Vol 3, Num 7 :: 2004.03.26 — 2004.04.08
I would like to address the steps that I went through in building our home, a 3800 sq. ft. home with a full basement, set into the side of a hill. Although we’ve remodeled several homes, I am only going to be concerned with new construction here.
The first thing that needs to be done is to acquire the land. This could be a gift, or you may need to purchase the lot. Develop a description of what you want. This may be predicated on the style of home you want to build, although my experience is that you can take about any piece of property and fit your “dream” house to it. Include in your description the lot size; wooded, stream, river or lake; and any other features you can think of, including maximum price. Circulate this description to every realtor in the area, post at grocery stores, building centers and your workplace. You may also want to talk to your banker, as banks frequently know about parcels that realtors aren’t aware of.
Once you find a parcel, obtain a copy of zoning regulations from the township supervisor where the property is located. This is the time—before you buy—to find out if your proposed house will meet zoning ordinances. Banks, as a rule, will not loan on “unimproved” property unless you have a hefty down payment, but it doesn’t hurt to ask around. You will probably have to finance on a land contract. The rate on a land contract will be about 2-3 % above a conventional building loan. Negotiate the lowest monthly payment possible to free up cash for building, and make sure there are no penalties for paying off the loan early. You will want to obtain a conventional mortgage once you have built sufficient equity into your home. This loan will be at a lower rate than the land contract, and a portion of it will be used to pay off the land contract.
Designing and acquiring building skills
This phase may take 1-3 years. If you happen to be in the building trades, you have a huge jump on the rest of us. If not, you will need to learn these skills, and more importantly, find a mentor or mentors for resources and opinions. With patience and desire, most fundamental building skills can be readily learned. You will probably never be as fast as a pro (that’s why they’re pros), but you should know how to do it right. House building is nothing more than a series of integrated building projects.
One way to gain skills is to build a small storage building on your newly acquired land. Incorporate, on a small scale, many of the same features you will have in a full size home. Include inside walls, inside doors, windows, wiring, maybe even a skylight. This is more than an exercise, so make this building serve a purpose, such as lawn and garden storage or a workshop.
In designing your new home, include what you want; cost considerations can come later. Get input from all family members no matter how young or old. You want them to take ownership because you will need their help or, at least support, when the actual building process begins. Again, at this point, don’t worry about cost. Remember, a $200,000 home can be built for 40-60% LESS, depending on how much you do (sweat equity). Just like a vacation, planning and designing a house is half the fun of getting there (some say it’s the only fun!) Learn what’s available in current building technology and design. Walk through building centers and lumber yards, and talk to salespeople. Visit open houses, and drive around to look for what you like. Read, read, read, and design within your skill level.
Creating a bill of materials (BOM)
There are some neat software packages available that, once you’ve digitized your house plans, will automatically extrapolate your material requirements. I have not used these myself, so I would recommend you talk to people who have used them to determine how functional they are. In fact, you may even be able to borrow the use of one of those programs. I am innately suspicious of anything that seems too easy, so apply a good dose of common sense to the resulting material list and manually calculate any item that looks out of line.
By the time you get to the point of calculating BOM, you should be intimate enough with your design that spotting discrepancies will be easier than you think. A huge plus in building your own home is being able to make changes as you go, without incurring extra charges. With a contractor-built house, “change orders” generally come with a steep up-charge.
The BOM will help you identify those items that may be out of your price range or add significantly to the material cost. This is where you need to take advantage of bargains that you find at estate sales, garage sales, the internet, or that you may encounter just driving down the road. When we were building our current home, we found windows, doors, skylights, a fireplace, and sliding doors that saved us thousands of dollars. These were either new or of a better quality than in the original BOM.
A caveat on making changes: don’t be impulsive. Make sure any changes improve your final product. The more time you spend in the planning stages of your project, the greater will be your resources to solve those inevitable “How do we do this?” situations that will arise. Do be creative. Don’t be afraid of questioning conventional building techniques, as long as it does not compromise your final product. Conventional practices have evolved over time because they work and are efficient. Efficiency may not always give you the best results. Let me give you one example. One of the goals in building our current home was to make it energy efficient. The thinking today is to upgrade exterior construction from 2×4 to 2×6 to allow two more inches of insulation. We decided that a double 2×4 wall with the studs staggered and all wiring and plumbing run through the inside 2×4 wall would create not 6" but 8" of insulation with the added bonus of the outside 2×4 wall having insulation not interrupted by electrical receptacles (which create energy loss pathways). It turned out that the material cost was about equal to the 2×6 version because 2×4′s are so much less expensive than 2×6′s. Of course the additional labor required to construct double 2×4 walls was enormous, especially in window and door framing. Conventional thinking would tell you that this is not a cost effective technique with a contractor-built home. But your labor is free! An additional dividend was extra-wide windowsills that accommodated plants.
Getting permits and inspections
In all but the most outback areas, permits will be required for well, septic, electrical, plumbing, and general (or occupancy) authorization. If you are located close to water, an excavating permit may also be required. Zoning ordinances, which you will already have a copy of from step 1, will govern setbacks from property lines, square footage of dwelling, roof height, attached and unattached garages, and possibly more. If a homeowner’s association exists, there will be even more mandates, sometimes bordering on non-sensical or un-enforcible.
Building inspectors can be your greatest ally or worst nightmare. Inspectors usually come from the building trades and are charged with enforcing standards that have been developed over years. These standards are designed to insure a safe and functional living unit. Inspectors can be a wealth of information, so get to know them. Don’t hesitate to ask questions in advance. It can save you many hours and cost of having to re-do something. Keep in mind that there may be a fee everytime you call an inspector to the building site. However, if you can handle your questions with a phone call, there is usually no charge. Before calling for an on-site inspection, this is a good time to utilize a third-party mentor to review your craftsmanship. Pay attention to details, and keep a reasonably organized worksite. Inspectors can spot sloppy workmanship a mile away, and are not impressed with it.
Some final thoughts
Don’t live in your house until it’s done. Fortunately, most township ordinances won’t let you do that anyway. But, even if they do, it creates too much tension. I caution strongly against it. Focus on your project, and do something every day on it. Whatever you can keep in your mind, on a daily basis, you can accomplish.
It took us 5 years of building before we were able to move in. However, it was a good thing that the speed of my building skills never outstripped our financial resources to buy materials. This was true until the end of the project required substantial outlays for carpet, cabinets and appliances. This is a good point to secure a mortgage. You will have built enough equity that you should have no problem getting a loan that will cover those big ticket items and pay off your land contract. Again, make sure your loan allows early pay-off without penalty. Make extra payments whenever possible and you will be debt-free sooner than you might think. Believe me, that’s a great feeling!
Recognize when you need a break from your building passion—when you need to step back and re-charge your enthusiasm. This might be the time when your family can be the most help. It won’t be an easy project, but it is so, so satisfying.