If you have ever though you might want to build a house then you are not alone. It is a very rewarding and at some times frustrating experience but in the end it is very satisfying to build a home with everything you have ever wanted.
It's a long process and depending on your skill level or your "no fear" attitude you can do it all from the ground up or hire contractors to help. It is not for everyone.
It takes a lot of planning. It's not just something you decide on a weekend and start building the next day. After we decided that we were going to build our own house the research started.
Construction Loans
You should start looking for your financing right away. Not all banks do construction loans. You will need to find out how much you qualify for so you can plan your budget for the land and house. Research the nature of them online so you know what the limitations are. If you are a first time home builder you will have to prove to the bank that you can build your house.
Since we had not built a home before we needed to get a letter from a builder that basically said they would step in to finish the house for the budget we set if we failed to do so. Not all builders do this. I think it's a big scam but it was the only way we could get our construction loan. We paid $3000 for that letter. We never ever used them. We did call them to bid out our foundation but they never called back. An easy $3000 for them and our banker then was satisfied with his risk to loan us the money.
Construction loans are basically interest only loans. Each month you present receipts to your banker, he checks them out, approves them and gives you the money. It's a catch 22 really, the bank doesn't want to give you the money until you actually have used the item in question, the person selling you the item wants the money up front.
We started out with 30k of our own money so we were able to pay for things up front until the bank money came through. The other way to do the cash flow time shift is to turn in receipts for your labor. All the work you do on your house has value. You put an hourly value on it and use that to purchase materials until they are used so you can turn in the receipt to the bank.
For instance, if you find a good deal on kitchen cabinets the bank will not give you the money for them until they are actually installed in your home. You can use the money you put in for labor for these kinds of deals.
The banker will usually come out each month to make sure you are actually building the house.
Once you obtain your occupancy permit and your house is done you convert your construction loan to a conventional loan. Shop this around too. You can use the original bank or any other bank that gives you the deal that you want.
Banks have different ideas of what done is. The reason we went with a different bank when it came time to convert the loan is that our bank wanted every single detail done. They had initially said once we got occupancy that was all they cared about. That meant that all the safety issues had been met. Then they changed their mind at the 11th hour.
Even the new back wanted more done so we compromised with a higher interest rate. We refinanced a year later when the house was 95% done and got a much better rate.
We are still working on trim, doors and other assorted projects but the house is basically done and safe to live in.
Property and a Building Plan
We spent one year looking for the perfect property, going to home shows, looking at packaged home plans, home building kits and log homes. I started a notebook with cut out magazine pictures on features I wanted in the kitchen, yard and details of the house.
We couldn't find exactly what we wanted. Each home plan had parts that worked for us and parts that didn't. That is when we decided to draw up our own plans. Lucky for us Dave's step Dad is a drafter designer and helped us out big time with that! If you are not lucky enough to have one in the family you will need to find one.
I would try to get a referral from someone you trust. Again, personal relationships come into play. Find someone you like and get along with. You will spend a lot of time with this person and they will be helping you design your dream home so pick them carefully.
Once you have your property and plans it is time to get bids on your framing package and get the permitting process going. Take one copy of your plans to one lumber company. Have them do what's called a take-off. Then take that take-off and copies of your plans to several lumber companies. The reason you want to do it this way is it is the only way to get comparable bids. If each company does their own take-off there will be differences and you will have a hard time comparing them. This also saves the other companies’ time and they will appreciate it. You can ask them if there is anything they would do different (maybe a paralam beam instead of glulam).
Make sure the company includes your trusses in the bid. Not all do.
We found that the package price didn't differ that much but the companies did. We chose to work with BMC West because of the people. It is important to work with a company that you like and that you feel will actually return your calls.
BMC was the only company that would agree to meet with Dave for lunch to discuss the plans. One company lost our plans, one never would return our calls. Our BMC rep actually came out to the site several times during the framing to make sure everything was going well. The entire experience with BMC was a good one.
Construction
There are many ways to go here. You can do it all yourself, hire people to do it for you and act as your own general contractor or hire a general contractor to hire folks to do the work.
Perhaps you will have the shell built and do all the finish work yourself? These are all things that should be talked about and planned before you start. Some will be decided for you depending on the funding you have.
Try to have as much of the house complete before you move in. Once you move in you will not believe how hard it is to finish up the details. It gets pretty easy to look past the fact that you have no window sills or the floor in the guest room is still OSB.
We struggle with it every weekend now. Should we tile the stairs or go out and float the river? You can imagine what the answer is. After spending two years building the house we were grateful just to get out of the RV and into a real bed!!
Attitude and Final Thoughts
You need a good one. This process can get very stressful if you let it. You need a strong marriage, a sense of humor and you should be on the same page or it's going to be a long unhappy process.
You have got to be flexible and you have to communicate well with all involved.
If you decide to go this route I assure you that it is the most satisfying experience to see your dream become a reality. To have every door and window just where you want them, to design your dream kitchen or bathroom, to have every color just exactly the way you want it is a great feeling.
(June 2007) (
