The best way to get exactly what you want is to build a custom home. Although building a custom home is the most expensive way to have a new home built, the benefit is being able to design and build your dream home. While it’s a very detailed and arduous process, most people love to play an integral role in building their new nest where they will make a lifetime of memories!
Buying and Analyzing Land
Building a custom home means starting from scratch, including buying land, selecting a house plan, and finding a custom home builder. How to Buy Land is an article that can guide you in the process of buying land and doing proper due diligence to make sure the land achieves your goals.
Part of buying land is to make sure you have a building plan that works on the land, whether by choosing an existing floor plan or hiring an architect to design your home. During the analysis of the land in due diligence, bring your builder to review the development costs and home placement options.
Financing a Custom Home
You can get a construction loan that includes the purchase of the land plus construction of a home to be built. Or, if you are not ready to build right away, you can pay cash or get a land loan initially. Once you are ready to build, you can roll the land value into the construction loan as collateral and get credit for the land value as part of your down payment.
A construction loan that converts into a permanent loan after the home is built is often called a construction to perm loan. With a construction to perm loan, the landowner owns the land and house during the entire construction timeline. This gives the owner influence and control over the process. The owner is responsible to carry the interest on the loan and make interest-only payments on the construction loan balance during the building of the home.
Hiring a Building Contractor
The builder is hired as your contractor, and the construction loan is in your name. The bank doing the construction loan must approve of your builder and verify their credentials and builder’s risk insurance.
The bank does periodic inspections of major system progress, like foundation, framing, roofing, plumbing, and electrical, to determine when to release funds to the builder, called a “construction draw.” The construction draw timetable is estimated ahead of time as part of the loan process.
Once the home is complete and a Certificate of Occupancy is issued, also called a CO, you can close on the construction loan and make it a permanent loan.
Legal Considerations
You will hire an attorney to draft and represent your best interests in a contract between you and the builder detailing the home build project. You will need a contract, whether you pay cash or get a construction loan. This contract will also be provided to your bank if you get a loan.
Choosing a Builder and Floorplan
The most fun part of building a custom home is choosing what to build! The owner can design a floor plan with an architect or explore top house plans with proven success being built. Some of the most popular floor plan sites for our local market in Georgia are GarrellAssociates.com, FrankBetz.com, or SouthernLiving.com.
Many local custom home builders have plans they can share and customize as well. Path & Post is happy to recommend top local custom builders for your project.
Building a fully custom home can be an expensive journey, but it can also be rewarding to create a one of a kind masterpiece!
