Building your own home is a popular decision for many millennials when it comes to their dream home. In reality, a lack of property to purchase is forcing the decisions for many, but with millennials leaving the home buying process until they are older, they know what they do and do not want in their homes.
Before jumping in feet first to building your new home, there are a few things you need to keep in mind.
How Much Will It Cost
Looking at the costs to build a home is about more than buying the plot of land and paying for a contractor to build it. Deciding on the house you want to build and how big you want it to be will factor into how much the home will cost to build, but home construction is slightly different from buying an existing property.
First, you will need a home construction line of credit to pay contractors and subcontractors, and then you will need a residential mortgage to pay for the home construction line of credit.
Do Your Research
Don’t just hire the first person who gives you a quote or pays you lip service to win the contract. Beware of competitors massively undercutting on prices and ask if they will cut costs and quality during the build. Look online for recommendations and reviews from previous clients and ask your local community to get a feel for what people think of them and what their reputation says.
Build to Sell
Making the home meet your needs and your interior style is one of the benefits of building your home over buying one. However, it would be best to keep the resale value in mind when choosing the design and interiors. Avoid opting for something out of the ordinary or for a niche taste, as this could affect the resale value should you need to sell the property in the future.
Punch List
A punch list is a list you need to create at the end of construction detailing what needs to be finished or repaired. A punch list can fall into two categories—reasonable and unreasonable flaws. Unreasonable flaws are fixes that are unacceptable and need to be rectified or finished immediately. Reasonable flaws are smaller fixes that do not affect the quality of your new home. Once you have fixed all of the unreasonable fixes, then the home is ready to move into and is completed.
Be thorough and make sure your contractor and real estate agent, if you have one, are with you when you make the list, so all parties are aware of what needs to be completed. Make sure to put the money needed for your punch list in escrow; this allows you to move into your new home while still requiring the builder to complete the items on the punch list.
Once you have completed escrow, you can move in and enjoy your new home!