Building Your Own Home

You may have heard building costs are up and they are but that doesn’t mean it is not a good time to build. With inventory still low this may be an option you want to consider.  Daniel and Julie Desrochers from Desrochers Realty Group and EXP Realty has advice on how to do that.

Where do you start if building is something you want to do?

Start with the Lot  

  • You need to start with the lot
  • This will dictate a lot of the building process
  • Find a lot you like
  • Things to think about are
    • Size
    • Topography
    • Neighborhood
    • Covenants
  • Once you find a lot there are usually 2 scenarios in regards to who you can use to build
    • The lot is owned by a builder or developer that is requiring you use a specific builder or the option to choose from a few selected builders
    • You can purchase the lot and it is open to any builder so you can build with whomever you would like.
    • A lot of properties are owned by National builders – if you want that lot or to be in that neighborhood you would have to build with that builder.

Types of Builders

Not all builders are the same – 3 main types of builders:

Tract Builder:

  • Can choose from a few different plans. May have 4 or 5 to choose from as the only options in a neighborhood.
  • Cannot make any changes to the plan as far as moving walls or putting in upgrades when there is no option for an upgrade
  • Have specific options you can pick from for finishes – can’t just do what you want
  • Usually the most economical route.
  • Usually the quickest

Semi-Custom Builder:

  • More options from home plans to choose from, can move things like walls around and upgrade most areas.
  • Don’t start completely from scratch with a floor plan but can customize an existing floor plan to your needs.
  • More options you can pick from for finishes.

Custom Builder:

  • Usually start from scratch on a floor plan based on your needs.
  • Sky’s the limit on what you can do but can also be hard to stay within your budget.
  • Usually can go with any selections you want.
  • Process is going to take longer.
  • Will most likely be the most expensive option.

Coming up with the Plan  

You can work with a builder from the start

  • Use their architect
  • If you are comfortable with a builder and lover their design may be the way to go
  • May pay a little more this way as there is no competition.
  • Process can be shorter

Our favorite way

  • Hire an architect or CAD person to create the plan – you then own the plans
  • Meet with multiple builders to get comparisons on building style and pricing
  • It is more time consuming and can be a longer process
  • We find you get a better, customized home in the long run
  • If you have a hard time making decisions though this may not be the route for you.
  • We help many buyers with this route each year

Financing the build  

How do you finance a build?

  • Different than a normal purchase
  • If you are buying from a large builder or tract builder you usually have the option to put a larger chunk of earnest money down and then you close on the property once it is completed.
  • In most cases if you are working with a small to midsize builder or If you are going the custom route you will most likely have to take out a construction loan.
    • Interest only loan to purchase the lot and pay the draw payments that the builder requests along the build process.
    • Once the property is completed you refinance the construction loan into a long term fixed loan.
    • Usually requires at least 20% down.
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