Things to Know Before Building a Home

Building a house is something most people only do once or twice in a lifetime. Before you start, there are some things you need to know about the land, county building restrictions, financial institutions and the builder. Getting your facts lined up before you sign papers will go far toward making building your house a less harrowing proposition.

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The Land

You’ve found a piece of land that calls to you. The first thing you will need to know is if the property percs. This means that the soil absorption rate is right for the introduction of a septic system. If the property doesn’t perc, an engineered septic system, compliant with county health codes, will be necessary for installation.

Prospective homeowners will need to know the soil type for landscaping. Landscaping provides not only a pretty view but windbreaks, erosion control and shade from the sun.

The homeowner will also need to know about the occurrences of flooding and fire. If the property lies in a flood zone or has burned before, it may be difficult to get homeowners insurance. A quick way to find rates and quotes for your home is to visit

The County

The city or county building department can tell prospective homeowners of any building restrictions on the property. If the property is being developed, the developer may also have restrictions, or covenants. Make sure you are in compliance with any restrictions before putting pen to paper.

The Bank

Prospective homeowners will take out two loans to build a house: a construction loan and a mortgage loan. The construction loan is used to pay the contractors for the building costs and for features in the house. Get an estimate and then add about 25% to the estimate to cover such unforeseen instances as:

•Stamp taxes
•Transfer taxes
•Loan establishment fee
•Mortgage insurance
•Conveyance cost
•New connections for utilities and phones

The homeowner will also need to know from an insurance expert what items are covered in land purchase and building. The homeowner might qualify for a package covering several instances in the building and ownership process.

Before searching for land, it is a good idea to shop for lenders. Local lenders tend to be supportive of their neighborhood and should be contacted first. When you have pre-approval based on credit standing, gather information about the project. Once the homeowner has a notebook full of prices and costs, he will be ready to approach a lender. Homeowners will be in a better position to apply when they have facts and figures in hand.

The Builder

There are two types of builders: project builders and custom builders. If prospective homeowners go with custom builders, getting comparison quotes may be difficult. Each builder knows his own designs, which means going to multiple builders in order to make a decision. Homeowners should check with each builder’s references to gain an idea of the quality of the builder. Friends and family might also have opinions on builders.

Prospective homeowners need to work closely with their builders. There will sometimes be decisions to be made that only the homeowner can make. If the homeowner is unavailable for consultation, the builder will make the decision. This may mean corrective measures down the road if the decisions are not palatable to the homeowner. Keep written and pictorial records of every stage of construction to avoid later problems.


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