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Remodeling

Wish you could find that perfect home--one that has everything you want, a wonderful layout and the space you need? If you can't find your dream home, how about building it? Or maybe you've found an older home and want to start a major remodel.

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Be Armed with Good Information

Self-education is crucial when making key decisions
By Tom Stephani

The custom home-building process is fraught with opportunities for either success and happiness or failure and disappointment. That's why it's important to educate yourself thoroughly before you begin making plans for your new home. Being well-educated is the best way to make sure your expectations will be in sync with the realities of custom home building. Here are some pointers:

Cost doesn't necessarily equal quality
Many people believe cost-per-square-foot is a good yardstick for comparing homebuilders, but builders say selecting a builder on this basis ignores crucial qualitative differences among builders.

Building a home isn't a do-it-yourself project
Many people believe they can save money on a custom-built home by acting as the general contractor. Builders say saving any real money this way is unlikely and any potential savings are far outweighed by the possibility of financial disaster. Building a home takes experience and know-how. It isn't an appropriate project for amateurs.

Select your builder sooner rather than later
Some home buyers try to save money by buying the land for their new home and selecting a home design before they consult a builder. Builders say it's well worth the cost to obtain a professional's input during the site-selection and design stages.

Compare bids carefully
It's not uncommon for home buyers to obtain multiple bids on the construction phase of their custom new home, but builders say getting multiple bids isn't necessarily in your best interest. Bids are difficult to read and compare. If you decide to obtain more than one bid, be sure the bids are based on identical specifications and consider the quality of the materials, the builder's reputation and other qualitative factors in addition to the bottom line.

Find your financing
Some consumers are dismayed by the idea of getting a construction loan because they believe this type of financing is difficult to obtain. Nothing could be further from the truth. If your new home is well-planned and a professional builder is on board, construction financing typically should be relatively easy to arrange.

Expect the best.
Most people have heard at least a few home-building horror stories about excessive cost overruns, argumentative builders and incompetent suppliers and subcontractors. While reasonable cost overruns and a certain amount of stress seem to be unavoidable in the custom home-building process, having your new home built certainly shouldn't be a nightmare.

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Before You Start

Custom home building 101
Tom Stephani

Considering all of the potential problems-whether real or imagined--in building a new home, why would anyone consider hiring a builder, buying a lot and starting a home from scratch, rather than buying an existing ready-to-move-in home?

The reasons vary, but many custom home buyers cite the personal satisfaction of the home-building process as a compelling motivation. Others want a home with the latest in modern architectural design and home-building technology or a custom floor plan and home design that fits their individual lifestyle and needs.

Many people believe a brand-new home will require less maintenance or appreciate faster in value. And, naturally, some people simply enjoy the pleasure of living in a home that's completely new from the foundation to the roof.

A successful home-building experience depends largely on following a workable plan from the start through the completion of the project. Here's an example of a 10-step home-building plan that might work well for you:

Establish your budget.
Before you start making plans for your new custom-built home, ask a lender how much money you can qualify to borrow and what the down payment requirements will be to finance the construction and purchase of your home.

Select the general area where your new home will be built.
Spend some time investigating and visiting areas where you might want to live.

Choose a builder.
Select a construction professional to help you through the next few steps of the process. A preliminary agreement can afford you the option of selecting the same builder or a different builder to construct your home later on.

Pick a site for your home.
Choose the specific site on which your new home will be built.

Hire a home designer.
Select a designer whose work suits your taste and who will design a home that can be built within your budget on the site you've selected.

Choose a builder for the construction of your home.
The builder you select may be the same one who has assisted you thus far with the process of building your new home. You might decide to obtain one or more formal bids for building your home. The bidding builders will assemble subcontractors' bids, suppliers' proposals and other estimates into a formal cost analysis based on the complete written specifications for your home.

Finance your home.
At this point in the process, you'll be ready to arrange the short-term construction financing and the long-term residential mortgage for your new home.

Obtain construction-related approvals and permits.
Before construction can begin, you'll need official signoffs from the local government building department, utility services and the architectural control board or committee, if any, that has authority over your site.

Build your home.
If your plan has been well-executed, the construction of your home could be the easiest part of the process.

