Updated: Dec 22, 2019
People say building is not for the faint of heart. Quite true. Because there are many critical components to iron out for a custom home to work out, it can become a long-drawn process that doesn't lead to fruition in the end. Before construction started for our new house, we took 5 months (from February to July) to design the floor plan and decide if it was feasible to build. A couple of our friends actually used more than a year to finalize everything.
Going into the planning process, we were pretty clueless at the beginning. We knew what we were looking for: a two-story house in our school district that was newer and bigger than our 1960 starter home. Location was our Number ONE consideration. The new lot is only 1 mile east of our old house and the construction site was already prepped and ready to go, so this part was easy.
But of course there was a lot more work to do than finding the perfect lot. Because we didn't know what to expect, in the first meeting with our builder, we went straight to business by presenting a list of 10 must-haves and 8 nice-to-haves in our new house. This was distilled from 70+ various items that we brainstormed and prioritized. (Can you tell we are both very detail-oriented type A personality? I am sure we’ve driven our builder nuts multiple times during the build.)
We are checking off most of the items from this list (yay!). There are certain things that we changed our minds on because of cost or usability, more on that in another post. But looking back, there were actually more important questions I wish I had asked early on. Custom build is quite localized or even individualized, there is no one set of rules to follow nationwide. Different builders have different work style and processes. So to ensure a smooth planning process, it is critical to have a good understanding of project timeline, expectations, the builder’s project management approach, communication style, allowance handling, and contract structure. These are the questions that I think will greatly help ease my anxiety if they were well-understood from the beginning.
One of the biggest sources of tension in building is allowance. Although our builder gave us a pretty reasonable amount of allowance in all the categories, I have read numerous horror stories online about dishonest builders setting the allowance at an unbelievably low level in order to lure potential customers or being extremely ambiguous with what is included so they can profit from change orders. Another risk that people run into is underestimating the amount of time and effort it takes to make decisions—with a house there are countless details to decide, some trivial, some have important implications—this can be a very stressful time, if the builder has an in-house designer or a good project manager who can guide home owners through the process it would make things a lot easier. Not to mention helping to control stress level (blood pressure) when the time gets tough.
In this post (link), I described how we found our almost perfect floor plan and the iterations we went through to make it perfect. The back and forth with architect took almost two months.
In May, after meeting with our builder to fill out the specification form and having the architectural drawings, it finally came time to bid out the plan. Our discussion on building specification was not complicated at all, we asked for everything basic and only specified a few things we absolutely want to include (e.g. water softener, no carpet on the main level). Then it was a loooong two-week wait. We were on pins and needles during these two weeks. Right after our builder sent out the bid documents, he alluded to the possibility that our house will be at the higher end of our budget. Being a financial conservative as I am, I was so worried—after all the hard work and anticipation, will we end up giving up the idea of building, or worse yet, live house-poor by overextending ourselves? Lots of emotion going through, and I frantically looked everywhere to find cost saving ways to build a house, and spent endless nights revising our floor plan to cut down on square footage. I was in a crazy CUT mode. If I can cut to the bare minimum, can I still make the build work?
Because I was doing all of these mental calculations, by the time we found out about the quoted price, I was not in shock any more. In the back of my mind, I knew if it didn't work out, we would just walk away. We asked our builder if there was anything we could do at all to bring the number closer to our comfort level.
And so we worked together to come up with these things we could reduce from the plan.
After we were certain there was nothing else we could cut (well, sort of, since it was not really feasible to redraw the floor plan), we signed all the documents and submitted them to the bank for approval. We were the borrowers of the construction loan and worked through a long time friend/broker to secure the loan. Because appraising an empty lot is a lot harder than appraising an existing building, the appraisal took a while, which put me on edge again. But thankfully it completed in time without complication. In mid-July, we got the loan and were ready to dig. The ordeal of new construction planning finally came to an end.