I would like to give special thanks to Harris Woodward of Finishwerks who is the source of much of my understanding of this process and the associated details. I hope this helps you as much as it helped me!
Let’s begin with the basics.
Let’s begin with the basics.
Choose where you want to live carefully. In the state of Maryland, each county has different rules that apply when building a new property. Rules and fees – just for building in their county. Maryland is second to California in its amount of shoreline due to the Chesapeake Bay and it’s multitude of tributaries. Because of that, there are a number of environmental protection considerations in building anywhere in the state, but especially in the counties closest to the Chesapeake itself.
So you chose the general area, now you need to choose the specific spot. Here’s where things get tricky. You need to know your budget before you start down this path. For us, this is tricky because we need to have a contract on our current house before we can get approval for a construction to perm loan and know what our budget could be. So, we’ll take a side trip down Budget Lane, and return to the rest of the path in a moment.
Construction to Perm Loans are not regular home / mortgage purchase loans. Because of this, there are some more stringent rules. These are the same rules that apply to places like Ryan Homes and other major builders. After the housing crisis, it became increasingly difficult for even large corporate building companies to get funded – not to mention individual family home builders. Many banks and credit unions just stopped offering those types of loans. The ones that remain, have stringent rules on the downpayment and credit requirements. They expect 20% either in cash or equity and there is no wiggle room on this, to my understanding.
Researching which bank in your area even gives C to P Loans will take some time. Why? Because in Area a: Suntrust does give C to P loans, but another county or state – they do not. It depends on the area’s level of foreclosures on new builds and the housing market in that area. The bank wants to know they will get their money, either from the original borrower or from the sale of the property. They also what to know what builder you’re planning to use so they have some idea if that builder is on the brink of going out of business or a solid dependable local builder.
So, you get your initial approval – great, it’s still not a sealed deal. The nice thing is you only have to go to closing once, then once the property is complete and inspected the loan changes from a construction loan to a permanent (read: normal) home mortgage. Before you get that far, however, let’s get back on the path…
You have a letter to bring to a builder and start work on your house, but you still have to pick a property!
You need a realtor who specializes in this type of real estate sales. Why? Because not all property is equal, there might be a property that technically percs (county approved for water, soil testing /sewer, and electricity) but isn’t the right grade for a house or has some environmental concerns that forces you to limit your building to a specific section of the property. A realtor who does this regularly not only has general knowledge enough to advise you on decent properties, but likely also has resources to have a civil engineer come and make an unofficial quick read on the property. You will need an official civil engineering report to even get the permit to build on the land, but before you purchase – have it looked at so you don’t waste time and money. Buying a property you can’t build on, or specifically can’t build the houseplan you’ve fallen in love with on, would be disastrous.
So, you and your realtor want to start looking at properties but first, what’s your budget?
Let’s say you’re approved for a total of $500,000 from the bank:
If you allocate (based on some simple averages)
- $125,000 for the property purchase
- $25,000 for the improvement of a raw lot of land (including all permits, fees, excavation, driveway, etc.)
- $350,000 for the actual building of your house including all interior architecture, appliances, foundation and upgrades
Now you see how some of these things can adjust based on the choices you make, right?
For instance, if you choose a property that’s a tear-down vice a raw lot. (Tear-down: existing home on lot with a foundation that either is easily adapted or fits your chosen homeplan structurally) You have the benefit of a lot that has much of the improving complete. You pay a much smaller amount for the removal of the existing home, debris, and the upgrading of the foundation as needed. You might pay more for the property for a large reduction in the improvement costs, or save by finding a cheap property. The downside, less ability to change the site layout and possibly limiting the location or changing it from your preferred spot.
Information on Teardown homes:
http://blog.armchairbuilder.com/3530/tear-down-the-house/
http://www.teardowns.com/documents/handbook09.pdf
http://www.stanleymartincustomhomes.com/pages/teardown.aspx
Information on Teardown homes:
http://blog.armchairbuilder.com/3530/tear-down-the-house/
If the location is prime for you, then you may have to adjust your homeplan or finishes to fit it in the remaining budget.
For now, we’ll stick with the 125k for the purposes of illustrating the process. After you comb through the listings, you find a few that are worth looking at and haggling over. Once the perfect spot is chosen, you need to have your builder involved. They will want to work closely with the civil engineer and if they are good, they will help you secure all permits and pay any fees. Why does the builder need to do all of this? Because none of the money will be sent to you. During the construction phase, the bank pays each vendor directly so they can accomplish that current stage of the process. Until the house is complete, you’ll be paying interest only on the loan as it is doled out – not the total. That’s not until the end.
So you have a site that’s been approved. Now you and the builder have a LOT of decisions to make. If you’ve ever bought a home in an established community, you have a lot of choices to make but they are only a fraction of a complete build’s choice list.
