“Everything you want to know from A to Z”
By Jill Allen
FINDING THE PERFECT LOT
If you have decided to purchase a lot for your dream home,
there are several things to consider.
1. Location – Both the development that fits your lifestyle and the location of the lot are two key considerations. If the development is “established” you can feel comfortable that more homes will be built and it will be a successful neighborhood.
In addition, choosing the correct location for your lot is important. Whether you prefer a water view, or a cul de sac, corner lot, etc. check out several options.
2. Price – The adage “you get what you pay for” may apply! Why is the price low? Is it a short sale, a bank foreclosure, or is there a defect in the lot? Location near an electrical or sewer substation, an odd shape limiting your building choice or backing up to a noisy road may all command an attractive price from the seller, but don’t purchase for price alone.
3. Homeowner Association Restrictions – Two documents that you should read BEFORE purchasing are the Home Owners Association Covenants, Conditions and Restrictions (CC&R) and the Architectural Review Board guidelines. You may have ideas on building that are not compatible with the minimum square footage or the exterior of the home. Once you own your lot, you must follow the rules. Also find out whether there are any time restrictions for building.
4. Cost of maintaining your lot before you build – Does your HOA require that you mow your lot or do they set up a yearly fee to mow it for you? What about the HOA dues? Are they the same cost per year for lots and homes? Taxes are based upon the sale price of your property as the investor rate. (This is approximately 1.5% of the sale price).
5. Your Survey – It’s very important to have a survey completed and most contracts will have a clause making the purchase of your lot contingent upon a survey that verifies the size of the lot. It also shows you the depth, where any right-of-ways may be on your lot. Cost is generally less than $500 and the value is priceless.
Now that you own your lot, what do you do?
Are you building right away? Here’s the exciting part!
If you have completed your “homework” on Page 1, you are now educated on the set back lines, the Architectural Review Board (ARB) requirements, and what your community requires.
Make your “wish list” of what you want in a custom home. Visit local developers home sites, open houses, check out websites….. there are a number of books that offer house plans.
Your first goal is to select a home that will fit comfortably on the lot. If your lot is 60x175, and the side set backs are 7 ½ feet on each side, your house may not be wider than 45 feet. Keep in mind that some developments allow you to place your HVAC outside equipment and your house eaves in the setback areas – but make sure you confirm this with the ARB. If your lot has an easement (ie. The access to a common area element… this maybe the development’s or a utility company access to the pond behind you ), you may not build on the easement. In addition, if a fence is a prerequisite for your family, verify what type is allowed and where it may be installed.
Secondly, if you purchased a lot on a pond or lake, the rear lot line may be inside the lake (THAT’S why you want that survey!), So, between the front, rear and side set back requirements, you will want to choose a home that fits.
So, you have “THE PLAN”
Your next steps are twofold. You must arrange for financing (if not paying cash) and find a builder. Let’s address financing first since you can’t hire a builder without money!
Local lenders and banks are your best choice since they will be familiar with your local builder and how a construction loan works. You can opt to take a home equity loan on your present home but remember that it may take a month or longer from the time you apply until the money is available.
If you are planning on a construction loan, this will allow you to have money readily available as each stage of your house is completed and the draw is due. Initially the builder will require a deposit for him to start and that may include any HOA bonds (money that the Homeowner Association requires to be held in escrow to assure that your builder and you comply with the terms of building). Each stage of completion will require an additional payment to the builder that must be readily available.
Also keep in mind that new homes require “new things”…..like blinds, new furniture, etc. so make sure your budget has some leeway.
Finding the Perfect Builder for your Dream Home
You are now at the stage to start the interview process. When choosing a builder, you need to keep in mind his expertise, local building codes knowledge, and reputation in the community. One additional factor is your comfort level with their company.
I am sure that during your research, you have looked at a variety of open houses and talked to friends and neighbors who may have already been through the building scenario. Word of mouth is important and seeing the quality of the workmanship a must. As a Realtor, I have been able to bring one more benchmark to the table, in viewing resale homes built by a reputable builder and seeing “how they have stood the test of time”.
My Personal Experiences will help you, too.
Since my husband and I are building a home in Carolina Waterway Plantation, we can offer you recent experience. We started with the same homework as I have advised, and visited some open houses. Our house plans were similar to a plan from a local developer who only builds in his community. We interviewed two builders who have worked in Myrtle Beach for a number of years. Both were well qualified, had excellent reputations, and gave us excellent advice as we met with them. We chose Sterling Homes who I knew built homes in Waterford Plantation and several other well respected communities.
Why did we choose Sterling Homes? Not only did they provide the expertise and flexibility we needed to design the “perfect home”, but there was a genuine comfort level with Clinch Heyward and Harry Dill that I knew we would work well together…… a sort of “karma”.
They also build a certified Green Home by the Environments for Living standards. For more information, please visit the websites of www.sterlinghomessc.com and www.elfhome.com . If is important that we all take an approach to saving energy.
Sterling also “gives back” to the community. They are a three times builder of the Extreme Makeover helping several deserving families. We follow the same philosophy…… so it was a good fit for both of us.
