So your thinking about building a new home? What do you do first? When you first starting thinking about building a home it might be tempting to just start designing your dream house. There are however some key steps that you need to take before you start designing.
1) Know your budget.
Your budget will determine all of your decisions. It is essential to understand what you can afford and to be honest when it comes to the numbers. In addition to figuring out the mortgage payments you can afford and qualify for you also need to include, home owners insurance, property tax, and HOA fees if any. Also consider any down payment funds that you have and any other money that you’ll get during the time the house is being built.
2) Select a location.
Selecting the general area where want to live is just the start to finding the perfect location for your new home. Make a list of all the facilities that you need to have access to, such as schools, shopping and public transport, and check the list against each location you’re interested in. If you want to build in a older neighborhood make sure you check the local municipal guidelines about knocking down old houses and building new ones. If you’re looking at a new subdivision make sure you know the architectural guidelines you will have to abide by. Also consider the shape of the of land you want. Do you want a corner lot, a pie-shaped lot with a large backyard or one with a large front garden space? If you have a young children or are planning to have children then look for a location that attracts people with children and have green spaces or playgrounds. One important consideration that also links to your budget decision is how much the taxes in each location are.
3) Buy land.
Buying the land with a land loan or cash allows you to take the land off the market so others cannot buy it before you do. It also allows you to have plenty of time to pick out house plans, submit the plans to the county for approval and obtain a building permit all while obtaining the best construction loan. Construction loans can also include the land into the loan but only if you already own the land and have a balance to add into the construction loan.
4) Create a plan for your house or hire an architect.
There have some great house plan resources on the internet. Just go to Google and type in “house plans” for your local area and you will have more sources than you can handle. If you choose go with a house plan from the internet you will probably still need to make some small modifications for your local building codes and type of land plot. To do this it is best that you hire a local architect.
5) Hire a general contractor.
You can hire a contractor who will organize everything for you and deliver a completed house, or if you choose to you can run everything yourself. However this involves all stages of the house building process from the initial budget and schedule through design to the actual building of the house. You will also have to schedule and interact with all the trades, buy the materials at the right time and perform quality control of adherence to building standards.
6) Know what goes into the estimated cost.
This is the breakdown of each particular cost of construction of the home. The foundation, lumber, framing, plumbing, heating, electrical, painting, etc. The builder usually completes this form to show you exactly what it will cost to build your new home. The most important thing to remember here is that you do not want to underbid any line item and you do not want to overbid any line item. You want accurate numbers from real bids. A Good builder will send out the house plans to their contractors for specific bidding on each main item or can estimate the home themselves. When all the numbers come in the builder will fill out the cost breakdown and come up with a total cost to build your new home.
7) Get construction insurance.
There are three types of insurance needed to build. All banks require the first two types, course of construction and general liability. Workman’s compensation is only required if your contractor has employees.
– Course of Construction Insurance. This policy is an all risk policy to include, fire, extended coverage, builder’s risk, replacement cost, vandalism and malicious mischief insurance coverage.
– General Liability Insurance. You or your contractor can provide this policy. This policy is a comprehensive general policy or a broad form liability endorsement. The minimum amount of $300,000 for each occurrence is required. If the builder provides the insurance a general policy of $1,000,000 or a broad form liability endorsement is required.
– Workman’s Compensation Insurance. If your builder owns his own company and has employees that are helping to build your home, workman’s compensation is required. If the builder simply subcontracts out the work and does not have employees per se, they will need to write a letter acknowledging that they do not have employees and are not required to have workman’s compensation.
Feel free to contact us with any questions you may have about building a new home.
C&H Construction is a licensed general contractor and Custom Home builder located in Blairsville, Union County Georgia serving Towns County Georgia, Fannin County Georgia, Gilmer County Georgia and the North Georgia Mountains.