Having a House Built: Lessons Learned
Lessons Learned: Having a House Built
Mortgage
Start talking to banks and bankers early - once you find one that gives you a mortgage rate you like, talk to them, get all the details of how mortgages work and make sure you have all the info you need. Get pre-approved and pre-qualified if you can. There's a whole ton other advice that I'm skipping over in this area for the more relevant topic of this post.
Contract Time
When you enter into the contract, make sure first of all that you aren't doing a construction loan. Make sure the builder gets paid once they finish the entire deal. Next, make sure you take into account everything you expect in the contract - if they have a standards sheet, go ahead and list their standards sheet as what they have to provide, along with any extra stipulations you have. For example: appliances included? mailbox? Garage door opener? Where will the house be built (where on the lot)? Grading/seeding/sod? Make sure anything extra that is added on to or subtracted from the house needs to be approved and signed on both sides as an addendum to the contract later on if such items come up. (So they can't randomly add in a million dollar staircase and charge you for it.) If you don't have your own realtor, ask for a blank purchase agreement (contract) so that you can review it and decide what you expect for each of the items on it. Items to be covered in the contract: Standards sheet, floorplan, changes to floorplan, additions to the plans, subtractions from the plans, inspection expectations, warranty, earnest money, price, surveys, home owners insurance, mortgage lender, etc. Read the “Building phase” part of this lessons learned for more info that you want to consider here in the contract phase so that your building phase goes smoother.
Price-wise
Take a look at how much they are asking, take into account the realtor's fee, look at the quality of what you will be getting (check out the options you have for flooring, paint, fixtures, layout, etc.) and decide how much you think what you are asking for is worth. Once you have that number, don't be afraid to knock off a few thousand - never hurts to try.
Offer
When you make the offer, make sure /everything/ is in the package. If you have a real estate agent they'll probably do this for you, but if not, make sure you've not forgotten anything. And, as always - MAKE A COPY OF EVERYTHING.
Building phase
You need to constantly be checking the process every step of the way. I was there almost everyday after work, seeing what had been done... for 6 months. Otherwise accidents might happen (true misunderstandings or skirting of the contract) and you might not know. My builders were pretty good, but others might not be.
Items to think about beforehand so that it's either in your contract or you know what to do when it comes up:
Mortgage
Start talking to banks and bankers early - once you find one that gives you a mortgage rate you like, talk to them, get all the details of how mortgages work and make sure you have all the info you need. Get pre-approved and pre-qualified if you can. There's a whole ton other advice that I'm skipping over in this area for the more relevant topic of this post.
Contract Time
When you enter into the contract, make sure first of all that you aren't doing a construction loan. Make sure the builder gets paid once they finish the entire deal. Next, make sure you take into account everything you expect in the contract - if they have a standards sheet, go ahead and list their standards sheet as what they have to provide, along with any extra stipulations you have. For example: appliances included? mailbox? Garage door opener? Where will the house be built (where on the lot)? Grading/seeding/sod? Make sure anything extra that is added on to or subtracted from the house needs to be approved and signed on both sides as an addendum to the contract later on if such items come up. (So they can't randomly add in a million dollar staircase and charge you for it.) If you don't have your own realtor, ask for a blank purchase agreement (contract) so that you can review it and decide what you expect for each of the items on it. Items to be covered in the contract: Standards sheet, floorplan, changes to floorplan, additions to the plans, subtractions from the plans, inspection expectations, warranty, earnest money, price, surveys, home owners insurance, mortgage lender, etc. Read the “Building phase” part of this lessons learned for more info that you want to consider here in the contract phase so that your building phase goes smoother.
Price-wise
Take a look at how much they are asking, take into account the realtor's fee, look at the quality of what you will be getting (check out the options you have for flooring, paint, fixtures, layout, etc.) and decide how much you think what you are asking for is worth. Once you have that number, don't be afraid to knock off a few thousand - never hurts to try.
Offer
When you make the offer, make sure /everything/ is in the package. If you have a real estate agent they'll probably do this for you, but if not, make sure you've not forgotten anything. And, as always - MAKE A COPY OF EVERYTHING.
Building phase
You need to constantly be checking the process every step of the way. I was there almost everyday after work, seeing what had been done... for 6 months. Otherwise accidents might happen (true misunderstandings or skirting of the contract) and you might not know. My builders were pretty good, but others might not be.
Items to think about beforehand so that it's either in your contract or you know what to do when it comes up:
- Foundation - slab? Crawlspace? Basement? Check that they're level. Do you want any sort of coating on the blocks to prevent mold/mildew from the area? Sump pump? Gravel? Plastic? Will your downspouts be buried? (That way it carries water away from the house.)
