I live in the Puget Sound area and my wife and I are thinking about purchasing land and building a house with a builder that does custom homes and helps manage the whole project.

Anybody ever done that before? Any pitfalls to avoid?

Thanks!

quote:

Originally posted by matai:
I live in the Puget Sound area and my wife and I are thinking about purchasing land and building a house with a builder that does custom homes and helps manage the whole project.

Anybody ever done that before? Any pitfalls to avoid?

Thanks!

It's all about the quality of your builder. Try to get personal references from people you know or at least have a connection to.

I haven't done it but my parents have and numerous friends have. It can be great. It can be awful.

One thing to know is that the more you, the owner, change your mind, the worse the project will be for everybody.

That'd be the way I'd go, just get the contract all lined out, deadlines, penalties, time to release funds based on progress perhaps updates on a regular schedule via drone images, or photos or on site.

When I was a kid my dad did the general contracting for our houses, built all of them himself hiring people he'd used before, they all did a good job.

Its going to involve you and the Mrs to oversee the contractor.

Daughter is doing that as we speak. Modular home, so much less complex, but she's the "General Contractor" and her biggest nightmare is keeping all the subs on task. The tone for the entire project was set when she applied for the building permit and found out she needed a zoning variance before the first tree was cut.

Also, she had to do quite a bit of shopping around to find a loan that allowed her to be her own GC.

House got set on the foundation Monday, now the company she bought the house from wants to put everything on hold for a month. I understand that the roads being posted means heavy equipment can't get in and out, but there's a dozer and an excavator on site so backfill/grading and septic work can go on, and there's wiring, plumbing, trim-out and HVAC work to do.

Fortunately, she's spent way too time around me and can slip into Navy Chief mode in the blink of an eye if the situation calls for it.

As a couple of the workmen have found out to their dismay...

quote:

Originally posted by YellowJacket:

quote:

Originally posted by matai:
I live in the Puget Sound area and my wife and I are thinking about purchasing land and building a house with a builder that does custom homes and helps manage the whole project.

Anybody ever done that before? Any pitfalls to avoid?

Thanks!

It's all about the quality of your builder. Try to get personal references from people you know or at least have a connection to.

I haven't done it but my parents have and numerous friends have. It can be great. It can be awful.

One thing to know is that the more you, the owner, change your mind, the worse the project will be for everybody.

Also get some information with respect to working with your local building, planning or whatever the agency that you will be seeking approvals from. Some can be nightmares and some can be reasonable. Will make a huge difference.

My wife and I are looking into a custom build as an option when we move to Texas. Apparently, they do it quite well there. I'm already looking into the Toll Brothers and Tilson Homes operations. We have seen their work and are impressed.

That's what we did. Purchased our land and then selected our own builder. I guess I'd watch out for situations where a builder sells the land with a requirement that they also build the house. You might not have as much control of the building process.

Just really do your homework. Have a plan for ALL the way through.

I just finished appraising a house where this has gone sour. Builder purchased the land, started building two homes (adjacent lots). He used the same plan for both, which he modified on the fly quite a bit. About half way through the build process (spring last year, because he build them over the winter, on a freshly poured slab...poured in winter, big no-no in Alaska), his realtor brought a buyer for one...so it was never exposed to the market. They were pocket listings. Buyers added stuff they wanted, some upgrades people typically want...nothing to create a functional issue.

All said and done though, house appraises for $100k less than they have a contract for. Partly because the contract is for ~$170K over what it cost the builder to build it... (We're talking a sub $500K house)

Someone's going to have to give...probably a bit from both sides to make the deal happen now.

Here's what I recommend to people in your shoes:

* Make sure there is a set of plans. Doesn't have to be an architect or engineer...but you're wise to use an engineer or have one review the plans.
*Get a detailed list of costs for the project from the contractor. Experienced builders have no problem providing a detailed breakdown of what everything is going to cost.
*Have an appraiser conduct a valuation based on the proposed project (they'll need a time line for completion, and as much info as possible). The appraiser will tell you if its an over improvement for the area, if the projected costs are inline with what the market value of the completed house will be, etc. A real estate agent/broker cannot legally do this for you, though many of them will tell you they can. They're wrong, and it can cost you a lot. It's going to cost the couple that are probably losing their dream home now, they'll have to fork over another $100k in cash.
*Have a talk with your intended finance company to know who you're going to use and what the financing situation is going to look like.

Make sure that everyone is happy then with the results of those actions. Take time to plan right, and make as few changes as possible. Changes cost everyone money.