Closing and completion of final work.
After your home is built, the lender will fund your residential mortgage and the builder will make any repairs necessary under the warranty.

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Getting the Best Builder in the Business

Some homeruilders are a better fit with certain types of buyers
By Tom Stephani

Buyers sometimes say they want the "best" homebuilder in the business to build their home. The difficulty with that statement is that there is no one best builder or even one best type of builder for all buyers or even all homes.

The truth of the matter is that some builders are a better fit than others are with certain types of buyers and certain types of homes. That means a builder who is highly recommended by a friend or a relative of yours might not be the best builder for your needs.

Match a builder to your needs
Some builders construct more than one type of home, but most specialize in a particular type, size or style. Large-volume production builders construct many homes in a year while small-volume production builders work on fewer projects. Spec builders design and build individual homes to be sold during construction or upon completion. General contractors build preplanned homes while design/build contractors provide both design and construction services.

Most home buyers who want their own home individually built and designed select a builder who specializes in custom or semi-custom homes. These companies tend to be smaller in size and usually build far fewer homes than those that build production or tract homes. Most smaller building companies are operated by the owner, which means you'll be working with either him or her personally or a key employee. Occasionally, a custom or semi-custom home building company can become quite large. In that case, you may not receive as much personal attention from the company owner.

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Why You Should Choose a Builder on a Preliminary Basis

It helps to have someone guide you through site selection, design phases
By Tom Stephani

The type of contract the builder will ask you to sign for the construction of your home will depend on the type of working relationship you've established. The longest and most comprehensive option is a full general contract. The shortest and least complicated option is a construction management contract. The latter arrangement requires more time, commitment and effort on the part of the buyer. Getting some advice and help from your attorney before you sign a contract with a builder is a smart idea.

The contract typically can include the following provisions:

Price and allowances. These items outline what is--and is not--included in the builder's cost-breakdown.

Plans, specifications and cost-breakdown. These documents can be incorporated by reference into the contract.

Completion date.

Dispute resolution procedure. Negotiation, mediation and arbitration are alternatives to litigation.

Procedures for change orders.

Insurance. Including builder's risk, worker's compensation and liability. The contract typically should state the types of insurance and the policy limits and designate whether you or the builder will be purchasing each type of policy.

Warranty. The timeframes and performance standards for warranty work typically should be clearly stated.

Special conditions. Any issues related to soils, weather or other miscellaneous factors typically should be explained in the contract.

Contingencies. Examples of contingencies include obtaining financing or selling your current home.

Payment procedures. The contract typically should detail when and how payments will be made to the builder.

Choosing a builder without knowing how much your new home will cost to build may seem counterintuitive. However, it can be helpful to have a builder's assistance during the site selection and design phases of building your new home. The solution to this dilemma is to choose a builder on a preliminary basis early in the process with the understanding on both sides that you may later select a different builder for the construction of your home.

The preliminary agreement between you and the builder should afford you the opportunity to cancel the contract for any reason at any time prior to the start of construction. That way, you'll be in a better position to avoid repeating the preliminary steps with another builder immediately or, if the construction of your home has been postponed, in the future.

What does a preliminary agreement do?
A preliminary agreement provides an understanding of the services the builder will render and the fee for those services. Preliminary agreements typically retain the builder to assist the buyer in evaluating and selecting a lot, monitoring the design and specifications process, estimating the cost of building the home, preparing a loan application package and starting the building approval process. Expect the builder's fee for these services to amount to approximately 1 percent of the total construction cost.

If you later hire the same builder to construct your home, his or her fees for these preliminary services generally will be included in his or her cost estimate. If the builder's performance under the preliminary agreement is satisfactory and he or she bids a fair price for constructing your home, it's probably in your best interest to move ahead with the same builder.

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From Breaking Ground to Walk Through 

Stay on top of these 10 things as your home is built
By Diane Benson Harrington

A Consumer Reports investigation discovered that 15 percent of new homes have serious problems, some of which don’t show up until months or years after move-in.

Once your close on your loan, the house is yours — so be sure your expectations and the sales contract specifications have been met, warns the National Association of Home Builders. Here are several things to stay on top of as the home goes from blueprints to reality.

