Looking to Build a new home in the near future?, you may find it a little difficult to stay up to date with everything that goes on in the home construction process. From buying the land plots, gaining building permits and planning the architecture to actually building the home … it sure seems like it would be easy for things to get lost in translation.
That's where we come in.... The Frank Adams Home Selling Team is your guide through this sometimes confusing process.
We talked with three homebuilding professionals to ask the questions you may have in order to better serve our clients when they have the tough questions. You’ll hear from Dennis Ciani, marketing manager of Pacesetter Homes in Austin, Texas; Lee Whitaker, sales manager of Pacesetter; and Sheri Scott, owner of Scott Architecture in Dayton, Ohio. Here’s what they had to say!
Q: Where does lot development begin and end?
Ciani: Not all builders develop their own property. Many will develop some and also purchase some from other developers. Depending on the municipality, approval to develop the land can take up to a year or, in some cases, even more. Before a land plan can be submitted for approval, based on market demand, a decision is made as to what lot size to offer and amenities, if any, to include. Development is done in phases and, depending on weather, it can take about six months to produce a buildable lot.
Q: How does the builder work with a buyer to make sure they are creating the home of their dreams?
Ciani: Communication starts with their Real estate agent and the onsite sales representative to discuss what the homebuyer gets with the purchase. In most cases, the homebuyer will meet with a professional designer to help choose the colors that will go into the home. A prestart meeting with the builder and your Realtor will be held to review all paperwork including any options and upgrades the buyer may have selected and to confirm the placement of the home on the homesite. At Pacesetter Homes, once the home has started, weekly phone calls are made to provide updates on the status of the home. When the home is complete, the builder and your Realtor will conduct a homebuyer walkthrough to make sure the home meets the customer’s expectations.
Q: What is the average time it takes once a buyer decides to build with you until move-in day?
Ciani: Once a contract has been executed, then the buyer must get their loan pre-approval and colors and options selected. Then, the builder can submit for building permits. This can take anywhere between 45 and 90 days depending on the buyer’s cooperation with the lender. Once the home is released to construction, smaller homes can take between three and four additional months to build. Larger, higher-priced homes with lots of upgrades can take an additional five- to six-plus months depending on market conditions at the time the home is released to construction.
Scott: There are so many different factors, but for me, I deal in true custom residential. I ask clients to give me six months to a year to do design, construction documents, bid out to builders … all of that work takes six months to a year. Then, building averages at a year. Sometimes it’s as quick as nine months, which is really quick for a custom home, and it could be as long as 18 months, but not usually.
Q: What are some common questions homebuyers have about the home construction process that you have to answer quite frequently?
Ciani: Can I have an independent inspector review the completed home before closing? Yes, but the homebuyer will have to pay for it. Can I choose my own lender? Builders offer incentives if the buyer uses a builder’s preferred lender. The reason for this is better communication between the lender and the builder during the construction process, reducing the number of closings being delayed because the lender did not get the paperwork approved in time.
Frank: I agree, working with the builders lender is a better fit for most home buyers. The incentives, closing times and dealing with mid-build adjustments are much easier to get approved, as your Realtor receiving special incentives and a second pair of eyes during the build process helps protect your interest before they become an issue or past the point of repair.
Scott: When they come to me first, most of their questions are: What does the process look like? Who do I talk to first? How does all of this work? It’s a one-time thing for most people to build a custom home. The answer to that is to find a Realtor you trust who’s going to lead you through the process from finding a residential architect or semi-custom home builder that’s going to start that process with you.
Q: Are there any difficulties you’ve noticed about the buyers you’ve worked with or things they need to know that could be corrected with more information from a Realtor?
Ciani: Homebuyers need to understand that many factors have an effect on the building process. Weather, shortage of trades, shortage of materials, and local and national events. Depending on the size of a home, the process can take anywhere from four to eight months. Homebuyers need to plan for the unexpected.
Scott: The biggest thing is financing and appraisals [for custom homes] and to have someone that’s going to explain that entire process to them. Hopefully, the homeowner can find an expert in [the appraisal process] that’s not an architect or a builder. If you’re not going to get local comps to justify the price of the house you’re building [to an appraiser], you’re likely going to be expected to bring up to 50 percent of the home value to the closing table. A lot of buyers don’t understand that until they get to that point, after they’ve designed their dream home.That's why it's important to find a Realtor that is an expert in appraisals and in guiding people through that process up front, that would be very helpful.
Q: Does working with a Realtors help make the builders job easier?
Whitaker: Yes, We love working with Realtors, it's a benificial relationship. We both want a smooth process.
Scott: I’ve worked in projects where the Realtor was involved earily on, and this is the best for everyone, roles are established early on making for a much smoother transaction. A lot of times, if the Realtor comes in later in the process, most of the negotiation is done, the buyer misses out on valuable information and no one quite knows where they fit in. So, I think if the buyer could find a Realtor well before the buildig process begins, and establish their roles that would be really helpful.
Q: What are some facts or miscommunications builders may want Realtors to know about the home construction process?
Whitaker: There are going to be issues during the construction process. Humans build homes and humans make mistakes. They will be fixed according to a schedule, it may not be immediate or make sense, but it makes sense in the framework of a production schedule. Your Realtor can discuss or review and possiable issues and in working with the builder come up with solutions, avoiding lengthly delays.
Scott: From an architect’s standpoint, I would want homebuyers to know that they need an advocate. Their Realtor, I think that there really needs to be a third party involved through the entire process, and for a Realtor to be that third party in the beginning makes perfect sense. I think that they can really, really be an integral part of starting out that process strongly.
Q:Can you think of a small list of steps for a Realtor to provide to prospective buyers about the home construction process?
Whitaker: Contract, design, start, pre-construction meeting, foundation, frame, mechanicals, drywall, cabinets and countertops, flooring, trim out, walkthrough and close.
Q: Are there any topics or concerns we haven’t mentioned that you’d like to provide information or comments on?
Ciani: Realtors are an asset when looking at a builder’s available inventory as an extension of their own listings . In many cases, the incentives offered eclusively to a Realtor are much higher and overall a better for their home buyer.
Working with a Realtor earily on druing the home build porcess is likely going to ensure you receive better incentives, more choices and a much better experience.