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Guide to Building a Custom Home: Tips and Strategies

October 09, 2024

When it comes to building a custom home, what you don't know can be just as important as what you do know — and for first-timers, there's a lot that falls into the first category. The journey from blueprint to move-in day is filled with decisions, processes, and potential pitfalls that may not be immediately obvious.

This guide aims to clarify these "unknown unknowns." We offer eleven essential tips and strategies to navigate the custom home-building process. From defining your vision to understanding contracts, we'll help you ensure your dream home becomes a reality without surprises along the way.

Define Your Vision

Before you break ground on your custom house-building project, clearly define what you want. Start by creating a list of must-haves versus nice-to-haves. Consider your lifestyle needs:

  • Do you want a dedicated home office?
  • An entertainment space for hosting gatherings?
  • Ample storage for sports equipment or hobby supplies?

Gather inspiration from magazines, websites, and model homes, saving images that resonate with you. As you collect ideas, patterns will emerge that help shape your overall vision.

Once you have a solid idea of your dream home, prioritize the features based on your budget and long-term goals. Prioritization will help guide your decisions, ensuring you choose the right house plan and invest in the fixtures and finishes that matter most to you.

Understand the Timeline

Custom home building is not a quick process. Depending on the complexity of the design and other factors, it typically takes seven months to ten months to complete.

The building process involves several key milestones:

  • Design and planning
  • Permitting and building site preparation
  • Foundation and framing
  • Mechanical rough-ins (electrical, plumbing, HVAC)
  • Insulation and drywall
  • Interior and exterior finishes
  • Final inspections and move-in

However, many variables can impact this timeline. Weather delays, permit backlogs, material shortages, and change orders can all extend the process. Your builder should provide you with a detailed schedule and keep you updated on progress and any delays.

Financing Your Custom Home

Financing a custom home differs from securing a traditional mortgage for an existing property. With a traditional mortgage, the lender uses the home as collateral. With a custom build, you'll typically need two types of loans — one for the construction phase and one for the permanent mortgage.

Construction loans cover the costs to build the home, while the mortgage pays off the construction loan.

The main types of custom home financing options include:

  • Construction-to-permanent loan: The most common type of construction loan starts as a construction loan and converts to a permanent mortgage after the home is complete, all with just one closing process. Rates are typically locked in at closing.
  • Construction-only loan: A short-term loan covers the construction cost but must be paid off in full once the home is complete. A second closing process is required to secure the permanent mortgage.
  • Owner-builder loan: If you are building your own house and acting as your general contractor, these loans can combine both construction and mortgage but require the borrower to take on all the manager's responsibilities and risks.

Getting approval for a custom home loan requires more paperwork than a traditional mortgage. You'll need to provide detailed plans, specs, and a budget for the build. The more buttoned up these elements are, the smoother the financing process.

Some tips for loan financing success:

  • Get pre-qualified early to understand your budget before falling in love with plans outside your range.
  • Provide as much detail as possible on the construction plans and costs.
  • Choose a lender experienced with custom construction loans and ask lots of questions.
  • Understand the appraisal process, as the finished home must be appraised for the total loan amount.

Budget Beyond the Basics

One of the most common pitfalls in custom home building is failing to budget for all the costs involved. It's not just about the construction itself — the total cost includes many other expenses:

  • Land costs
  • Site preparation (excavation, utilities, etc.)
  • Permit and impact fees
  • Interior finishes and fixtures
  • Appliances
  • Landscaping
  • Window treatments
  • Utility hookups

Where finishes and features are concerned, balance your splurges and savings. Invest in the items most important to you, but be willing to compromise in other areas to stay on budget. Your builder can help guide you on where to spend and where to save.

The builder should provide a detailed breakdown of all the costs involved. At Schumacher Homes, we use FrontDoor, our one-of-a-kind pricing system, to provide itemized pricing for everything included in your custom home.

Location Matters

Choosing the right location for your custom home is as important as the design itself. When evaluating potential neighborhoods, consider both the current state and future prospects. Is the area up-and-coming with planned developments and amenities? Or is it already established with limited room for growth?

Proximity to work, schools, shopping, dining, and entertainment are also key factors. Consider your daily commute and the conveniences you want nearby.

Don't forget to research zoning laws and building restrictions in the area. Some neighborhoods may have strict guidelines on architectural styles, square footage, or even paint colors.