1. Fulfill your (realistic) dreams
If you’re building your own home, get it right before ground is ever broken. If you’ve always wanted a house where sun streams in through huge living room windows, then putting your house on a shady forest lot and downgrading to smaller windows to save money isn’t going to meet your expectations. A good architect and builder will help you get as close as possible to your dreams within your budget and the realistic constraints — and will make sure you know when you’re not getting something you wanted. To be safe, make a wish list of all the things you really want in a house — and mark them off as they’re drawn into your new home or cross them off if they don’t make the cut.

2. Site the house properly
You can do plenty of things to build efficiency and low maintenance into a house – but the way it sits on your lot can play a big role. Lots of south-facing windows can help heat the home in the winter (but be sure you can cover them up in the summer). But those windows won’t help much if that south side is covered with trees that block the light. If you’ve chosen a lot with a lake, is the house designed to truly give you the best views from the right rooms? Is the lot designed properly, with the ground sloping away from the house? If not, expect water damage. Does water slope away and then puddle in particular areas of your yard? Are gutters designed well enough to get water away from the foundation? (Use a hose to check, if necessary.) Even drainage means fewer problems.

3. Triple-check the architect and builder
Do a Google search, call your local Better Business Bureau, check your local newspaper’s archives, and inquire at your city or county’s planning/building/zoning department. You don’t want to move forward with a builder who has a spotty reputation. Other places to check: Homeowners for Better Building , where dissatisfied individuals exchange information about problems and solutions. Your city’s building inspection department can also help you learn what types of problems typically crop up in your area — whether its mold, problems with a certain type of siding, drainage issues, etc. Be aware that many of these building inspectors are notoriously overworked, and that some builders find ways to get around the required permits and building standards.

4. Ask about materials and construction methods
Consumer Reports discovered that faulty foundations, moisture intrusion, and shoddy framing typically were at the root of new-home complaints. Homeowners discover the problems down the road when huge cracks start appearing, walls start rotting, and windows and doors don’t close right. Tiny cosmetic problems may crop up as a new house settles — but bigger issues like these are not a good sign. Make sure your builder knows you’re aware of potential defects and ask whether he’s using any products that have been the subject of consumer complaints or lawsuits. Be wary of builders who plan to construct your home too quickly. Today’s average is 90 to 120 days. But faster doesn’t always mean better; sometimes it means unfortunate shortcuts or less skilled workers.

5. Key in on construction details
Don’t ever hesitate to walk through your house during the many phases of construction. Workers should pay as much attention to detail on the parts of your house that will be covered with drywall and paint as those that will show once the home is finished. Look for things like expertly seamed drywall (if you can see the drywall tape after the skim coat goes up, you can bet you’ll see it after the paint goes on, too), molding that fits tightly in corners with no gaps, weather-stripping around doors and windows, perfect paint jobs, etc.

6. Be cognizant of change orders
Any time you change something after construction has started, you can expect to cough up more money. Keep an eye on your budget, because while little upgrades here and there are tempting, they add up quickly (not just for products, but many times also for labor). When you’re doing walk-throughs of the house at various stages of completion, be sure these changes have all been taken care of. Items that weren’t in the original plans often can be missed.

7. Embrace quality landscaping
Trees and shrubs can make a huge difference in your energy bills, so make sure a qualified landscape contractor is helping you with decisions. You don’t want tree roots to eventually impede your water lines, nor do you want their limbs to eventually grow into electrical or cable lines. And you don’t want to plant sun-loving flowering shrubs in the shade of a big tree. Will the plants you’ve chosen provide the appropriate screening from neighbors or noisy highways? Don’t just think about how the plants look now. Picture them 20 years down the road. Consider maintenance, too. Will you benefit from an underground sprinkler system? Will a hose and sprinkler reach to that bed of flowers you want to plant near the sidewalk? Do you have hose bibs where you need them — one close enough to wash your car in the driveway, others well placed on the front and back of the house?

8. Check everything
Use a small lamp or hair dryer to test every electrical outlet. Turn on every faucet and spigot, flush every toilet. Confirm that all appliances are working properly, including air conditioning and heat. Are carpet and other flooring installed to perfection? Were closets painted? Do all doors and windows open, shut and lock easily? Consider hiring an independent home inspection engineer. It may seem like an unnecessary additional cost — but it could save you thousands of dollars and headaches.

