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The Do's & Don't Of Building Your Dream Home

First in a series: Deciding on a Design, Getting It Rendered and Fixing a Budget.

The Lack of Supply, and Increased Demand for Houses, Can Encourage People to Make Certain Decisions.

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You've scrimped and saved and you've sacrificed a lot. You've gone out and looked for property to invest in, but the law of supply and demand has not been on your side. Then you decided to look into having this home that you've yearned for built especially for you, and again, you run up against the laws of supply and demand. There are either not enough qualified building contractors in your area and they are all too busy, or they're way out of your budget range and unobtainable Then you get this fantastic idea that you can build it yourself; get exactly what you want and save time and money in the process.

Does this scenario sound all too familiar? Well it's a trend these days. Many people across America are shut-out of the property markets, because there are just not enough good homes available and the industry can't build them fast enough. People with disposable incomes have been investing in real estate like never before. This lust for property investment has also helped to drive the cost of homes beyond the median levels, and first time or middle income home buyers have been kept out of the property market by this factor, as much as any other. Many people think they can better their odds if they build it themselves.

Contractors are working day and night to supply America with homes. Most are short handed and cannot find the time to build all the homes that they could sell. Many people, thinking that they are smart and capable, have turned towards the option of being there own General Contractor and are attempting to do the job themselves. They mistakenly think that they can do this; after all, they're smart, they've undertaken other difficult projects in the past, and they've come out of it ok, but building a home is not as easy as some people may think and the hazards along the way can trip them up at every turn.

We are not trying to dissuade anyone from building or renovating a home, it can be an extremely rewarding experience on many levels. What we want is for folks to understand the journey they are about to embark on. We want to help educate them to the process, and then see them move into a new or refurbished home with the least amount of impact on their lives and budget.

Note: Before you start to read this next piece of advice we encourage you to use our Mortgage Qualification Calculator and/or our Renter Mortgage Affordability Calculator to estimate what your construction or renovation budget could be. There is no need to sets your sites to high or to low, and these calculators are a useful tool to do just that. Having a very good idea of your affordability range is more than just helpful when dealing with lenders, architects and contractors; it's a basic requirement for your success.

Step: 1 Deciding on a Design, Getting It Rendered and Fixing a Budget

There are many aspects to building that you will be able to teach yourself and become fairly proficient at, but a good solid design, that is structurally sound, regulation compliant and functional all at the same time, requires an architect. After you have shopped around and found the right one for your needs, make a list of all you personal requirements, ask them what other information they may require and set a time for you to do your planning. At this meeting be prepared to set a ball park budget, explain in detail the kinds and number of rooms you will need and the types of materials and amenities you are looking for. Also, provide them with a plot plan of your property and an overview of you chosen neighborhood. Go to the site to survey the plot with them and discuss all the possibilities for placement, access and view.

The design of your home is important and it must conform to its surroundings for it to have any value in the future. You may have found a plot that suits your budget, but if you then go and construct a home that is non-conforming you may never realize the full potential of your investment.

Example: You do not want to construct a two-story, three-bedroom Colonial on a street that consists of 1950's single-story bungalows. It just doesn't make good investment sense. Nor do you want to build a dwelling in a nonresidential neighborhood, even if local zoning would allow for it. A home, for most people, is the single greatest investment of their lives. Good sense will help to protect that investment.

Once your architect has come up with a design you will need to make certain that it is exactly what you want. Many architects have an "artistic" side and they may suggest features that are either out of your price range, purely esthetic or just not your style. Be certain that they design your house, not theirs, one with function as well as form. Do not rely solely on the architect's judgment of what your costs will be, you must be certain that the house they have designed is within your budget to build. Here are two other ways to get comparative construction cost estimates, and between the three, you should be able to come very close to knowing what it is going to cost you to get your home built and move your family in.

Go to the neighborhood where you will be building your home and look for houses that appear to be of the same style and size as the one you wish to build. After all, you are supposed to be trying to conform to this neighborhood and there should be examples for you to look at. Start knocking on doors and talk to your future neighbors. Find out if they built there homes themselves or made sizable renovations, and if so, ask them to sit down with you over dinner to discuss it. This may sound more difficult than it really is but most people are proud of their homes, especially if they built or renovated them themselves, and they would be glad to tell you their story. Ask them who did the work, how much did it cost, and how long did it take. The time factor is just as important as the cost, you may have all the time in the world but lenders do not.

Note: Most construction loans have a very specific time frame for the actual building phase, with a predetermined timeline that notes each and every step of the process. The three steps to each phase are: when it is to be completed, inspected and invoiced for. The first phase of a construction mortgage consists of interest only payments and therefore the lender is always pushing to get into phase two as quickly as possible. Phase one must be completed before the permanent phase of your mortgage kicks in. If you over shoot your time schedule for completion there are most always heavy penalties to be paid. Please see our learning center for more thorough information.

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