Building your own home

The process of building a custom home isn’t linear. Not everyone starts with
the purchase of a piece of land, for instance. Some people go to an architect
first to help them create a floor plan. Others may jump right in with both feet,
and be halfway through construction before they realize they need to borrow
money in order to finish.
Creating a custom home may be the biggest, most exciting project you have ever been involved in
(yes, even more exciting than when you figured out static electricity in third-grade science class). As excited as you are though, you don’t want to rush into it. In this part, we give you a general overview of what you’re getting into.
We also show you how to get organized and help you acquire land. Lastly, we help you decide on the type of home to build and walk you through the design andpermit process with architects and designers.

Most people at some time in their lives desire owning a custom home.
Some people are attracted to the thought of designing and creating something big from scratch. Others want to live in a new home that meets their specific needs instead of a house that looks like every other home on the block. Some people begin the custom home process by accident when they find a piece of land that inspires them.
More than 35 percent of new homes are custom homes. That means more than 300,000 custom homes are built every year. For each person building a custom home, five people are in the process of designing one. So you’re in excellent company with many people dreaming about moving into a home designed and built just for them. Because custom homes are so
popular, tons of resources are available to help you through the process.
But, like Rome, your new home won’t be built in a day. The custom home process is lengthy, emotional, and expensive, without much consistency to it.
Face it; custom homes require custom work and plenty of it! This work makes building a custom home challenging, and yet that extra work is what makes
your project unique to you. You may feel overwhelmed at times, but by trusting in the experience of the professionals you engage in your project and keeping this invaluable book by your side, you can have a manageable projectthat delivers the custom home you have been dreaming of.
Where Do You Start?
Preparing to Build Your Home – Believe it or not – the custom home process really has no standard starting place. There are some logical entry points such as finding land, but mostoften people start with a designed house they’ve had in mind for a long time.Where you start isn’t important; what is important is for you to make surethat you have taken all the necessary steps to give yourself the best chancefor success. The following list includes some questions you need to considerbefore committing time and money to this project. We discuss some of these issues extensively in other chapters (which we reference for you here).

  1. Where do I want to live?
  2. How long do I want to live in this house?
  3. How will I find land?
  4. How much money do I have to spend on this project?
  5. How much extra time do I have to put into this project?
  6. How do I find the right resources to design my house?
  7. How do I find the right resources to build my house?
  8. Is my marriage / relationship strong enough to survive this process? (See your clergy or shrink.)

Don’t make the assumption that any one person can give you all the information you need to prepare for this process. Contractors have one perspective on the process, and architects may have a completely different perspective.Do your homework and interview as many people as you can who are or who have been involved in the process. By talking to professionals and consumers and asking them to share their experiences, you can begin to get a clearerpicture of the process ahead.Kevin recommends to all his clients that they get organized before beginning the process. Sit down and assess how much time you can put aside each week to focus on the project. Consider making a specific day each week your day for working on custom home stuff. Also clear a space in your office to be “Custom Home Central.” This way you always know where to find what you need for your project.
Asking yourself about affordability
Of course you have heard horror stories about custom home projects that have gone seriously over budget. The projects go over budget for many reasons,but usually the main culprit is that the potential homeowners didn’t spend enough time determining what they could afford. Obviously, if you’rebuilding well below your means, then going over budget is easily rectified by using your own cash. But running out of money is the No. 1 cause of custom home disasters. Before you start the custom home process, you seriously need to consider the following: What can you physically pay? Take stock of your cash on hand, equity in real estate, and available cash from other resources. Make a firm decision how much money you’re willing to put toward the project.
You also need to get a rough idea of how much borrowing power you have to help establish a limit for your budget when added to your available cash.
What can you emotionally pay? Just because you have the money and the borrowing power doesn’t mean you really want to spend it all. Think carefully and discuss with your spouse what your limits are for making payments and how much liquidity (or cash) you need in the bank to help you sleep at night when all is said and done. Make sure you take into account tax deductions and interest earned on investments when analyzingyour monthly cash flow. After you have found that emotional limit,you can design your project to fit your comfort zone. What is your cushion and tolerance for risk? Like we say again and again throughout this book, building a custom home is a complex process. You need to consider many variables beyond your control, and then realize that the project can go over budget even if you do everything right. You can certainly get good solid estimates, but ultimatelyyou won’t know what this home will cost until it’s finished and you total up the receipts. Make sure you have addressed the “what if?” issues thoroughly. Talk about how you’ll cover things financially if the marketturns sour — devaluing your property — or the cost of materials rise.Decide what safety money (such as your 401(k) or retirement fund)you’re willing or unwilling to tap into.The more you talk about financial issues related to your custom home project,the more likely you are to resolve problems before they happen.
Optimism in a custom home project can get you into trouble every time.
The best approach is to examine every possible risk and make contingency plans for every potential problem.Them that has the gold makes the rules: If you finance, the bank will dictate process

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