- Framing - check that things are level and square if you can - make sure floorplans that were agreed upon are acted upon. (They framed out a closet later on that they'd left out in the beginning because I'd asked them to leave it out... when they framed it later I had to tell them to take it off. It was a simple mistake, but had I not caught it, it may have been drywalled the next day.) What type of board do you want to use in your house? OSB? Plywood? Are the windows where you want them? (They framed a window in my bathroom, which was in the plan, however there was to be a 2 bowl vanity across the area, and Chris said to me “aren't you going to have a double bowl vanity that goes all the way across this wall?” and I said “yes...” and he said “not with that window framed that low.” So I had to go back and tell them to frame the window shorter so the vanity could be put in.) Are they the types of windows you asked for in the contract?
- Rough-in - where are the electrical boxes? Most of the time they are set out by code (there have to be so many a certain distance apart), but you can ask them to move some or add one where there isn't any. THINK ABOUT THIS NOW. For example, in my upstairs master bedroom, there is a cable outlet on the wall with the doors to the closet and bathroom on it... and a phone jack on the opposite wall (blank wall, where a dresser might go). It's a very odd spot to put a tv, and there's no way to run a cable to the opposite side of the wall (through the wall/ceiling) because I asked for vaulted ceilings, so it would be very difficult if not impossible to do it without busting through ceiling and drywall now. Figure out where you think you'd want to have the electrical outlets, and ask for them where you want them. Remember, they will charge you for adding in additional outlets over the standard amount that they put in - so make sure you know what they put in up front so they don't charge you for something they're already giving you. I would say this is an area to splurge though, since it's much more work to go back and add some later in cases like vaulted ceilings. Where are the light switches? (I ended up having a light switch right under part of my banister railing to go upstairs - didn't know it'd be a problem where it was til they put the banister on, which was of course after having the drywall put on and it painted. I asked them to move it and they did, but that's something else you want to catch as soon as possible.) Are light fixtures in the right place? Where are the plumbing rough-ins? Are they where they should be?
- Insulation and drywall - How much do you want to insulate your house? I asked them for insulation around the laundry closet, so that it could drown out some of the noise of the laundry (especially since there's a bedroom that shares a wall with it.) You also might want to ask them to put extra insulation in walls that have a bathtub against it for noise reduction. Bathtubs that have their water turned on and off can be very loud when someone does it at 6am and you don't have to be up til 8am ;-) They insulated the area where the bathtub shared a bedroom wall in my house - but not the rest of the wall. So if you want the whole inside wall insulated, that's probably extra and you need to tell them. In regards to drywall, just make sure you're getting good quality stuff - there was something about bad Chinese drywall a while back, I don't know what it was about but I talked to the supplier of the drywall and they said theirs was not from china... so hopefully they were telling the truth =)
- Painting/spackling/doors/flooring/cabinetry/appliances/fixtures/trim/etc. - all these last items start coming together. Make sure the paint is the right color you asked for. Make sure they do a good job on the wood floor/tile/carpet/vinyl/what-have-you. Make sure they caulk around the base of the tub in the bathrooms, so that water doesn't get in the cracks and wet your subfloor. Make sure the cabinets are what you expect, if there's any cracks or dings ask them for a new piece. Make sure all the doors are what you expect, check to see if they have doorstops if you need them. If they provide appliances, make sure nothing got scratched and it's what you asked for. Make sure they hook them up (this may be something to put in the contract too). Check light and bath fixtures just to make sure they didn't scuff them. (My sink was new but had a dent in it when I looked closely - I caught it in my walkthrough but if you don't catch it you're stuck with it so look carefully on the walkthrough.) All in all, these are the last items you will check more thoroughly on a walkthrough.
- Grading/seeding - Make sure water flows away from the house in all aspects. You don't want water puddling by the side of it. I didn't specify how much grading was to be done in my contract, and they had to put a swale in the back of my lot because all the land around me sloped down to my lot... so the back part of my lot had to help carry away everyone else's rainwater. Think about this and specify in the contract if you expect special grading to be done for the price you're paying. They basically told me they could change the layout of the swale (I think it cuts my backyard in half, and that they could have pushed it back more) if I gave them more money.
- Walkthrough - there are several checklists out there on the internet to help you (I used this one: along with some others) Make sure you check EVERTHING. Toilets flush? Hot water work? (You might need to turn it on first.) Do all the outlets work? All the windows and doors open and close easily? All cabinetry still look good? Fixtures? Flooring? Mirrors? Look for dents/scratches in everything. Make sure the heating/cooling works. If there are fans, make sure they work. Don't forget the outside of the house - gutters? Drainage? Grading? Seeding? Porch? Patio? Garage? I can't stress enough to check everything - it's fine to be picky, it's a new house. I would also suggest having your own inspector come out if you have the money for it. I didn't, but that's cause I didn't have the money for it =)