How to Face the Challenges of Building a New Home – and Survive the Process
Imagine the excitement of planning your new home. In your mind, all the details are there – whether it’s a quaint cottage with a landscaped courtyard entrance surrounded by a white fence or a very modern contemporary home with great views. You have it all figured out – from the lot to the style, exterior and interior finishes, number of bedrooms, bathrooms, fixtures, furnishings, paint color down to the accents, and other décor touches.
What can possibly go wrong? It looks like a perfect blueprint. But you’ll be surprised at how many things can go awry if just one detail in the planning process is neglected.
This rendering of a sprawling 1-story, 4-bedroom, 3.5-bath Cottage style home depicts a very attractive and well-designed plan (Plan #178-1376).
Let’s look at several disastrous mistakes you can make when you build a house – and how you can avoid them.
1. Inadequate Overall Planning
Before you start construction, be certain that you’ve looked at all the angles and checked off all your boxes. Ask yourself a lot of questions.
• Will this be a starter home or a “forever” home to be kept in the family for generations?
• If you’re a young couple, are you considering a family and how big of a family do you have in mind? The size of the future family definitely affects the number of bedrooms, bathrooms and flex space in the new home.
• Consider your lifestyle. Do you entertain a lot? Will you need a big open floor kitchen concept to accommodate your social/hosting activities? Do you have relatives or guests who visit often and stay overnight? That means a guest suite or a bonus room has to figure in your design.
• If you foresee yourself spending your senior years in this home, you have to plan for safety and convenience features – like a main floor master suite and laundry room, a one-story rather than a two-story home.
• Do you work from home? Think about office space that offers both privacy and at the same time opens up to the entire home.
• What about outdoor features? Do you want a porch, sundeck, rear patio, and a big yard for a garden and landscaping?
• What about insurance? Don’t put the homeowners insurance policy off until your home is complete. Having insurance coverage while the house structure is being built protects you from hefty out-of-pocket costs in cases of property damage, theft, and personal liability. Licensed contractors will have their own insurance, but homeowners insurance protects you and your property specifically. Without this coverage, you may find yourself responsible for paying the full cost to replace stolen building materials or even a lawsuit if someone is injured while visiting your property.
Remember that it’s important to think ahead and discuss near-term and long-term future plans with family prior to finalizing design and construction on new build homes.
2. Immediately Taking the Lowest Bid
Experts advise potential homeowners to learn how to read and compare bids. Knowing that a majority of home builders use several methods for their bids will guide you in your decisions. Learn about these methods and don’t forget to ask questions:
Square foot pricing is least reliable because it only assigns an average price to each square foot of the space but does not take into account specific costs of materials
Assembly pricing is more accurate and detailed and is based on the cost of each component instead of just the average price
Unit pricing is the most accurate method, but it’s a time-consuming, detailed process based on the cost of all the supplies needed
In addition, find out how unexpected expenses are accounted for – and if the contractor includes a “buffer” for costs that cover delays, additional materials, and other unexpected issues that may come up during the building process. There may for example, be a price hike in the cost of materials, regional trends that affect labor costs, or weather damage.
Being aware that certain issues may arise during the building process will help you determine your costs more accurately. It will also give you a sense of mortgage costs and the length of the building process.
3. Taking on the Home as a DIY project
You may be a big-time proponent of “Do-it-yourself” projects; however, this is one time you should rely on experts. Think seriously about working with contractors and builders for your dream home – because in the long run, they may save you money due to their experience in how to build a house. There are several tasks that a good contractor and builder can facilitate for you to help you get your dream home built on schedule and within budget.
• Review plans for potential problems
• Estimate cost of materials and labor
• Obtain permits
• Hire and schedule employees and subcontractors
• Order materials and schedule deliveries
• Keep the building process on schedule and help manage delays due to weather conditions and other construction hurdles
While contractors and home builders can make recommendations, this is still your dream home and design – so it should reflect your lifestyle needs and preferences. Discuss your vision prior to construction; give your builder a sense of direction; and without micro-managing, be aware of what is going on and ask your builder to apprise you of progress and unforeseen circumstances and delays.
4. Failure to Review Contracts Carefully
Today, most contractors provide their clients with an agreement with all the details of the project and the schedule. Always read contracts very carefully before signing anything.
Not many homeowners realize that they may be legally responsible for supplier and subcontractor payments. While the general contractor handles hiring subcontractors and the purchase and delivery of the raw materials needed to build your house plan, you can be on the hook and a lien can be put on your property if the contractor doesn’t pay the bills. To protect against this, include a clause in your contract with the general contractor requiring that a lien waiver be collected from each vendor and subcontractor for every payment made. Make having lien waivers for every payment, supplier, vendor, and contractor used on the project a contractual stipulation for signing off on project completion and final payment to your general contractor.
