We spend more time than ever in our homes. We raise our families, entertain our friends, and now we even work from home. So it makes sense that we want the place we live to meet our needs as perfectly as possible. Every square foot of countertop, floor tile, and drywall should thrill you to look at and mesh with your lifestyle. The only way to get exactly what you need is to build it yourself.
But how do you start building a custom home that fits you? How do you plan for all that’s involved? Before you go out and hire an interior designer, you need to understand the building process of your new home. In this short guide, we’ll explain what you need to know about how to start building a custom home, so you can get from daydreaming all the way to move-in day.
How to Start Building a Custom Home
The custom home-building process isn’t easy, but the rewards are always worth it.
The first step is setting your expectations. There will be delays and things that seem to make no sense. There will be red tape, unexpected costs, and days where it feels like nothing is getting done. This is all part of the process. There are a lot of moving parts to get this done, but rest assured, it will get done.
Let’s Talk Time Frame
When we think about how to start building a custom home, the first concerns are usually how long it’s going to take and what it's going to cost. Let’s start with the time frame.
Building a house takes considerably more time than just buying one that’s move-in ready. Construction will take several months and you’ll also need time to find your team, get financing, procure a piece of land, get permits, and design the new house of your dreams.
All in all, you should expect the process to take about a year from start to finish, though this can be shortened if you bring in a partner who knows the ins and outs of the process. This is why we recommend coming to DEN Outdoors or hiring a home builder early on. Not only can we save you from costly mistakes but we can guide you step-by-step and save you precious time.
How Much Does Building a Custom Home Cost?
There are so many advantages to building your own home but those perks aren’t free. On average, it will cost about 15-30% more to build a custom house than to buy an existing structure.
According to top construction cost research firm Gordian, the national average to build a home is $244.50 per square foot of house. This includes everything from the foundation and finishes to the fees and landscaping.
At DEN, we sell fully customizable house plans designed to save you time and money. Our designs are proven and we even make sure the high-quality materials needed for your build are easy to get without costly special orders. Our detailed 3D house plans ensure your builder will see every detail at a glance, which will save you from surprises and delays.
While we recommend using the $244.50 per square foot national average for budgeting purposes, based on our customer experience, the average cost for a DEN home has been $153 per square foot. This is a savings of about 37% on your biggest expense.
How Do You Finance Your Custom Build?
When you buy an existing home, you get a mortgage. A mortgage is a secured loan backed by the house you’re buying. If you default on the loan, the bank can resell the house to satisfy the loan. This security allows the bank to charge a lower interest rate and be a bit more lenient with your credit score.
When it comes to custom home building, financing your construction works a little differently. There’s nothing to back the mortgage since the house doesn’t exist yet. Instead of a mortgage, you need to secure a construction loan. As you can imagine, this unsecured loan is a bit harder to get and comes with a higher interest rate than a mortgage.
Construction loans usually have a term of one year and are interest-only loans. This means you won’t be paying off the loan but instead just paying the interest on it while your house is being built.
During the course of the loan, the bank will check in regularly to make sure everything is going to plan. Assuming it's all good, they’ll release the funds directly to your builder or contractor, who will make sure the money is used in the exact way the bank expects.
At the end of the year, once the house is built, the bank will roll the construction loan into a proper mortgage.
Hiring Your Team
Once you have a house plan and a grasp on your funding, it's time to hire your team. But who does what, and who do you hire first?
There are a lot of people involved in building a house and sometimes it's hard to keep them all straight. Here’s a few of the main characters and what they do.
When determining how to start building a custom home, the home builder is the center of everything. As the name suggests, the builder is the one who builds your home. After buying your house plan, the builder should be the first addition to your team. Builders can help you make key early decisions like what piece of land to buy. They can also help you develop the rest of your team.
Getting a home builder early allows you to avoid common pitfalls and gives you access to their valuable networks. Here are a few tips to help you find the right builder for your new home:
- Ask family and friends for their personal recommendations.
- Check out the National Association of Home Builders or your local equivalent organization to find information on builders around you.
- Call the references of your prospects and check to see if they’re involved in any lawsuits. Finding out you're with a bad home builder midway through the project can be very expensive.
An architect designs your home. They protect your vision and make sure what you want wins out, even if it's a little more expensive. If you buy a house plan from DEN, our team of architects will work with you to customize your plans as needed. But you can also take our designs to your own preferred architect to make customizations.
Most home builders have architects they know and are comfortable working with, but if you have an architect your heart is set on, you can get the design first and then shop builders. It might cost you a bit more, but you want to be sure your custom home meets your expectations.
The lender finances the build. Usually before they give you any money, they want to see the blueprints and know that you have a real plan that’s been approved by a builder. Remember, this is a construction loan, which is a little harder to get. Make sure your credit score, down payment, and budget are in order.
Often, a builder can assist you with finding a lender they already have a relationship with.
After the floor plans are drawn up, you’re going to need a place to make your new home construction come to life. This is where the realtor comes in. Real estate agents know about land you might overlook. Where you build isn’t only about location. Slopes, bedrock, problems with soil, and zoning can all complicate your project. The right realtor can open up options for you and help the build stay out of trouble. If you don’t know the right real estate agent, ask your builder.
The lawyer is the only member of your team you don’t want to rely on the builder for. Building a house is a big, expensive job and you want things spelled out if ever anything goes wrong. While you want to have a positive relationship with your builder, it’s also important to protect yourself and your finances in case of any unexpected problems with your home construction.
You want a competent lawyer to draw up, amend, or review the contract you enter into with the home builder. These contracts are usually pretty standard.
Hiring a team of professionals might seem like a pricey choice. But unless you have the experience doing this yourself, most people find hiring a competent team is actually a cost saver.
How to Make Design Decisions for Your New Home
As the soon-to-be homeowner, only you know what you want in your new custom home design. Understanding your needs will help you decide how to start building a custom home, but what are some of the questions you should be considering?
Here are a few guiding questions to help you sort out your design process.
What’s the Purpose of This Home?
Is it your main residence? A vacation home? A getaway spot to nourish your creative work? Determining the purpose of your new home will guide your construction process and design choices. If it’s a rental property, for example, comfort and personality may take a backseat to a striking exterior and desirable amenities that will keep you booked.
How Big Is Your Family?
Is your family going to stay this size for a while? Are you expecting more children, or are your kids leaving the nest soon? Do you get a lot of visitors who you can’t bear to send to a hotel? What’s that mean for your bedroom, bathroom, and living space needs?
Are You Working From Home?
Does someone in your household work from home or expect to in the future? The side hustle you’re doing from your kitchen table counts. Do you need an office for that? If so, do you want that office attached to your house or would a satellite building in the yard create a better work-life balance at home?
What Type of Climate Is the House In?
WIll it be in a winter wonderland, where you’ll need more space to weather the chill? Or will your new home be in a more temperate area, so you can do with a little less house and a little more yard?
What’s Your Style?
What Are Your Non-Negotiables?
Do you cook a lot and have special requirements for your kitchen? What about closets for storage or a workshop in the garage if you’re a tinkerer? Have you been dreaming of a study or at-home library? Which room or feature is the star attraction to you?
The more questions like this you can answer, the easier it is to nail down your vision. You want to know what your non-negotiables are going in.
Before you break ground on your dream home, you want to make as many decisions as you can. Making change orders mid-build or debating the color of the paint while a team of high-priced skilled laborers are on the clock can cost you time and money.
You Can Build a Custom Home With DEN
Good things come to those who are willing to put in a little bit more effort, and building a custom home certainly takes effort. It will pay off though. Living in a space designed specifically to fit your lifestyle and taste will be worth the added time and cost.
While learning how to start building a custom home isn’t easy, you don’t have to know everything to get started. At DEN, we don’t just sell you a plan. We give you everything you need to get started, including a full materials list and checklists to help you find a great builder in your area.Check out our library of house plans and then work with our talented architects to make it your own.