I did that here in Florida and had a great experience. I enjoyed choosing every detail in my house. Can't say I saved any money because between me, the wife and the designer, we invariably chose the most expensive option every time - but we got exactly what we wanted.

What it comes down to is that your contractor is EVERYTHING. It has to be someone with a solid track record and someone you have absolute confidence in. Interview several to see who you like, ask to see other homes they've built, speak to their other clients.

Also, finish your plans before you start building. Decide what you want and make as many final decisions as you can. Changes later in the process will become very expensive in terms of change order fees and costs to redo things.

Also, use an attorney that is experienced in real estate and construction to review your contract. Use milestones and deadlines with financial incentives and penalties. Also make sure payments are tied to progress, milestones, etc...not just dates. Make sure there is some kind of warranty (could be by statute depending on your state but make sure it is in the contract).

My wife and I have done it twice in Texas.

We bought the land, hired and architect to design/revise/edit the ideas we had.

I had a 12 page document as part of the plans that described features in each room; trim levels, built ins, faucets, windows, etc so there would be no misunderstanding. I did not want to get in a "I didn't include that in my quote" scenario.

Then we went to a few builders to get their idea of timing, cost and how we would work together. We were reasonable about scheduling, they were reasonable about changes we made, you have to work together. I did have to tell one of the builders "this is what we want and it is our house"

We had great experiences building both houses, not perfect, but very good and would do it the same way again.

I have done it personally and, as a banker, I have financed many, many projects.

It's all about the builder and the relationship you build with him. Many times either you drive the builder crazy or he drives you crazy.

Some questions to ask......Will the builder be on site. A lot of builders drive around with a level in their gun rack and a clipboard. Will he hire subs based on lowest bid. How long have his subs been with him.

Ask about lien waivers if your state uses them. I've seen a number of people pay twice because the builder didn't pay the sub or lumberyard.

Talk to your bank. Get referrals and interview them.

You'll be amazed at how many decisions you'll be required to make.

Most projects go over budget by 10% or more based on extras and add-ons. Be prepared.

I have lived in 3 brand new houses......and would never do it again.

Mike

like a few others have mentioned, you need documents that clearly describe the scope of work you want done. the easiest way to do this is to hire an architect and, as an architect, I highly recommend that. if you have an architect, he can develop your contract with the builder and be responsible for making sure the builder fulfills his obligations. however, I do realize that this is additional cost.

so if you do not have an architect, get it in writing/on drawings your expectations for quality, trim level, finishes, schedule, and cost.

if you get drawings, perhaps have another builder or an architect review those drawings for you.

quote:

Originally posted by matai:
I live in the Puget Sound area and my wife and I are thinking about purchasing land and building a house with a builder that does custom homes and helps manage the whole project.

Anybody ever done that before? Any pitfalls to avoid?

Thanks!

Spend a few bucks on an attorney to draft and/or review the contracts. Unless you are a lawyer, you won't know what you don't know, and you could be unacceptably disadvantaged any number of ways in the contracts. And, this is doubly important if you are financing your construction.

I've been considering the same thing also in the Puget Sound so please post what you decide and who you talk to.

My wife and I have about 40 acres we plan to build on in the next year or two. I will echo what others have said, get the right builder for you. Go check out houses he has built in the past and check out his work.

Following.

I have bought the land, but haven't looked into building the house yet.

look for a small independent contractor stay away from the big name guys as I will guarantee you will be nothing more then a project number as they have done it hundreds of times before. I would highly suggest going on houzz.com and look up builders in your area there you can see their work and read their reviews. here is my houzz

https://www.houzz.com/pro/raybly/ray-bly-cabinetry

We have done it. Yes, as stated finding a reliable builder you can trust is first and foremost.

I could do half a page on how our builder cheated us and built the house how he wanted and not how we wanted and the extra costs that added up to half again what we agreed to.

But put everything you want and how it should be done on the contract..if it takes 100 pages.

We're seriously contemplating building the shell out of ICF blocks and sub-contracting out some of the components, but mostly just doing it ourselves.

I haven't met any local area contractors yet that I'd trust. The workmanship I see in houses around here is appalling. The crap that I see inspecting houses is routinely eye opening. Just when I think I've seen every way to do something wrong, I'm proven wrong again.

quote:

Originally posted by XLT:
look for a small independent contractor stay away from the big name guys as I will guarantee you will be nothing more then a project number as they have done it hundreds of times before. I would highly suggest going on houzz.com and look up builders in your area there you can see their work and read their reviews. here is my houzz

https://www.houzz.com/pro/raybly/ray-bly-cabinetry

You are on the wrong coast!