9. Know your warranty
The warranty on your home from your builder covers problems with workmanship and materials — but it doesn’t cover issues that crop up because you didn’t do your job as a homeowner. For instance, notes NAHB, if your roof starts leaking six months down the road because of faulty workmanship, your warranty would cover it. But if it’s leaking because water backed up in clogged gutters you never cleaned, the builder is not responsible for repairs. Oven on the fritz? Don’t call the builder; appliances usually have their own warranties.

10. Read those manuals
Sure, you’d rather rearrange your furniture than read owner’s manuals, but if you don’t learn precisely how your new appliances and other home gadgets work, you may inadvertently break them. Ideally, your builder will walk you through the operation of every appliance — but read the manuals to be safe.

For more information, look into the book "Home Building Pitfalls" by Lawrence Thomas and Robert Batcheller. It takes readers from researching the community through the sales process through handling problems after you’ve moved in

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A Guide to Home Design

Follow these four steps to create your dream house
By Tom Stephani

Custom-home designs and specifications typically are created through a four-step process, as follows:

Step 1
The buyer brings his or her ideas for the home to the table or the buyer and builder develop some preliminary ideas together. Very often, buyers have saved pictures, articles, floor plans and other bits of information relevant to their dream home. The designer and builder can use your clippings to create a plan for a home that is buildable and will meet your needs and fit your budget.

Step 2
The designer begins the preliminary drawings based on your ideas and conversations with you and the builder. The preliminary drawings consist of rough sketches of proposed floor plans and levels, projections for the size and location of various rooms and concepts for siting the home on the lot. Accurate cost estimates can't be calculated at this stage, but the builder and designer can guide the project toward a plan that will be within your budget. A realistic cost estimate can be determined only from complete plans and specifications.

Step 3
Preliminary drawings approved by the buyer then are turned into working drawings. At this time, the designer creates the original drawings from which the blueprints for your home will be made. Working drawings may consist of four to 20 pages, depending on the complexity of your home and the level of detail in the drawings.

Step 4
Specifications-called "specs" — are created to identify the finishes and features that will be used in your home. The specs determine everything from the type of roof to the trip levers on the toilets. The working drawings determine the quantities of materials that will be needed and the specifications determine the quality of those materials.

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Who Should Design Your Home?

Turn to the professionals for help
By Tom Stephani

Most homes are designed by a home designer or an architect. The words "designer" and "architect" often are used interchangeably, but they don't have the same meaning. An architect has an academic degree and is a licensed professional trained in building design and structure. Many localities require an architect's or structural engineer's seal of approval on all building plans before a building permit can be issued.

A designer or draftsman, on the other hand, is a person who has some formal training and/or some experience in residential design. The designer's competence and the quality of the finished designs can vary from top-quality detailed drawings to amateurish sketches. All architects make designs, but not all designers are architects.

Many builders design their own homes or employ an architect or a draftsman to create designs, drawings and specifications for their customers. Builders who don't offer design services typically have lists of recommended designers and architects.

Design/build companies offer homebuyers these advantages:

1.    One-stop shopping.

2.    Synergy and cooperation between the designer and the builder. It's much better to have these pros working together on your behalf than to have them working at odds with each other.

3.    Cost savings and efficiencies can be achieved when the designer and builder work together.

Who should design your home? The answer depends on local customs, your needs and the builder's preference.

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The Pros and Cons of Ready to go Home Building Plans

Local building codes, materials dictate how you can use them
By Tom Stephani

Custom-home buyers frequently find attractive floor plans and home designs in magazines or books. These plans, which often are available by mail order, can be an excellent starting point for the design of your new home. However, while ordering a pre-packaged design along with the working drawings may seem cost-effective, there is plenty to consider before forging ahead.

Building codes vary dramatically from area to area, which means a prepackaged design and plan probably will need to be redrawn to comply with local requirements.

Building materials and construction techniques vary from region to region. That means a plan for a home in Texas or Georgia might call for building methods or materials that aren't practical, customary or even possible in Colorado or Illinois.

Home design necessities vary from area to area. For example, a screened-in porch may be sensible in the muggy and buggy Midwest, but an unnecessary expense in the dry and bug-free Southwest.

