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Things to know before start building your dream house

Updated: Aug 5, 2019

Most home buying advice is aimed at people who are buying an existing home. But what if you're in the market for a new construction house or condo?


Buying a newly built home provides some exciting options that may not be available to you when purchasing an existing home, such as the ability to choose the exact kitchen cabinets, flooring and even floor plan you want.


But it also creates some additional challenges, including making sure your builder is reputable, the community is sound and your home will be ready when you are.


Before You Start

Buy the Property

Choose square footage and location over upgrades

Make the Plans

Understand your floor plan

Ask about warranties

Can You Afford to Build a House?



House Savings

Before You Start

Since the seller typically pays the commission, it costs a buyer nothing to be represented by a real estate agent, and many builders are happy to work with agents. An agent who regularly deals with builders and knows the local communities will provide lots of helpful information.

A good agent will know where to find up-and-coming areas so you can plant roots in a spot that’ll make your home more valuable over time, which is what you want!


Choose square footage and location over upgrades


Think about how you want to spend your limited budget. You can never change your home's location, for example, but you can upgrade flooring later. Apply that logic to other choices as well. If you're choosing between a fourth bedroom and granite counter tops, you probably should choose the extra bedroom, which is much more expensive to add later. "In that first house that you buy, buy as much as you can, but don't do the upgrades. I'd go for locale. I'd go for square footage," says Scott McMillin, chairman of the board of Corky McMillin, a homebuilding company started by his father, and chairman of Better Homes and Gardens Real Estate McMillin Realty.


Make the Plans

Now, once you’ve found that lovely plot of land, get ready to make a lot of decisions! In each phase of construction you’ll make dozens of choices that affect the cost to build your house! You’ll need to start off with a well-planned, detailed vision of the home you want. And we don’t just mean the number of rooms and finishes. If you don’t decide on your budget, you’ll end up making a ton of change orders.

Change orders are work items that need to be added or removed from the original set of plans. They’ll send your budget through the roof and drive your builder crazy! (Don’t do this, people!)

To help you prepare for the decisions you’ll have to make at each stage of the home-building process, we’ve broken down the typical costs to build a home into separate stages, beginning with site work and moving all the way to landscaping—and even the final sales price. While we can’t read your mind and predict how much it will cost to build the house you have in mind, we can show you what costs to expect and when. Let’s dive in!


Understand your floor plan


Most floor plans include room sizes, and if you don't understand those, take a measuring tape to your current home. Many builders offer virtual reality technology that lets you see what's going to be built, but a better option is to visit a home with the floor plan you want, even if it's still under construction or in a different community. "Nine out of 10 times, people want to physically walk a home," Wilhelm says.


Ask about warranties


Most builders offer warranties on materials and workmanship. Pulte and its companies Centex and Del Webb, for example, offer a one-year warranty on workmanship, a two-year warranty on mechanical and electrical elements, five years on water leaks and 10 years on structure. Make sure you understand what is and isn't covered and what process you need to follow to get something fixed.



House under construction

Can You Afford to Build a House?


If your budget allows you to pay cash to build a house, congratulations! You’re a rock star. The only other costs you’ll have to consider are property taxes, homeowner’s insurance, and, if your development is part of an HOA, other ongoing fees.

If paying cash to build your house isn’t realistic for your timeline, make sure you know how much house you can afford to build. Don’t build a house with any type of mortgage besides a 15-year fixed-rate conventional mortgage with payments that are no more than a fourth of your take-home pay (including property taxes and insurance)!


Ready to Build a House?


Building a house is a huge undertaking! Start this project with an experienced expert who knows the process. Don’t know where to find one? AEC Moreno can help during the construction process and clarify all the questions into the process.



New House Keys

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