What You Need to Know Before Building a House

August 20, 2018 Home Ideas

Securing that ideal piece of land is only the first – and, arguably the easiest, step in building a house. The real work hasn’t even started yet, and it’s going to be incredibly time consuming, but for most, well-worth it in the end. You’ll need to have lots of patience to make that dream home a reality, but by keeping these things in mind before you start, it will go a long way in ensuring a smoother experience.

 

Be Financially Prepared

Not only should you be mentally prepared for the time and effort involved, but you need to be financially prepared as well. The national average cost to build a single-family home is $286,275, according to homeadvisor.com, and of course, it can be hundreds of thousands more depending on the home and the location. For example, the IndyStar reports that Carmel tends to be much higher-priced than other Hamilton County suburbs you’ll notice when searching through homes for sale in Indianapolis, Indiana.

 

That’s no small chunk of change, which means it’s a must to run the numbers and determine whether you can afford to build the home you want. Those numbers include construction costs, tax benefits, down payment and more. Always add about 25 percent to the total costs of the project to cover any unforeseen expenses like seasonal increases in the prices of materials. Most house plans provide a tool for a small fee that can give you the cost to build based on where you’re building.

 

Funding Differences

Building a new home is different when it comes to lending too. Assuming you aren’t paying in cash, you’ll need a home construction line of credit for paying suppliers and subcontractors. When the house is complete, you’ll need a residential mortgage to pay off the construction line. Keep in mind that local lenders are more likely to invest in their own communities, though some may not want to fund projects in particular areas, like places that are prone to flooding or fire.

 

Do Some Serious Vetting of the Contractor

It’s often more advantageous to choose a licensed, independent builder if you can, though some developers will require you to use a specific contractor if you buy one of their building sites. When choosing your own, be sure to obtain lots of referrals from homeowners who have homes that you’re impressed with. By selecting a local company, it can help keep costs down as the builder will have experience working with regional regulations and building codes. Be sure to contact the licensing board for your state to find out if any complaints have been filed against the contractor.

 

Many experts recommend using builders who are members of the National Association of Home Builders, NAHB, as you’ll know you’re getting a professional with the proper credentials.

 

Keep Resale In Mind

You may love the house you’re building, but it’s probably not going to be a house that you’ll live in for the rest of your life, which is why you’ll want to think about your new home’s potential resale value. You don’t want so many upgrades that the home is overpriced for the neighborhood, or features that most people will probably find a little too unique. Consider whether the features you want to install will appeal to others.

 

Know That You Will Make Mistakes

It’s virtually impossible to build your dream home, or any home, without any bumps along the way. Know that you will make mistakes, but in the end, things might just turn out even better than you planned.