When it comes to the lot itself, assess the features carefully. Is the slope suitable for your preferred layout? What soil type does it have, and how will that impact construction? Are there any views you want to capitalize on or any that could be obstructed in the future?

Research Builders

Businesses in the custom home construction industry differ in quality and expertise. You must do your due diligence. Start by researching builders in your area and reviewing their portfolios. Look for experience in the style and scale of the home you want to build.

Visit the builders' current job sites or model homes to assess the quality of their work firsthand. Arrange meetings to get a feel for their communication style and process.

Some key questions to ask potential builders:

  • How long have you been building custom homes?
  • Do you have model homes to tour?
  • How do you handle change orders and budget modifications?
  • Can we customize our new home's floor plan?
  • What's included in the base price?
  • What kind of warranty do you offer?
  • How often will I receive updates on the project?

You can find answers to these questions and more in our Custom Home Building FAQs.

Visit Model Homes and Design Studios

Visiting a model home allows you to walk through the spaces, visualize how you would live in them, and refine your wish list. It's a helpful exercise whether you are at the beginning stages of planning or finalizing decisions.

At Schumacher Homes, you'll visit one of our Design Studios in addition to fully furnished model homes. Design studios offer a one-stop shopping experience, with all selections and finishes available to customize your home in one place. From plumbing fixtures to flooring to lighting, you can see and touch the materials to help inform your decisions.

Communication is Key

Building a custom home involves many players: the builder, contractors, designers, and you, the homeowner. Clear communication among all parties is essential for a smooth process and successful outcome.

Establish expectations with your builder on communication methods, frequency, and key contacts from the outset. Will you have regular in-person meetings, phone calls, or email updates? How often will you receive progress reports? Who is your go-to for questions or issues?

Be sure to document discussions and decisions in writing. Follow up verbal conversations with an email reiterating your understanding. Keep organized records of plans, contracts, change orders, material selections, etc.

At Schumacher, your Construction Manager serves as your main point of contact throughout the construction process, providing frequent updates and being available to answer any question you may have throughout the construction process.

Flexibility in Design

While you may have a strong vision for your custom home, you should remain open to professional suggestions. Your builder and designer have valuable insights and experience.

There will likely be some give-and-take to balance personal preferences with practicalities like budget, structural integrity, or building codes. Trust your team's expertise, but don't hesitate to advocate for your must-haves.

Future-Proof Your Home

Building a custom home is an investment in your current and future needs. As you design, consider how your lifestyle may change over the years.

Will you be aging in place? Incorporate universal design principles like zero-threshold showers, wide doorways, and lever door handles. Planning for a family? Include flexible spaces like a bonus room that can serve as a playroom now and a teen hangout later.

Look for opportunities to incorporate technology infrastructure, even if you may not need extensive smart home features now. Include conduit and wiring for future solar panels, electric vehicle charging, or a backup generator.

When selecting finishes and fixtures, opt for timeless styles and durable materials. Consider your plans for the home long-term. Are you building your forever house, or do you intend to sell it down the road? This may influence some of your decisions.

Understand the Contract

Before construction begins, you'll sign a contract with your builder outlining all the project details, terms, and conditions. For many homeowners, this can be an overwhelming document. However, it's critical that you thoroughly read and understand all the details.

Key items to review in your contract:

  • Scope of work: What is included and what is not?
  • Plans and specifications: Are the correct versions attached?
  • Timeline: When will the project begin, and what is the estimated completion date?
  • Payment schedule: What are the payment milestones and methods?
  • Change orders: What are the payment milestones and methods?
  • Warranty: What is covered, for how long, and what are the exclusions?
  • Dispute resolution: What happens if conflicts arise?

Don't hesitate to request clarification on aspects you don't understand. Have a real estate attorney review the contract as well. At Schumacher Homes, we strive to make our contracts as clear and fair as possible so you can confidently move forward.

Building a Custom Home with Schumacher Homes

Schumacher Homes Design Studio

Building a custom home is a big undertaking. But by arming yourself with knowledge, planning carefully, and partnering with a trusted builder like Schumacher Homes, you can confidently navigate the journey.

Contact us today to learn more about our custom home-building services and take the first step toward building your own custom home and creating the living space of your dreams.