While it’s no small feat, designing your dream home is an incredible opportunity to create a home that fits your needs, design style and wish list. Here’s what you need to know as you start down the path toward designing your unique dream home.
1. Set a realistic budget
Every home build has a budget — regardless of how many zeroes are in it. Setting a budget for your custom home build may not be the most exciting part of the process, but it’s an important first step. How much you’ll spend on a custom home depends a lot on where you live. The cost of land varies dramatically across the country, as does the cost of labor. Materials costs fluctuate based on market conditions, too. How big a home you plan to build will, of course, impact your costs, as will the quality level of interior finishes. It can be helpful to reach out to a few custom home builders in your area to get a feel for building costs (you’ll find more about assembling your team in the next section). Builders will usually provide an average cost per square foot, allowing you to estimate your costs based on the size of the home. They may also provide a range depending on the level of interior and exterior finishes. Across the country, typical homes cost an average of $150 per square foot, while luxury homes can reach $500 per square foot (according to Forbes Home as of January 2023). These numbers don’t include the cost of the lot. As you set your budget, it’s important to include some padding. It’s not uncommon for custom home projects to go over budget, either because you decide to make on-the-fly upgrades along the way or you run into unforeseen issues. It’s also fairly common for builds to take longer than expected, which can mean carrying costs like interest payments and extra housing expenses.
2. Assemble your team
You’ll rely on several types of professionals when you set out to build a custom home — the most important being your home builder. If you don’t already have a builder in mind, ask around for references. If you already have a real estate agent lined up for help purchasing a lot, they can usually help you with referrals for reputable builders.It’s important to interview a few builders before choosing one. In addition to making sure they fit within your budget, confirm that they’re licensed, bonded and insured. You’ll also want to ask about their process, timelines, experience and communication. Finally, be sure the style of the homes they build aligns with your tastes. Depending on how the builder you choose approaches the build, you may also need to hire an architect. A real estate agent, real estate attorney and landscape architect will round out your team.
3. Line up financing
Unless you’re paying for your custom home in cash, you’ll need to line up financing to help bring your plans to life. Getting financing for a custom home build can be trickier than just getting approved for your typical mortgage on an existing home. You'll come across two different types of loans: land loans and construction loans. Land loans obviously help you pay for your lot, while construction loans are a short-term financing option that covers your build costs. You can pay for your lot with a construction loan as needed. With a construction loan, once your build is finished, you’ll apply for a traditional mortgage. Some construction loans have a feature that allows them to convert into a mortgage when your home is complete. These are called construction-to-permanent loans. One important thing to know about both land loans and construction loans is that lenders consider them riskier than traditional mortgage loans. This is because there’s no finished home to use as collateral. You’ll need an excellent credit history and a sizable down payment to get approved. You also may need to shop around with multiple lenders to find the right loan product. A mortgage broker can be a helpful resource during this process.
4. Make your wish list
Make a list of all the things you’d love to have in your new home — it’s your dream home, after all! Start with a pie-in-the-sky list that includes not only the basics like square footage and number of beds and baths, but also specific features that fit your lifestyle. Maybe that’s an outdoor kitchen for weekend family barbecues. If you’re a movie lover, it could be a state-of-the-art home theater. Food lovers might be dreaming of the ultimate chef’s kitchen. Some items on your wish list might be convenience-focused, like an upstairs laundry, a three-car garage or an in-ground sprinkler system. For most people, the wish list gets long pretty quickly. Your next step should be prioritizing needs versus wants, then rank your list. If you’re building a home with a partner or family members, make this a collaborative process. In every home build, concessions will have to be made as the build progresses, so it’s nice to have a cheat sheet with what matters most to you. An example of a need would be a main floor primary suite if you have accessibility needs. However, a want might be a kitchen with enough space for a double island. It would be great to have, but may not end up fitting within your budget or floor plan.
5. Gather inspiration
It’s time to start gathering design inspiration for your dream home. First things first: What architectural style appeals to you? Some of the most common home styles include Colonial, Modern, Mid-Century Modern, Craftsman, Tudor, Ranch and Farmhouse. After you’ve decided on an overall architecture type, start honing in on your style. There are a lot of ways to do this. You can create Pinterest boards, perhaps making a different board for each major area of the home. Or, you can take photos of design elements you like as you’re out and about: paint colors, landscape elements, and decor items in stores or in the homes of friends and family. Digging through a stack of design and architecture magazines may spark some ideas as well.No matter your method, having visual examples is incredibly valuable for your builder and architect as they can more easily see the aesthetic you gravitate towards and make recommendations on materials and layouts.
6. Pick out the perfect lot
You might think picking out a lot should come earlier in the process, but it’s helpful to have your contractor picked out and a wish list made before selecting a lot. There are a couple of reasons why. First, your contractor will be able to spot challenges in potential lots that may not be immediately apparent to the average homebuyer. Perhaps the topography would make excavation costs exorbitant, or your plans for a basement not feasible. Second, it’s best to have an idea of the style and size of the home you’re interested in, so you can get a big enough lot.
7. Make a timeline
It can take between six and nine months (or longer) or a builder to complete a custom home, assuming everything goes smoothly and there are no delays in permitting, materials or inspections — plus, the weather cooperates. While your builder will be responsible for managing the construction timeline, it can be helpful to make your own timeline for related tasks you’ll be responsible for. This can include things like financing milestones, moving schedules and anything related to selling your previous home, if that applies to you.
8. Focus on communication
It’s important to choose a builder with solid communication skills. Although the build process can be long, you should receive regular updates from your contractor about how the project is progressing. Communication is a two-way street, so you should also do your best to respond quickly when your builder reaches out with questions or needs you to make a decision. Keeping the lines of communication open and acting decisively can help keep your project on track. The same goes for communicating with your architect, lender, real estate agent and any other vendors working on your project.
9. Be patient
Dream homes aren’t built overnight, and quality craftsmanship takes time, so it’s important to be patient. This is especially true as you get closer to completion. The finishing touches are key to being satisfied with your new home. You’ll do several walk-throughs with your builder and create a punch list of items that need to be repaired or issues that need to be resolved before the project is considered complete. Don’t rush these steps — they’re important to ensuring you get the full value of your build.
10. Move in!
It’s a long journey from deciding you want to build a custom home to unlocking the front door for the first time, but good things are worth waiting for. Take some time to savor the feeling of wandering through your new construction dream home. Don’t forget to take pictures and videos! Then, get to work moving in and making your house a home. Congratulations!
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