No matter how perfect a plan may seem, it almost always will require some changes. Even seemingly simple alterations can necessitate redrawing the plan, and that can turn out to be as costly as drawing a plan from scratch.

A difficult site can preclude using a packaged home plan. For example, a steep slope would make a one-level home on a slab foundation unbuildable without major changes to the design.

Whether a pre-drawn plan would be a wise purchase depends in part on your needs and individual situation.

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This Lot Is Your Lot

Ensure a successful project by choosing the right site
By Tom Stephani

The next step is to select the site on which your home will be built. Site selection or lot selection-the words "site" and "lot" can be used interchangeably-is a very important part of the home-building process because choosing the right site according to objective criteria will help to ensure a successful project.

Some custom-home buyers purchase a site or sign a contract to purchase a site before they establish a budget or engage the services of a builder. Taking the steps in this order isn't necessarily fatal to the project, but it can cause serious problems in the design and cost estimating stages of building your home.

Don't use hindsight to find the right site
The risk in securing a site before you select a builder is that the site may prove overly expensive to build on due to hidden factors. Doubtful soil conditions, the unavailability of utility services, easements or other restrictions on building might not be apparent to you.

If you already own a site, you may want to hire a builder to check the building conditions as soon as possible to avoid any surprises. In the worst-case scenario, a site can be so ill-suited for construction that building on it would be cost prohibitive.

Site selection criteria include the size of the lot, restrictive covenants, the availability of utility services, soil conditions, topography, solar orientation, the location of electrical power lines and the proximity of the site to heavily trafficked highways, railroad tracks or an airport.

It's natural and appropriate for you to have some ideas about the type, style and size of the home you want to have built; however, many aspects of the final design will be determined by the site. That's why designing your home most likely should be delayed until after the site is chosen. The location of rooms within your home, the orientation of your home with respect to sunlight, the location of the driveway, whether a walk-out basement will work and other design elements will be affected by the site.

Some builders own or control the lots within a housing development. In this situation, you probably shouldn't take the builder's word as an objective opinion on a site. A better course of action is for you independently to investigate the soil conditions, building restrictions and other aspects of the site or hire a land expert to help you. To locate a land expert, refer to "engineers-land planners" in your telephone directory.

Buy smart – you have options
If a builder you don't wish to hire owns the home site of your dreams, you can try to buy the site from that builder or ask your preferred builder to buy it for you. If the builder refuses to sell the site, your only choices will be to hire that builder or find another site for your home.

Purchasing the site for your home will involve negotiating the price, the terms and conditions of the sale, any contractual contingencies and a deposit. Builders sometimes receive a discount on land purchased from a developer. In that case, you might be able to negotiate a pass-through of this discount from the builder to you.

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Making Your Home-buying Process Run Smoothly

Six tips to getting along well with the builder
By Tom Stephani

If there's one point on which most home builders agree, it's that the home buyer's attitude and behavior are key factors in whether the home-building process will run smoothly or become a living nightmare for all concerned. Here are six tips for getting along well with the builder:

1.    Hire a qualified builder and work with him or her to assemble your home-building team. Getting involved and making good decisions will help make the home-building experience rewarding for you.

2.    Be realistic about your budget. A custom-built home is unlike any other purchase you'll ever make. Price is important, but it probably shouldn't be the driving force in choosing a builder. Don't attempt to build "more house" than you can afford. Having a budget that is inadequate for the home on the drawing board is an invitation to disaster. It's wiser to cut back on the size, complexity, features or finishes for your new home than it is to stretch your financial resources beyond your comfort zone.

3.    Be prepared to get involved. Regardless of the type of contract that exists between you and the builder, having a new home built will require a substantial amount of your time and effort. Minimize your other commitments, projects and obligations to the greatest extent possible so you can concentrate on your new home.

4.    Communicate with the builder. Tell the builder what you're thinking. If something is bothering you, talk about it with the builder. Don't let your concerns, disappointments or gripes add up until you reach the boiling point.

5.    Control the urge to make changes once the plans and specifications for your home are completed. Nothing causes builders, subcontractors, suppliers and even buyers more grief than alterations. A seemingly insignificant modification can cost a significant amount of money and time. Small changes can ricochet through the home and later become major problems.