If you’re not comfortable with the process – or have a difficult time with legal documents – it is advisable to hire a lawyer who can write a contract or review one prior to construction. The contract should include delivery dates and cost projections that will not hold you accountable for delays and added costs.
5. Not Watching What You Spend
Even if you have set aside a huge budget to construct your dream home, you have to keep it in check for any unexpected costs and changes in the middle of the building process.
• Manage your mortgage costs. At the outset, you have to decide on the size of the home, design/style, and materials. For example, a well-designed 2,500-square-foot home with all the amenities and special features that meets your family’s needs and lifestyle will have a lower mortgage than a 4,000-square-foot home with under-utilized rooms.
Because this is a custom-built home, rather than a tract or development home or a resale, think of looking for a mortgage from companies that specialize in these kinds of homes. Like mortgages for a pre-built residence, you can also shop around to compare closing costs, interest rates, and whether you need to pay private mortgage insurance.
• Don’t buy big-ticket items while building your dream home. If you’ve been eyeing that new car or the modern furniture and appliances for your new home, put them off until after all the mortgage details are finalized and signed. These huge purchases change your debt-to-income ratio and affect your mortgage eligibility. This is the percentage of your gross income that is needed to pay for your non-housing expenses – and is used by lending institutions to determine your eligibility for a mortgage and how much they will lend you. The lower your ratio, the higher is the likelihood of getting a mortgage at a low interest rate.
A well-laid-out floor plan like that in this 2500-sq.-ft. Traditional style home with rustic accents may serve you as well – in terms of usable space – than a larger home that would cost you more money and a higher mortgage (Plan #196-1074). Almost all lenders want to see a debt-to-income ratio of less than 43%.
• Find areas where you can cut costs. By being clear on your home’s design, you can avoid costly changes when construction is underway. Remember that you can still have your dream kitchen, master suite and bath, and outdoor features without going overboard with your spending and unnecessary upgrades.
6. Poor Property-Lot Selection
How many HGTV shows have you watched to discover that one of the most important considerations for potential homeowners is the property’s location and proximity to amenities?
Perhaps you’re one of the fortunate ones who already own a property for your dream home. But if you’re still looking at lots, be sure not to settle for something that you may eventually regret. Once again, do some research and find out everything you can about the community. Is the property near restaurants, grocery stores, and other amenities like parks, museums, and recreation centers? How far is it from the business center, churches, hospitals, public libraries, local schools? What is the local traffic like? Are there busy intersections?
It’s always an excellent idea to find out about the local school system - even if you don’t have children. A good school system can improve the resale value of your home should you decide to go that route down the road.
You should also ask yourself if you want to be isolated from your neighbors or prefer a property that has neighbors but with enough distance to maintain privacy?
This 2-story, 4-bedroom, 5,023-sq.-ft. Shingle style home, seen from the rear, is built on a fairly huge property that allows some room for additions to the backyard. There are other houses within eyesight but far enough to maintain privacy (Plan #161-1038).
A piece of land without anything on it can look huge, but narrow or oddly shaped lots will greatly impact home design. Local zoning laws may also affect the house plan design. Easements, boundary restrictions, and other zoning codes can dramatically shrink your large lot.
Have an accurate understanding of the buildable footprint of your property; this will tell you how many square feet the base of your new home plan can be and what shape it needs to take.
Small square lots can still hold homes with plenty of square footage by choosing a compact but vertically spacious style, like a Craftsman or Cape Cod house plan; however, this land will never be home to a long, narrow Ranch style home plan. Don’t despair if your lot is narrower than you thought, though. There are plenty of house plans for small and narrow lots.
Where your lot is located will also affect whether or not you can connect to municipal utilities. If you’re building your home plan away from where the town, city, or county water and sewer lines reach, the municipality may refuse to extend service to your new home or require you to pay for the extension. If you need to install a septic system, this will further limit the possible footprint of the house plan.
Before you buy a home floor plan or set your heart on a particular style, you need to know what physically will and won’t work on your land.
7. Not Reviewing Zoning Requirements
Before you purchase a house plan, make sure it meets all local zoning requirements. Zoning codes vary based on municipality, so don’t rely on previous knowledge if you’re building in a new area. Even if a house will physically fit on your land, the home plan you’re considering might not meet zoning codes.
Common zoning restrictions include
Zoning designations – You may not be able to build a residential home plan if an area is zoned for industry or commercial use.
Setback requirements – All buildings on the property might need to be at least 50 feet from the property line, for instance.
Aesthetics – In some heavily regulated areas, your house plan may need to match a particular aesthetic, such as color scheme or height limits.
