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Don't forget about the water/well, sewer hook-up/septic, gas-propane-electric, driveway, drainage, soil studies. All those things will be needed and your builder may not want to handle all of that. The "house" is only one part of lot development.
I'm trying to gauge how much effort is needed to "build your own dream home" on a vacant lot.
Let's say a building plan has already been selected and blue prints are available. Is it possible to come to an agreement with a builder/contractor on a price, work out the payment schedule, and simply write the check at the appropriate time and let the contractor do the rest?
Or are there things like permits etc. that homeowners absolutely must do themselves?
I wouldn't expect to be able to turn the builder loose and never have to be involved again beyond writing checks because there are always going to be issues that arise that will need your input.
But generally speaking, yes. It's the general contractor's responsibility to pull all the permits, deal with the utilities, schedule inspections, etc. So as long as you provide architectural drawings and select all your materials ahead of time, you should be able to sit back and let the contractors do their thing with only minimal involvement.
There a couple of builders who work on the similar strategy to the national builders but let you provide the lot. I think Schumacher and maybe Ryan are two of them. You would go to their plan center, pick a plan/ugrades/options and then they build the home on your land.
I put a contract on a pre-construction tract house (Lennar) a couple of years ago and basically you had to stick to the set plans that could go on that lot, from the range they put in that neighborhood/section of the neighborhood, and choose from the packages/options they provided. It was really little different from what you are describing except they owned the lot.
I've worked in design/architecture and can tell you some people would be better served by picking a stock plan and having fewer options. Not everyone likes/enjoys making decisions or wants to 'see the sausage being made.'
On the higher end- there are a couple of luxury home builders/developers in my area that come close to what you desire.
I'm trying to gauge how much effort is needed to "build your own dream home" on a vacant lot.
Let's say a building plan has already been selected and blue prints are available. Is it possible to come to an agreement with a builder/contractor on a price, work out the payment schedule, and simply write the check at the appropriate time and let the contractor do the rest?
Or are there things like permits etc. that homeowners absolutely must do themselves?
When you say "building plan" has been selected and blueprints, the contractor will do the rest.
If building plan includes all the details like you've picked out wall colors, tile colors, faucet types, lights,
carpet, what kind of front door, steps? deck?
There are a lot of details in selections. After that, sure its mostly on the contractor.
But I can't imagine not want to get to the site at least once in a while. Just so you can go "OMG why did they do it this way!?!?!?!?!?! ARGH" Which is what always happens if you aren't down there all the time.
If you have a lot of money and not time, hire someone to honcho it all for you and monitor the contractor.
When you say "building plan" has been selected and blueprints, the contractor will do the rest.
If building plan includes all the details like you've picked out wall colors, tile colors, faucet types, lights,
carpet, what kind of front door, steps? deck?
There are a lot of details in selections. After that, sure its mostly on the contractor.
But I can't imagine not want to get to the site at least once in a while. Just so you can go "OMG why did they do it this way!?!?!?!?!?! ARGH" Which is what always happens if you aren't down there all the time.
If you have a lot of money and not time, hire someone to honcho it all for you and monitor the contractor.
Agreed. As with many projects, your costs will be a combination of money, time and stress and it's going to be up to you what proportion of each you can (and want to) afford. Not everyone has the personality/character, expertise, initiative and mental strength required to build. So choose your stresses wisely Regardless of what you choose, be prepared for at least a couple of crises! And if you're choosing a contractor, be very diligent about checking references. The industry is overflowing with pretenders.
I'm trying to gauge how much effort is needed to "build your own dream home" on a vacant lot.
Let's say a building plan has already been selected and blue prints are available. Is it possible to come to an agreement with a builder/contractor on a price, work out the payment schedule, and simply write the check at the appropriate time and let the contractor do the rest?
Or are there things like permits etc. that homeowners absolutely must do themselves?
Looking at the OP again and wondering, who do you trust to get your dream or vision built? To build a home is one thing. To build a dream home is a completely different thing. If you are married the build or vision can be expanded upon or blown up when the spouse has a different idea or is seeing things differently. I have seen marriages erode over the build of a dream home, that became a night mare.
A close friend owned a Lumber business and was contracted to supply lumber for a dream home. Because of change orders mid way into the project an ornate wooden staircase that was going to be built on site was changed and the very expensive lumber was left out in the rain. The couple did not want to pay for any of the lumber on the home unless that expensive stuff was removed from the total bid. My friend that owned the lumber company was also close to the couple that was building the home. That friendship ended over this project.
There a couple of builders who work on the similar strategy to the national builders but let you provide the lot. I think Schumacher and maybe Ryan are two of them. You would go to their plan center, pick a plan/ugrades/options and then they build the home on your land.