6.    Focus on the goal. Designing and building a custom home can be one of the most rewarding and profitable experiences of your life or it can be stressful and frustrating. Educate and prepare yourself, cooperate with the builder and be patient.

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Choosing Where You Want to Live

Investigate the area of your choice thoroughly before building
By Tom Stephani 

One of the most important tasks in a successful home-building project is choosing the geographic area where you want your new home to be built. In this context, "geographic area" means the general vicinity where you will be living. The idea is to choose the county, the city and maybe the subdivision where your new home will be located before you choose a specific building site. If you don't investigate the area thoroughly before you decide to build, disappointment may be the result.

Investigating an area takes time and effort. Here are 10 factors you may wish to consider:

Price
The area typically should have homes priced within your budget. It's unrealistic to try to build a moderately priced home in a luxury-home area and it's equally unwise to try to build an expensive home in an area of lower-priced homes. Eventually, you will want to sell your home, and it's generally easier to sell a home that is consistent in value with other homes in the neighborhood.

Economic potential
Some areas are growing quickly, others have stable growth, and still others are in a period of decline. Choosing an area that's experiencing an economic decline may prove unwise. A hot area can offer quicker appreciation in home values and a wider choice of subdivisions and home-building sites, but fast-growing areas tend to suffer from growing pains. Infrastructure, schools and public services might not be adequate to meet the demand from new residents. Traffic and commercial development tend to be more hectic in growing communities as well. Stable communities offer slower home value appreciation, but are more likely to have infrastructure, schools and public services in place.

Commuting time
Home buyers tend to visit various areas during off-hours or on weekends when the traffic is light and the driving time from home to work seems reasonable. If you are considering an area remote from your place of employment, practice the commute during the hours when you'll normally be driving to make sure the commitment is acceptable to you. You might also want to consider the location of grocery stores and other types of shops that you frequent. A beautiful subdivision in the country can lose some of its luster when you realize the nearest store is 10 miles away.

Property taxes and assessments
Take a realistic look at the real estate taxes you can expect to pay in the area. A little extra research probably will uncover any planned special assessments or tax increases. Fast-growing areas tend to need funds to pay for new infrastructure, schools and public services.

Schools
The quality of the public schools in an area is among the most important considerations for families with children. But people who don't have school-aged children also usually should consider the quality of the local schools because that factor will affect every home's resale value. You may also wish to consider the area's proximity to the religious services you attend.

Law enforcement and fire-fighting services
Don't overlook the availability of police and fire protection services in an area, particularly if you're considering a rural community. Making sure these services are available and of high quality is important not only for your health and safety, but also because the lack of such services can significantly increase your homeowner's insurance premiums.

Physicians and medical facilities
Will you be able to find a suitable family doctor near your new home? If you have pre-existing medical conditions, are necessary specialists practicing in the area or within a reasonable driving distance for you? Does the area have a hospital and emergency room services? Even if you don't have an immediate need for medical services, their availability can prove life-altering in the event of a medical emergency or serious illness.

Parks and recreational facilities
A good parks and recreation program can enhance your family's life and make living in an area more enjoyable. These public services also can affect the resale value of your new home. Find out whether youth sports programs, community events and ample parks exist in the area.

Utilities
Be sure to investigate the availability of utility hookups before you decide to build a home in a particular area. Will public water and sewer hookups be available? Will your new home require a septic system? Confirm the availability of natural gas, telephone and cable television services. Ask about the fee for initiating each service and typical monthly bills.

Quality of life
Research any other situations that could detract from or add to the quality of your life in the area. Are plans in place for a new international airport? Will your home be uncomfortably close to train tracks or heavily trafficked highways? Is there a sewage treatment plant or landfill in the area?

Finally, if you want to live in a subdivision where the for-sale lots are owned by one builder, you may be forced to hire that builder to construct your home. If that's the case, you'll need to take the builder's reputation into account when you decide whether you want to live in that subdivision. You may be able to buy an individual undeveloped site within the subdivision from the developer, the builder or a private party, but make sure you know the ground rules before you set your heart on a particular subdivision.

Keep in mind that your new home will be more than "sticks and bricks" on a lot. You and your family will join an existing community and your enjoyment of your new home will depend largely on whether you choose your new community wisely.