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TOP 5 Mistakes to Avoid when Building a Custom

TOP 5 Mistakes to Avoid when Building a Custom Home

Building a custom home should be an enjoyable, once in a lifetime experience that provides you and your family with exactly what you want and need. There are significant advantages to building your own versus buying a resale. For one you eliminate the need for costly retrofit issues. You also get exactly what you want: a home that incorporates your current and future needs and matches your lifestyle.

There is however some common mistakes you should avoid when building your custom home to ensure it is a cost effective and enjoyable process:

Top 5 Mistakes to Avoid

1.      Vague Contract

A good contract should outline clear goals, roles and accountability. Building a custom home is a detailed process.  You need to ensure that the contract you sign with your builder reflects your desired outcome and expectations. Your contract should include:

§  Builder roles and responsibilities

§  Timeline for decisions

§  Project goals and expectations

§  Budget and construction estimate

§  Floor plan with amenities and specifications

§  Guidelines for plan changes during construction

2.      It is my Builder’s responsibility to get it done on time and on budget

A good contractor should have a robust project management system that clearly outlines all of the phases in the project and key milestones. You should also have a clear understanding of your deadlines for selections.

Your selections can include appliances, paint color, hardwood type and stain, cabinetry type, electrical and plumbing fixtures, carpets, bathroom tile, granite countertop, home automation, etc…

The more sophisticated builders will have a web based selection management system that will allow you to manage your selection deadlines, allowances and vendor choices.  In today’s day in age and technological advances, you should also be able to monitor in real time the status of your budget and project plan without having to pick up the phone or visit the construction site.

3.      Leaving the financing arrangements for last

It is very common for custom home buyers to choose their site, architect and builder without having first consulted a mortgage broker and financial advisor. This should be your first step…. In today’s credit squeeze, it has become increasingly harder to get Jumbo Loans (loans over $417K) as the secondary market has stopped purchasing securitized packages of Jumbo Loans. The construction and permanent loan parameters have also shifted. Make sure you consult with your mortgage broker first and understand what are the lending possibilities and what is your realistic budget.

4.      No News is Good News…

A great builder should be an effective communicator. This is not always the case even for the very best in the trade. Make sure you have preset conference calls and meetings with your builder where you can discuss project progress, setbacks, key milestones and changes in your expectations.

5.      Assuming the builder is going to do exactly the way you wanted

Make sure your builder knows exactly what you want, sometimes builders do things based on a routine and assumes that the home owner understands and is OK, when the reality is, home owners are building a custom home and therefore they want the home done their way and not based on a builder routine. To avoid this error, make sure you do the following:

§  Assess your unique needs

§  Help prioritize your wants

§  Understand your expectations, concerns and fears

§  Integrate you into the construction process

§  Resolve issues promptly

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