If you are going to entrust several hundred thousand dollars to your builder, make sure you “do your homework” with interviewing. Make a list of questions to ask:
1. How long until we can move in?
2. Can I visit the site?
3. What changes can we make and when are decisions due on our plans?
4. What is the warranty on my new home?
5. Who do you use to subcontract your work? Can we talk to them, too?
6. What about weather delays?
What are the steps from finding your builder to breaking ground?
When you sit down with your chosen builder for the first time, he will see your “wish list” and suggested floor plan that suits your needs. (He will also be familiar with your community and what the ARC requires.) After discussions of what is important to you, the builder will have his architect develop the house plan both giving you an interior and exterior design of your home. A good architect takes your ideas and his expertise and combines them into a house plan that is architecturally correct, as well as adding ideas that may work better for the floor plan. When he is complete and you have reviewed the plans and tweaked them one last time, you have the perfect plan for you.
Our personal experience…….
The architect who designed our home tweaked the closets and my home office to allow a great flow. In addition, he placed the steps to the attic storage inside the house, so walking up a stairwell vs. the pull down attic steps adds great ease for us.
DRUM ROLL ……. PLEASE! The cost of your new home…..
How do we get to the bottom line? Well, here’s where your builder works hard for you. All of the “wish list” items have values that add to your home. Cost of brick, size of the home, hardwood floors, kitchen cabinets, screened porches are all individual items that must be priced by the subcontractors.
The builder will send out specifications to all of his vendors for pricing on the special items. As an expert in building, he will calculate what it will cost to build your home…… price of materials and labor will vary with each home. Adding these all together equals the cost of your new home to you.
You will sit down again with your builder to review the costs. If it’s straining your budget, now’s the time to talk about it! When you are satisfied that your wish list and budget are in compliance, the next step is your contract with the builder.
The Builders Contract – Fair to you and fair to the builder
Your commitment to the builder that you will pay for his workmanship and you will receive a good product is spelled out in your contract.
The contract will have specific performance documents……here’s a few highlights.
1. When the construction will be completed
2. The price of the work which includes your allowances, materials, and labor
3. Change order costs
5. Termination of the contract
7. Builders Risk Insurance
8. Possession at completion.
9. Specifications to insure everything you want is spelled out.
Your initial deposit with the builder and the schedule of draws will be explained at this time, too.
Are you ready to begin building now? No, not quite yet. There is one more very important step to overcome and that’s submitting your plans to your developments’ Architectural Review Board for their stamp of approval.
We recommend that you have asked for the ARB procedure and have already reviewed their application and requirements.
Our personal experience……..
The Carolina Waterway Plantations ARB guidelines were 14 pages. The application included 14 pages plus 12 submissions from the builder, a payment of a nonrefundable $500 submission fee, and $4000 in a performance , road and landscaping bond. They meet once a month on a designated day.
The ARB usually has a licensed architect on retainer to help them with their review. When your plans are approved, or they have made a requirement for a change and it’s done, you will receive their approval in writing.
Now can we start building????? Almost! The builder must apply to the county for permits, begins ordering supplies, schedules his subcontractors……..
AND NOW THE FUN PART BEGINS!
Permits from the county allow the builder to start work. Weather sometimes interrupts, so remember the adage “Patience is a virtue”.
If you are lucky enough to live in the area while your home is under contruction, you can visit your site and see the progress. Your builder and his construction superintendent will be on the job to keep your construction on schedule.
As soon as the property is under roof and before the drywall begins, you will have an electrical walk through. Prior to this date, you will have decided where you want to locate lighting, phones and cable. Think “resale” in this process because you may not watch television in your master bedroom, but the rest of the world does! Add the extra cable connections and ceiling fan boxes now. You never know when you might rearrange furniture and need them. The electrical walk through will allow you and your builder to confirm where all the electrical componets are located and that you have all that you need.
A personal note on outlets:
If you have a large open living or family room, make sure you think about a floor outlet. If your furniture will “float” in the room, where will you plug in your lamps?
Also, ceiling fans (or at least the pre-wires) on a screened porch are a nice plus.
Close to the end!!!!!
As anxious as you are to occupy your home, it’s important that it’s done right! So, when it’s 99% done, you will schedule to do a “punch list” walk through. The builder will meet you at the property, and you will walk from room to room looking for the items that may need one final tweak. A nick in the wall, an area where the paint was missed, a crooked knob…….. these are the items that we are looking for when the punch list is done. The contractor will finish it up the right way.
Your builder will also instruct you in all of the features of the home……showing you the breakers, HVAC system, and providing you with all the documentation and warranties. They will also give you a list of the vendors they used and who to call in an emergency for anything under warranty.
During the entire building process, the County Code Enforcement officers are making periodic checks to ensure the building code guidelines are in compliance. So our last step in the process is the “Certificate of Occupancy” issued from the county.
It’s moving day!
You have been waiting 8 to 9 months for the building process from the moment you purchased your lot until this day arrives, but with the right builder you have the pride of owning a well built home.
Let me help you get from A to Z in finding your dream house.
As a local Realtor with my fingers on the pulse of our market, I can ease the process of finding the lot and working with you to build your home. Please feel free to call me for advice to make your transition into your Dream Home a reality.
J.B. Allen Real Estate
843-236-9749 or 800-310-9633