The Process

We have clients from all walks of life. You might be:

• First time home owner or "entry level" buyer
• Up-sizing living space to accommodate growth - this could be new construction or addition to existing home
• Downsizing for retirement
• Building to accommodate lifestyle needs (i.e. love of horses, single-life, special needs, etc.)

Regardless of the scenario, we hope to build you the home of your dreams! It doesn't really matter where you begin, the critical next step is to at least marginally... review feasibility. This can be in fairly broad strokes, considering things such as:

• Investment value of ownership after completion (Will this project add value?)
• Available assets to pursue the project
• Current or pending family size
• Level of committment

There are a lot of winning reasons to build. The question is "Is this the time to build?" You must be comfortable moving forward or the remaining stages will be difficult.

This doesn't have to be the second stage. You may have been dreaming about this for years. But if you haven't, now is when you start writing out what you would like. Imagine. Make lists. Look through magazines and online. Pay attention to homes you visit. Firm up what you like. If you are interested in new construction, visit with a builder you trust. An experienced general contractor can offer advice that could enhance the project or reduce cost. 

There are many possible influences on the choice of build site. You may already own the land. It may be a gift. The property may be somewhat dictated by the style home you desire. The property needs to match the building design and visa-versa. Neighborhood restrictions, mismatch of home values, availability of amenities can all impact the location choice. If the property has not yet been purchased, this is a great stage to include your builder. Your builder can offer advice on where the home should be situated on a particular site to accommodate building codes or how the site could affect cost. Land is one of the largest variables when building new construction. That is why experience is invaluable in the evaluation of a building site for any structure. Find an experienced builder that you trust before you purchase land if possible. 

This is a crucial stage which for some might be nearly automatic, whereas others might need to closely consider the cost of each option and ensure it squares against the value it brings. We can provide you with a cost breakdown sheet which categorizes expenses to get a clear and accurate idea of what the project will cost. This breakdown lets you see where you can save, where you can be extravagant, and how it will affect the overall budget. We strongly recommend you engage a professional builder to assist in these estimates. Mistakes at this stage can have tremendous negative consequences. 

Acquiring Financing

Depending on the availability of funds, financing can go several ways. If a construction loan is required, it's good to know that construction loans are "story loans". That means the lender has to know the story behind the planned construction before they are willing to loan the money. It won't be standardized like mortgage loans underwritten to Freddie Mac or Fannie Mae guidelines. That said, there are common features to a construction loan.

      Construction loans typically require interest-only payments during construction and become due upon completion. Completion for homeowners means that the house has its certificate of occupancy. Construction loans are usually variable-rate loans priced at a spread to the prime rate or some other short-term interest rate. You, the contractor, and the lender establish a draw schedule based on the stages of construction, and interest charged on the amount of money disbursed to date. Another variable in construction loans is how much of the project cost the lender is willing to lend. If you already own the land, then that can be considered as equity on the loan.

     Many homeowners use construction-to-permanent financing programs where the construction loan is converted to a mortgage loan after the certificate of occupancy is issued. The advantage is that you only have to have one application and one closing. You could also purchase a rate-lock agreement valid through the expected completion of the construction. A construction loan, unlike a mortgage, isn't meant to be around for a long time. If you're taking out a $200,000 construction loan for six months and you pay an extra 0.5 percent on the loan, it costs you an additonal $250. You may be willing to pay a higher rate on the construction loan if you're doing a construction-to-permanent financing and can get better mortgage terms or a longer, better rate lock from that lender. 

Permits

In Jefferson County, permits can delay start of construction several weeks depending on permits required and time of year. 

During Construction

During the phases of construction, the cost breakdown sheet provided during the estimation stage will be used to segment payment based on work completed. As stages of construction are completed, it is common for the general contractor to issue a voucher request that will be signed by the general contractor and property owner. This voucher request can be exchanged for an actual voucher at the title company. It can be redeemed for a check from the lender. This allows for the contractor and any sub-contractor to be paid throughout the process for work that has been completed.

Upon Completion

When the final disbursements have been issued, a schedule will be issued that outlines all expenditures that have taken place.

Each project has unique characteristics that may dictate the timeline. Many phases may coincide or be performed out of order depending on schedule demands for equipment and craftsmen availability.

Before describing the timeline, it is important to point out that the number one reason for delay is usually weather. Obviously, working with a contractor who is able to move quickly allows the schedule to take advantage of "windows of opportunity" in weather. The second most common reason for schedule delay is change. Change can improve the schedule but more often causes delay. Change also has a major impact on cost. You want to choose a builder who has an efficient tracking system for change orders. You should expect regular and timely notice of change orders which reflect the impact to schedule and budget. Ask about this up front with your builder. Failure to stay on top of this often results in significant differences in schedule and budget. 

• Building site cleared as needed
• Land excavation for basement (if applicable)
• Trench completion and footings poured
• Basement stem-wall and floor pouring (if applicable)
• Foundation preparation and cement slab poured
• Home framing
• Installation of utilities (gas, electric, water/sewer, septic, well)
• Roofing installed 
• Mechanical systems installed (HVAC, plumbing and electrical)
• Siding installed
• Insulation installed
• Drywall installed
• Painting and staining
• Floor, stair railing, trim, cabinets, window and door trim installed
• Prep for vinyl and ceramic areas
• Countertops installed
• Vinyl and tile installed
• Built-in appliances installed
• Lighting installed
• Installation of HVAC, plumbing, and electrical systems completed
• Custom flooring and custom built-in entertainment centers and storage installed
• Freestanding appliances installed
• Finishing touches completed
• Final walk-through
• Transfer of ownership
  • Takes place at closing with title company for a home purchase
  • Takes place at final walk-through for a remodel