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My husband and I are thinking about building a new house (not custom) in a development.
Here are a couple facts:
The reason for our move is relocation
We’re moving into a short term rental in an apartment I’m not crazy about
We are listing our house in May and expect to sell quickly (it’s a very busy market here).
We currently could comfortably put 15k down on something, once our house sells and closes more like 100k
I’ve never built anything before so talk to me like a 2 yr old (-;
Our realtor told me it can take 6-9 months to build new. This sounded a bit long to me. My question is: how does financing work? Can I put a deposit down and get started before I close or even go into contract on my currrent house? Before I list? I’m confidant of selling and I’m interested in shaving a couple months off the build process. I only understand how financing works with resale. I’m really clueless about these questions.
Location: Finally the house is done and we are in Port St. