Building a house that will become your new home is a complex and demanding task. Designing, planning, and finally building the house of your dreams requires time, energy, devotion, and persistence. However, in order to satisfy all your needs and preferences, this endeavor can prove to be quite costly.
From your desired neighborhood to your contractor of choice, there are many decisions that need to be made. If you don’t have a plan in place and prepare accordingly, you run the risk of raising building costs and putting the construction of your new home in jeopardy.
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Do Your Due Diligence Before You Start Building Your Home
Before you embark on this exciting journey and hire a construction company, ensure you’ve done the necessary research. Doing your homework on the layout, size, and type of home will go a long way in securing the construction phase goes according to plan.
Overcome these initial hurdles by taking the time to do in-depth due diligence. Here are some of the most important questions to ask yourself (and your potential contractor) before getting started:
What is your budget?
This is probably the most important question to ask, as it will determine everything else about the project. Be realistic about what you’re willing to spend on construction, and don’t be afraid to negotiate with your contractor.
What is your timeline?
Knowing your timeline helps ensure that the project stays on schedule and avoids potential problems down the road. It provides a sense of structure and order to the project and can help keep costs down by avoiding unnecessary delays.
What are your must-haves? What features are absolutely essential to you and your family? This will help prioritize the scope of work and budget.
What is your preferred neighborhood?
There are numerous reasons why the neighborhood is important when choosing a location to build your home. The quality of life in a particular area can have a significant impact on your happiness and overall satisfaction with your home. A good neighborhood will offer a variety of amenities and activities that make life enjoyable.
Are there reputable local contractors who you can trust?
Not only do you have to be sure that the contractor is qualified and has a good reputation, but you also have to be confident that they will deliver on their promises. Check references and read online reviews to get an idea of the contractor’s quality of work. Then, schedule a meeting and get a written estimate before hiring them for the job.
What does your perfect home look like?
There’s no one single perfect style of construction for a home. However, certain features make a home more comfortable, functional, and stylish. There are endless possibilities for creating the perfect style for your home. Ultimately it all depends on your personal preferences and needs.
Plan Your Construction Budget Accordingly
Building a house tends to be more expensive than originally anticipated. With the surging costs of building materials over the last few years, financial planning is becoming more and more difficult. These contingencies can add substantial amounts of money to the costs, sometimes jeopardizing the timeline, as well as your envisaged budget.
To mitigate such occurrences, create a construction budget that will give you a better overview of expenditures. This way, you’ll get a clear sense of what you can afford, the indispensable priorities, and the non-essential elements you can discard.
Blackhawk Bank advises you to plan ahead, take protective measures and incorporate a contingency fund into your budget, which typically amounts to 10-20% of the overall funds. The building of a new house will always entail surprise expenses. While they may be difficult to predict, creating a budget and contingency funds will help you in this process.
Look for a Financial Partner Who Specializes in Construction
Building a house can be challenging without a serious financial partner by your side to help you finance the costs. Construction loans are specific as they differ from mortgage and traditional types of loans. The lender should be able and ready to follow you from the very beginning to the end of the construction process. From selecting the best piece of land and preparing for construction to the building phase and finally moving into your new home, your financial partner should be with you every step of the way.