I put a contract on a pre-construction tract house (Lennar) a couple of years ago and basically you had to stick to the set plans that could go on that lot, from the range they put in that neighborhood/section of the neighborhood, and choose from the packages/options they provided. It was really little different from what you are describing except they owned the lot.
I've worked in design/architecture and can tell you some people would be better served by picking a stock plan and having fewer options. Not everyone likes/enjoys making decisions or wants to 'see the sausage being made.'
On the higher end- there are a couple of luxury home builders/developers in my area that come close to what you desire.
I built with a tract builder 3.5 years ago, and despite being locked into a particular floor plan and limited to the design center options I picked out at the beginning, I was still on site all the time. Just because it was on the plans didn't mean it got done properly.
For instance, every counter with a sink got replaced because of builder error
1. kitchen island had the dishwasher installed on the wrong side (based on what I had signed off on in the plans) and because it's not exactly centered, that counter had to be replaced when they re-did the island.
2. master bath counter was installed and I said, gee, it looks nice but why are there oval shaped holes given that I picked out a rectangular shaped sink? Cue facepalm by the building super once he looked at the plans again
3. I picked out one side for the single sink in the hall bath but they ended up saying it was code that it had to be on the other side and further away from the light switch (have no idea why because the sink in the master on that side is even closer to the light switch but whatever) so they switched out that counter after the sink was installed.
I told them they were very lucky I hadn't picked out granite counters, as they had to eat the cost of all of these replacements. I guess the third one was their catch but the other 2 were caught by me being on site several times a week and pointing out the error. Still easier to fix it then rather than during a final walk through before closing though!!
You have the plans, the money, and own the vacant lot free and clear. A builder can and will turn key the entire project for you once you have signed a contract for a fixed amount or a cost plus contract. You aren't involved once the builder files his mechanics liens other than an observer, as such. Everything has already been agreed upon before signing of the contract. That pretty much defines what I've been doing for a few decades now. Any permits, engineering, etc, should be included in the contract price so there are no surprises for you. I would also tell you to put into the contract a "bailout clause" in that should you not be happy with the builders efforts, you can pay all of the bills on the project plus a specific percentage and you and him are no longer in business together.
Be wary of what you learn from the internet. For example - a builder does not file mechanics liens unless you fail to pay him and he intends to take your house and sell it to get his money. In some states a builder and his subcontractors may serve and/or record a preliminary notice, a notice of furnishing or the same document by some other name, but not a lien. If a builder files (or, more correctly, records) a lien before they do any work, or if you have not missed a payment when due - fire them and sue them for slander of title immediately. A lot of people will post things based n what they heard someplace without really understanding how things work.
Your contract will need to be fairly complex regardless of which delivery model you choose. Among other things, you will need to have the builder provide conditional lien waivers from all the subcontractors for each payment after the first. Most states have limitations on how much a builder can ask for up front. typically it is 10%. if a builder cannot cash flow the job with 10% down, you may want to find another builder. Another option woudl be for you to pay for the materials directly. (The is will be up to you to get waivers from the supplier). If you have a lender, they will have lots of requirements before they will release payments, including having inspections. Some lenders will require you to sign off on each draw request stating the house is complete to the extent claimed. However you contract will not be simple. If you do not understand building procedures, contract and liens, you will need someone to advise you, or an owner's representative to deal with these issues. Even a good reputable builder can get sue, get divorced, or go out of business for other reasons and leave you hanging with no house and no money, unless you protect yourself.
Your contract will have to specify how the builder is to deliver the work. It can be done on a lump sum basis where you pay them a fixed amount of money, regardless of what it costs to build the house (which will encourage the builder to cut corners and always choose the cheapest path when he has discretion to make decisions). You can proceed on a Guaranteed maximum price (GMP) where the builder charges you the cost of the work, plus a specified percentage for markup up to a guaranteed maximum amount (subject to adjustment for change orders). If you are insane, you can proceed on a cost plus basis where you simply pay the builder whatever his costs are and a percentage or fixed fee with no cap (you get a much lower fee when you do that). If you use GMP you may want to offer the builder a share of any savings. This will give him incentive to beat the GMP price. You also need to specify what is and is not included in the fee and what is reimbursable. The more that is included, the higher the fee will be, but it helps avoid excess charges in areas commonly inflated, like site clean up.
You can also hire a design/builder. Where they pay for and manage the design services as part of the contract. That takes some headache away from you, but costs more. It does not eliminate the need for your involvement. You will still have to make decisions.
Catalog plans can be purchased and built with no modification and filling out details - virtually never. You will probably need a designer to tweak the plans and make them fit your property needs and desires. If you are going to have a basement, you will either have to use only designs made for homes with basements or modify a slab design. If you are building on a slab, the reverse will be true.
