framing, fly paper airplanes off the second story.

Make a photo album or scrapbook documenting the entire process.

Chapter 3

IN THIS CHAPTER

Figuring out what a lot is

Making sure the property will work for you

Searching for (and finding) a lot

Estimating what a property is worth

Understanding teardown properties

Purchasing the land

You can’t have a house unless you have somewhere to put it. Unlike the pioneers of old, however, people today can’t just walk up and squat on whatever piece of land that catches their eye. If you’re interested in some land, you have to research, explore, negotiate for, and ultimately purchase a parcel that you can call home.

In this chapter, we walk you through the entire process of searching for and finding the perfect site. We provide you with the very best evaluation tips and even discuss buying a house in poor condition that you can tear down and rebuild. Finally, we consider financing options. You have to pay for that dream property, after all!

Differentiating between some land and a lot may seem like an easy distinction, but not so fast! The two are, in fact, quite different. All lots can be considered land, but not all pieces of land can be called lots. Are you scratching your head? If so, here’s the distinction:

A lot or finished lot is a piece of property that is ready for building a house. It may or may not have all the utilities (gas, electric, water, sewer, telephone, and so on) at the site, but they usually aren’t far away.

Land is a catchall term that people in the construction industry use for any piece of property without a finished, habitable structure. Land can be commercial, residential, or agricultural. Raw land or undeveloped land is terminology that most people in the construction industry use when referring to land that isn’t ready for building.

If you’re anxious to get your new home built or if your finances are limited, plan to buy a finished lot, not raw land. You can find a good loan more easily with a lot, you’ll likely pay a lower down payment, and you’ll have to spend less to prepare the property for building — all resulting in major savings in both time and money.

Raw land can be more difficult or more expensive to finance because it usually requires additional work (often, significant additional work), such as putting in roads and utilities, before building can begin. Fewer buyers are willing to put the time and effort into this type of property, which makes it less marketable than finished lots. As a result, fewer lenders will be willing to lend you the money you need — you may have to find private financing or encourage the seller to loan you the money (referred to as having the seller carryback paper ). If you do find a lender, you’ll probably need to make a larger down payment. In most communities, non-institutional individuals (also known as private investors) invest money in real estate — banks usually know these people. (See “ Using private or hard money” later in this chapter for more information.)

If you buy raw land, plan to allow yourself more time to complete the entire project, because preparing raw land into a finished lot — getting approvals and permits, building roads, extending utilities to the lot, drilling wells, if necessary, and more — can take months or even years. Make sure you consider the extra time when discussing the term of your lot loan with the seller or lender.

Of course, you don’t want to buy just any lot. You want a lot that meets your desires and will retain its value, if not appreciate.