Minimum lot size – Some regulations set a required lot square footage or acreage per every one family living on the land. (This might affect you if you’re planning to build a guesthouse along with your main home plan.)
Zoning laws can also affect external structures, like garages, gazebos, septic systems, driveway cutaways, and sidewalks. While not part of zoning codes, any easements granted on your land (giving someone else a legal right to use part of your property for a specific reason) also need to be honored.
All of this may have an impact your house plan as well as the layout of your property.
8. Inefficient Planning for Space Needs
Not everyone wants – or can afford – a large home with all the space for storage and closets. Be strategic with the placement of closets in your home so that they don’t take away from the living space. The rule of thumb is one closet per bedroom and in a main hallway. In places with cooler climates, a coat closet in the entryway makes sense – to hang coats, jackets, and hats. If a mud room is in the home’s design, however, you can forget about the coat closet if you want.
Do you really need two walk-in closets in the master bedroom? Or can you use the space for a very nice sitting room or reading nook? Before you include areas like a game/play room, home gym, or crafts/hobby room, be certain that these spaces will be used all the time – or can serve dual purposes. There’s no reason why you can’t combine these areas into one space for a more efficient design. While the most common configuration is a mudroom/laundry room, you can also organize the laundry room to include a desk for work space and for small arts and crafts projects.
If you want to upgrade spaces, add more amenities, or make changes to the floor plan, talk it over with your builder/contractor before construction starts. Discussions of planned additions and makeovers prior to building your home will save you a lot of money, time, and headaches.
If you've done your homework and know that you and your spouse will need extra room as both of you try to get ready in the morning, then plan for it from the start. This master bathroom in a 3-bedroom, 2.5-bath Country style Farmhouse has separate his and her vanities, one of which has a secondary "makeup" area, separated by a double door (Plan #142-1180).
9. Poor Room Placement
When you work on the design of your dream home, think about the location/placement of spaces like the kitchen, bedrooms, laundry room, and garage.
• Kitchen – You don’t want to carry groceries, packages, and other stuff all over the house before you can drop them down in the kitchen area. It’s advisable to locate your kitchen where you can have access to it from the garage, the mudroom, and/or the rear porch.
In this floor plan of a 2-story, 4-bedroom, 3.5-bath Country style home, you can park your car in the garage, then go through the mudroom and right into the kitchen, where you can drop off groceries and other packages (Plan #189-1016).
• Bedrooms should be as far as possible from all the activities that create noise and a lot of traffic within the home. In a one-story home, it’s best to have a split bedroom plan where the master suite is at the other end of the home to provide additional privacy and quiet.
This floor plan of a 4-bedroom, 4.5-bath European style home shows that all of the bedrooms are on the main floor. And while the master suite and a third bedroom are on the same side of the house, the laundry room in the middle of the spaces creates more separation and distance between the bedrooms (Plan #142-1140).
• As far as the garage is concerned, experts prefer it to be close to the mudroom or the kitchen area – again, to avoid people walking through the main living areas with their backpacks, luggage, groceries, and sports paraphernalia.
10. Not Enough Light
Don’t live in the dark. There’s nothing gloomier than walking into a dark house. Install ample light fixtures in hallways, living spaces, and bedrooms. For natural sunlight, plan on windows, windows, and more windows. They make the home not only welcoming and comfortable but also very breezy and bright. Since you’re in the construction process, why not install skylights as well?
Top:This exterior photo of the rear of a 2,593-sq.-ft., 4-bedroom Contemporary style home shows the many windows and light fixtures that give the house a bright glow. Bottom: Inside the home, even at dusk, the living area is well-lit because of the light fixtures and the glass windows that surround the space. Imagine how bright and airy this living area is during the day when natural light filters in through the large windows (Plan #161-1085).
11. Overlooking the HVAC System and Ductwork
Don’t ignore ductwork sealing and installation during construction. This process can improve your HVAC and save money on energy costs.
You also have to plan well for the HVAC system to avoid health concerns surrounding moisture issues and mold. In addition, pay attention to the size of your units, and be certain that you and your contractor choose and install energy-efficient units that can cool and heat your home sufficiently in the winter and summer months.
12. Skipping a Home Inspection
Remember that last-minute changes can be very expensive. So be sure to schedule a licensed third-party inspector to make a thorough review of the home to identify any problematic issues that you can resolve before moving into the new home.
Undoubtedly, there are challenges to manage when building a dream home. With thorough preparation and planning, however, potential homeowners can take on this project and enjoy spectacular results.
Footnote: The lead image in this article is a 4-bedroom, 2.5-bath Country style home with vaulted ceilings. For more details, go to Plan #142-1188.