What is the width and depth of your property? What are the required setbacks? Where on your property are soils and grade conditions appropriate to locate the house? How far back form the road do you want to be? What are your sol and drainage conditions? All of these things can impact where you put the house on your property and the allowable layout of the house.
You need to specify what decisions the builder can make, and what decisions will be made by you or your owner's representative. Keeping in mind, the builder will make decisions based on what is best for the builder.
Few builders will also serve as developer. They lack the expertise for it. They will pull the building permit, they will not usually handle zoning variances, civil engineering of the lot, drainage and retention issues. Many will not get involved in bringing utilities to the edge of the property or arranging for a well or septic system. They may install the well or septic, but they will not handle the approval process. It is too time consuming and can take months of attending meetings and begging for a decision, especially if you need variances.
Do you want to leave to them the decision of whether to have your electrical and telephone wires underground or above ground? They will choose the cheapest. The kitchen cabinets you selected are no longer available, do you want them to chose alternates? They will choose the cheapest available. The plans do not specify the type of baseboard molding and door casings to use. What do you want? How wide will it be? Do you want them to move the light switches to allow room for wider casings? Many times the plans do not show precise locations for light switches, outlets, and the like. They are left to just follow code, Code generally allows different choices (like which side of the door do you want the switch on? I hope you like the builder's preferences. The plans show a three section window but in fitting it up, there is not enough room for a three section window. You can either go with a two section window and an odd looking blank wall filling in the rest of the space, or you can make the house 6" longer at a cost of $800. Builder's choice? You are getting the odd looking blank fill wall. No plans are perfect, they all have error and decisions have to be make on how to address them. Usually you have a better result more expensive option, or a poor result less expensive option. Do you want the builder to choose?
The furnace you wanted is no longer made. A better furnace is available for $900 more, or a cheaper furnace that will almost heat your house as long as it is not unusually cold outside. Do you want the builder to choose?
The township inspector tells the builder you have to reduce the size of your house by 2.5 feet to meet their requirements. Builders choice is to reduce the size. oops no your windows and doors all have to be downsized. Turns out this could have been easily resolved by a visit tot eh planning committee, but there was no homeowner around to take care of it. Builder will take the easy path, Inspector said we had to make it smaller.
Electric company says due to frost laws, they cannot install your electrical feed for three months. Without power, the builder cannot finish the work. In reality, the electrical company is lying and they are just busy. You could pester them into putting it in now, but the builder is not going to do the legwork for that. Now you are delayed for three months. The subcontractors all move on to other jobs. When you power gets in, the builder is tied up elsewhere for a week, then it takes him another month to get the subcontractors re-assembled and working. However they now want more moeny to finish the work. The delay is nto the builders fault. You are going to have to pay more. It could have all been resolved with a telephone call to the electric company, but there was no owner around to call them.
It goes on and on. the owner must be extensively involved. You can hire an owner's representative to deal with the problems, make necessary decisions etc, but you will have to live with their decisions. An owner's rep typically gets 10% of the construction cost. In this market, you might have to pay 15% to get someone good.
It is not a simple undertaking and you will either have to learn the ropes, or hire someone to handle the owners side of the obligations. Simply handing a builder your checkbook and walking away is beyond foolish.
If you are paying the premium to build a custom home, you should be there to make it a truely custom home. Otherwise, why pay the premium? Just buy an assembly line built home in a subdivision with big lots. You pay a lot more for a custom home, more than you will recover in home value for many years. It makes no sense to pay that premium, and take that loss if you are nto going to put your personal preferences into the home and make it truly custom. If all you want is a building on a lot that you can live in, go with a pre-manufacture red home (modular) or a subdivision house. It make much more economic sense.
Last edited by Coldjensens; 04-09-2018 at 02:15 PM..
My folks did this 30 years ago...sort of...turned out poorly.
Dad found a nice chunk of land in a rural-ish suburb.
They picked a relatively well-known (and not inexpensive) panelized manufacturer. That manufacturer (at the time) would not recommend builders, but would make known who the builder was on projects in your area.
They picked a contractor who had built one such home nearby.
Accordingly, my folks didn't expect to be 100% hands off, but compared to a full-custom home they expected (and wanted) to be perhaps 60% hands off.
Contractor was a nightmare. Needed 110% hands on supervision but never got it until it was too late. House had problems!
I could never imagine anything built from scratch without me being involved in some significant way.
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Regardless of what you choose, be prepared for at least a couple of crises! And if you're choosing a contractor, be very diligent about checking references. The industry is overflowing with pretenders.
