Building Your Custom Home For Dummies. Peter Economy

pool, spa, and so on (see Chapter 16).

      49 Sell your old house (see Chapter 17).

      50 Move in (see Chapter 15).

Figure 1-1 shows photos taken through a number of stages to give you an idea of what a house in progress looks like.

      Courtesy of Aaron Rosenbaum

FIGURE 1-1: A house in progressive stages of construction. From site prep through foundation, framing, and exterior work, this home took more than eight months to build.

      Patience is a virtue: A true timeline for building your home

      Asking how long it takes to build a custom home from start to finish is a bit like asking the question “How long is a piece of string?” The obvious answer, of course, is “It depends.” So many factors can affect the time frame that the overall project can stretch from six months to six years. Kevin often had clients come to his office asking if they can move in by Christmas, to which he always responded, “Absolutely, as long as you don’t care which year!”

      Over the years we’ve seen patterns for the time it takes to complete each phase. The main point is to be flexible. You want to have a house you love for the rest of your life rather than years of regret because you rushed everything. Here are some typical rough timelines for the process based on Kevin’s nearly 40 years of experience:

       Land acquisition: This step depends upon the availability of land in the area you want. Land is hard to find, so pinpointing the exact time is difficult. Most of Kevin’s clients looked for land for three to nine months before finding something they liked. Purchasing the land, including the escrow and due diligence periods, can take anywhere from 30 days to six months.

       Home design and approval: This stage mostly depends on how picky you are and your financing considerations. Local government efficiencies can play a factor as well. Figure at least three months. The design and approval process requires that everything goes perfectly and you can make your choices quickly. Kevin had some projects that took more than two years to get through this phase.

       Construction: This stage covers the project’s scope and the availability of labor. You can use the construction lenders as a guide. Most lenders provide 12-month construction loans. Smaller houses or kit homes (homes where all materials are supplied as a kit, such as log homes) may go up in six to nine months. Large detailed mansions may need 18 months.

       Landscaping and move-in: This one is all up to you. After the house is complete, you can relax, although you may be required to finish landscaping in some neighborhoods within a year of completion. Most finish within six months.

Being an Owner-Builder: More Power to You!

      When you talk about building a custom home, people often assume you’re planning on pounding hammers and nails yourself. In reality, hardly anyone does the actual construction on their own custom-home project. Many people, however, do consider acting as their own general contractor. Still, doing so is such a large undertaking that less than 20 percent of all custom homes are managed by owner-builders. In many of these cases, the owner is a contractor or already has some construction experience. This factor isn’t necessary, but it can make a big difference in the ultimate success of the project.

      Even though the primary motivation for considering becoming an owner-builder may be saving money, the real issues to consider are time and management experience. This project will be one of the largest undertakings of your life, even with a contractor. Consider the following questions in exploring the owner-builder subject:

       How is my security at my current job?

       Do I have extra time and a flexible schedule?

       Can I make more money at my job with the time I spend on the home?

       Do I have a good understanding of the construction process?

       Do I have extra time to train myself on the process?

       Am I good at managing people and projects?

       Do I have a good eye for quality of construction?

       Do I have access to good resources?

       Am I good at problem solving?

       Am I good with multitasking and constant change?

       Am I well organized?

       Am I good at managing finances and budgets?

       Will my partner and kids stay with me if I mess up the project?

If you honestly answered no to any of these questions, you probably need to hire a contractor (see Chapters 2 and 7). Most owner-builders are gambling that they can do a job equal to or better than an experienced, licensed contractor, thereby saving the cost of that contractor. Although an owner-builder may end up saving money, you need to weigh the risk of that gamble against the money you may save. If you’re wrong, it can cost you far more money than you planned to save in the first place.

      

One option if your answers were somewhat mixed is to hire an owner-builder consultant. One company called UBuildIt (www.ubuildit.com) offers expert consulting and procedures to guide you through the construction management process. The company charges you consulting fees and offers you products and services that are marked up, but the costs can be significantly less than a contractor’s fees. UBuildIt is a good alternative for saving money and shortening the learning curve; however, you still need to have the time and the management skills to make for a successful project.

      Analyzing the truth about savings

      The biggest motivation for being an owner-builder is the supposed savings. Ordinarily, a contractor makes money from charging a percentage on top of the cost of labor and materials used in the project; this fee or markup can be anywhere from 12 percent to 35 percent, depending upon what and where you’re building. Generally, more established contractors work on higher margins where younger contractors with less experience may work for less. Ask your contractor for a detailed breakdown of how they calculate costs.

      

Where materials are concerned, discount suppliers such as The Home Depot have made construction supplies available to the consumer at contractor prices, which can be real savings if you’re satisfied with the selection available at these stores. If you’re building with more elaborate materials and fixtures, the contractor may have access to wholesale pricing that allows them to make some money without your having to pay more. In some cases, they may be working on a lower margin and may be able to save you some money on items with a high retail markup.

      With labor, you’ll be subject to the prices and availability of the subcontractors in