Oh! I forgot an important piece, stick-built home vice modular built home is a big choice. We prefer the modular build in a climate controlled setting. The builders we are interested in using are eco-centric in their building styles, they can work independent of the weather, and the homes have much less long-term risk for issues because of the controlled building process. On-site stick building has the benefit of being able to visit the site as the house goes up, but I like the idea that if a mistake is made – it can be corrected in a timely manner quickly without regard to weather. Also, the house can be inspected at each phase so that by the time it reaches the site – it’s confirmed ready to go! Plus, from all my research – the modular build home is going to be cheaper. Downside, some limitation in design, but that appears to be disappearing with each year.
To help you decide, here are some links:
http://www.washingtonpost.com/wp-dyn/content/graphic/2010/03/03/GR2010030303835.html
http://www.modularhomebook.com/book/chapter01.html
http://www.modularhomebook.com/book/chapter01.html
Back to the list of choices you need to be prepared to make…
I’m going to put it all here because a one stop resource is what I’m attempting to create, but keep in mind this is still fairly high level and may not take every situation into account:
Homesite Decisions:
- Permit, Survey, and Codes
- Plot plan
- Building permits
- Staking for excavation
- A preliminary stake for tree clearing and for house placement
- Second staking for excavation for foundations
- Construction approval by municipal inspections
- Erosion prevention
- Tree clearing
- Per on site meeting and markings
- Stumps ground out
- Logs hauled off
- Chips left on site or hauled off
- City Utilities
- Sewer connection
- Gravity sewer
- Forced main sewer with grinder pump station outside
- Water tap and connection
- Street bore
- Developer-provided sub-surface drain
- Sump line
- Electric service provider
- Gas service provider
- On-site Utilities
- Well
- Septic
- Propane
- Final Site Work / Concrete Flatwork
- Front Porch & Steps - surface / finish
- Home walk
- Public city walk (if applicable)
- Material requirements (check municipal code, where applicable)
- Length and width requirements
- Handicap accessibility
- Patio and Stoop (if applicable)
- Material specifications
- Finish / color
- Access to house / garage
- Driveway
- Concrete
- White
- Exposed aggregate / size of aggregate
- Stamped / styles and colors
- Asphalt
- Gravel
- Road matting needed
- Garage
- Number of spaces
- Style of overhead doors
- Landscape
- Rough grade lot
- Final grade sod, hydro seed, trees, shrubs and mulch
- Irrigation
- Front yard only
- Front and back yard
- Special requirements (gardens, greenhouse, etc.)
- Fencing
- Type
- Style
- Color
- Mailbox – municipal or development requirements
- Foundation
- Basement
- Full
- Partial basement with crawl space
- Walk out site conditions
- Crawl space
- Slab
- Footings
- Steel beams
- Sump pits / pumps
- Perimeter drain
- Window and door units
- Any baths and/or wet bar rough in needed in basement
- Floors in basement and/or garage
- Floors
- Sill plates
- Beams - wood / steel
- Joists
- Sub-flooring
- Pre-treatment/sanding prior to interior trim installation
- Walls
- First floor wall height
- Second floor wall height (non-ranch)
- Specialty ceiling requirements, as applicable
- Sheathing on exterior walls
- Fire blocking / draft stops as needed / required
- House wrap
- Ceiling Joists
- Beams
- Supports and posting
- Joist hangers
- Roof
- Material
- Shingles
- Step and roll flashing
- Ridge vent for proper attic ventilation
- Ice and water shield for superior leak/ice damming protection
- Counter flashing / brick flashing
- Ridges, hips and valleys
- Decking
- Underlayment on roof plywood (felt paper)
- Exterior Trim and Siding
- Soffit system
- Front porch ceiling trim
- Siding (many styles)
- House wrap all walls
- Material Specs
- Stucco - true masonry (not Dryvit®)
- Brick
- Stone (natural or cultured)
- Specialty Items (quantity / location)
- Brackets
- Shutters
- Window planter boxes
- Ornamental railings
- Screen Porch (if applicable)
- Ceiling / Soffit
- Removable Screen Panels with aluminum frames
- Screen door (quantity and location)
- Deck (if applicable)
- Floor system / structure
- Material treatment / wood species or composite material values
- Decking boards / railings / beams
- Garage (all garages insulated)
- Side entry
- Front entry
- Courtyard entry
- Detached
- Door material
- Door style
- Door size
- Openers / transmitters
- Insulation choice (see below)
- Insulation Choice (examples):
- Cellulose
- Fiberglass batt
- Blown fiberglass (with netting)
- Urethane
- Different R-values
- Soundproofing
- Exterior Elevation Styles
- Traditional American Custom
- European / French Country
- Craftsman
- Contemporary / Modern
- Mountain / Cabin Style
- Paint / Coating Color(s) / Stain
- Siding
