Building a Custom Home

Once you have decided to build a custom home rather than purchasing an existing home, there are four important steps to take in order to make it to the end of your project.

1. Decide on a Contractor

Unless you have extensive experience in the construction business, and a lot of spare time, picking a contractor to run your project is a must. Contractors will coordinate all construction activity for you, typically performed by subcontractors. While using a contractor will cost you 15-20% of the construction costs, their expertise is needed to make sure the project comes together without difficulty. Knowing what the appropriate order of construction is, understanding codes and permits, even negotiating the best prices is something that a good contractor will do for you. Picking a good contractor is even more important than picking your plan design.

When picking your contractor, a few things to consider: first, get several references from previous homes built by the contractor, preferably homes that have been completed at least a year. Inevitably there will be small “punch list” items that you will not notice until you have lived in a home for a few weeks, that your contractor is responsible to fix. Good ones take care of items quickly, but I have spoken to people who have waited for two years to have things fixed, and even one who had to force litigation for results. All contractors will have a punch list; how they handle it shows their quality. Most will be available for issues six months to a year after completion. Secondly, consider the management fee charged. Some contractors are worth a higher fee for their results or their bargaining power in negotiations with subcontractors, but understand what you are getting with the higher fee. The larger your project, the more negotiating power you will have with the percentage charged. You should have your choices for your contractor narrowed down to one to three before you select your plan.

2. Decide on a House Plan

Next, pick out your house plan. You need to consider what aspects of a house are most important to you and make sure those are in your in your plan, with other details being secondary. Unless you are a millionaire, you likely are going to have to cut some things out of your house plan desires. Is having a fourth bedroom more important to you than having a sitting room? Do you want a single story home or two stories, and if two, what rooms are important to you to be on the first floor? There are many different things to consider in the design stage, because while some simple changes can be made in the field, room locations and plumbing cannot.

Locating a custom plan can be done several ways. Your contractor likely will have access to a number of plans if he has been in business for a while. Additionally, there are books available at home improvement stores. There are a growing number of plans available to order online. Finally, if you cannot find all of the aspects important to you in a single plan, there are programs that can help you design blueprints (generally available through an architect). Talk to your contractor before ordering your plans, as he can give you an idea of the complexity (and thus cost) of the project.

3. Decide on a Budget

Once you get your plans, it is time to get your contractor to price out construction. If you have not narrowed down your contractor to one at this stage, you will get bids from the ones you have narrowed down to in step one. When comparing bids, understand what quality of items are being priced out, which can drastically change the bids. You need to be able to give the contractor an idea of which areas are important to spend more on and which you are not as particular. There can be a big price difference between different fixtures in kitchens and bathrooms in particular, so know the range being quoted. You probably will not have to have 100% of the details decided to get a bid, but you will have a quality range to work with from that.

Most contractors will give you a dollar figure for completion of the project with no deviations from the design and quality level, and any changes will be considered change orders. Generally, change orders will have an additional fee added along with the price of the actual change itself, because of the additional work needed to complete. This makes reviewing your project up front extremely important to keep on budget, and not incurring additional costs.

4. Decide on the Details

This is either the exciting or stressful part of the process, depending on your personality. With a custom home, you get to pick out every detail of the project, within certain parameters, from the color of the carpets to the finish on the bathroom hardware. It can be daunting task if you do not remain organized. Ask you contractor for deadlines for each decision that needs to be made. For things you don’t have strong opinions about, most contractors can take general parameters from you and make decisions based off what most people do. Don’t do that with too much or it no longer is your custom home!

Your custom home will be a great project and something you can enjoy for years to come. With a little planning and the right contractor, the process will be manageable and extremely enjoyable.