BIENES RAICES: BEFORE YOU BUY OR BUILD Before you Start!
Considering all of the potential problems-whether real or imagined–in building a new home, why would anyone consider hiring a builder, buying a lot and starting a home from scratch, rather than buying an existing ready-to-move-in home? The reasons vary, but many custom home buyers cite the personal satisfaction of the home-building process as a compelling motivation. Others want a home with the latest in modern architectural design and home-building technology or a custom floor plan and home design that fits their individual lifestyle and needs.
Many people believe a brand-new home will require less maintenance or appreciate faster in value. And, naturally, some people simply enjoy the pleasure of living in a home that’s completely new from the foundation to the roof.
A successful home-building experience depends largely on following a workable plan from the start through the completion of the project. Here’s an example of a 10-step home-building plan that might work well for you:
Establish your budget. Before you start making plans for your new custom-built home, ask a lender how much money you can qualify to borrow and what the down payment requirements will be to finance the construction and purchase of your home. Select the general area where your new home will be built. Spend some time investigating and visiting areas where you might want to live.
Choose a builder. Select a construction professional to help you through the next few steps of the process. A preliminary agreement can afford you the option of selecting the same builder or a different builder to construct your home later on. Pick a site for your home. Choose the specific site on which your new home will be built.
Hire a home designer. Select a designer whose work suits your taste and who will design a home that can be built within your budget on the site you’ve selected. Choose a builder for the construction of your home. The builder you select may be the same one who has assisted you thus far with the process of building your new home. You might decide to obtain one or more formal bids for building your home. The bidding builders will assemble subcontractors’ bids, suppliers’ proposals and other estimates into a formal cost analysis based on the complete written specifications for your home.
Finance your home. At this point in the process, you’ll be ready to arrange the short-term construction financing and the long-term residential mortgage for your new home.
Obtain construction-related approvals and permits. Before construction can begin, you’ll need official signoffs from the local government building department, utility services and the architectural control board or committee, if any, that has authority over your site.
Build your home. If your plan has been well-executed, the construction of your home could be the easiest part of the process.
Closing and completion of final work. After your home is built, the lender will fund your residential mortgage and the builder will make any repairs necessary under the warranty.