- Shutters
- Exterior Trim
- Doors
- Roof
- Brick and Stone
- Stucco - true masonry (not Dryvit®)
- Gutters
- Exterior caulking
These exterior detail decisions also impact the interior design, as well as the ergonomics (ease of use), of your custom home:
- Doors / Entrances
- Front Door
- Transom / sidelites
- Hinges
- Sill
- Material
- Wood / Species
- Fiberglass
- Steel
- Basement walk out door
- Service doors
- Windows
- Brand / style
- Exterior cladding or extrusion
- Double hung / casement
- Pre-finished interior
- Grills (between glass) or outside glass / no grills
- Hardware color(s)
- HVAC / Ventilation
- Furnace(s) – gas or electric
- Heat pump or air conditioner
- Geothermal
- Heating / Cooling / Air Quality options
- Air filtration system
- Media air
- Electronic air filter
- UV lighting
- Zoning
- Damper system
- Number of zones
- Zone locations
- Zone controls
- Thermostats
- Humidification
- Ceiling and wall grills / registers
- Floor registers
- Cold air returns all bedrooms
- Dryer exhaust vents
- Bath fan vents
- Range hood exhaust
- Note: Heating and cooling system must be designed correctly to have proper air distribution, provide comfort and protect your home from the elements
- Plumbing
- Water supply lines
- Drainage and vent system
- Master / Full Baths
- Faucets
- Sinks
- Undermount
- Self-rimming
- Vessel
- Toilet / trip lever
- Tub / shower / spa
- Shower / tub valves
- Half Bath
- Toilet / trip lever
- Sink
- Faucet
- Kitchen
- Faucet
- Sink
- Food waste disposer
- Ice maker line and box
- Laundry Room
- Laundry / mop tub
- Faucet
- Washing machine hook up box
- Utility Area (if applicable)
- Laundry/mop sink
- Faucet
- Water heater(s)
- Electric
- Gas
- Tankless
- Instant hot water recirculation pump
- Gas plumbing to:
- Range / cook top / oven(s)
- Furnace
- Fireplace (if applicable)
- Gas stub out to deck (future grill – if applicable)
- Dryer
- Water Softener rough in / finish
- Hose bibs
- Sump pumps / battery back-up and water pressure systems
- Electrical
- Service breaker panel – total amperage
- Per electrical layout developed by builder, homeowner, and electric company
- Alarm System
- Key pad
- Motion detector rough in and finish
- Contacts
- Other options
- Light Fixtures
- Budget for purchase of all light fixtures and bulbs including yard light
- Electrician supplies: floodlights, recessed cans, eyeball lights, all light bulbs in recessed fixtures
- Fireplace(s)
- Gas or wood burning
- Hearth - flush or raised
- Fireplace face finish
- Drywall
- Special slick or design textured ceilings
- Specialty bullnose corners
- Interior Trim
- Baseboard
- Casing
- Crown
- Numerous other moldings
- Paint or stain
- Interior Doors / Solid Core
- Style
- Pre-primed for painting
- Raw wood for staining / wood species
- Built-ins
- Hardware
- Doors knobs / style / finish
- Front door handles set
- Interior door hinges
- Stairway
- Stair treads (open / closed)
- Posts / hand railings / spindles
- Paint
- Wall color(s)
- Wall finishes (flat, eggshell, satin, etc.)
- Interior trim - paint or stain
- Trim color same throughout house or multiple colors
- Cabinetry and Countertops
- Cabinets in kitchen
- Cabinets in master / secondary baths, laundry
- Kitchen countertops
- Material
- Granite or stone
- Laminate
- Tile
- Concrete
- Stainless Steel
- Wood
- Color
- Edging
- Master bath vanity
- Laundry folding table
- Hardwood flooring – style and locations
- Ceramic flooring – style and locations
- Ceramic wall tile – style and locations
- Bath finishes and hardware
- Mirrors
- Towel bars and rings
- Toilet paper holders
- Shower doors - colors and glass style
- Closet Finish
- Layouts and design
- Materials desired
- Light Fixtures
- Interior of house
- Exterior of house
- Coach lights
- Safety lights
- Yard lighting
- Electrician supplies
- Recessed cans
- Eyeball lights
- All light bulbs in recessed fixtures
- Insulation: Examples
- R-38 or R-50 - attic (R-30 is minimum code)
- R-19 walls (combined total)
- R-30 floor area of living above garage or R-33 or R-38
- R-19 or R-13 - perimeter of rim board of floor joists
- R-19 blown ceiling of garage with attic space
- Carpet
- Padding specifications
- Carpet style and color
- Locations
- Appliances - select finish
- Refrigerator
- Single / Double Oven
- Warming Drawer
- Microwave
- Cook top
- Hood and blower
- Dishwasher
- Trash compactor
- Many other conveniences to choose from
- Window Treatments
Still with me? It’s a lot to consider and I promise you, I spend a lot of time researching every little aspect. Some things I care more about, others are important to my husband, and in the end, we all need to be happy.
So, once all this is done. House is built and inspections are complete – you will have a new house. Then your actual mortgage kicks in, but you will be blissful in your new home knowing it was worth every penny. At least that’s the way it better work…
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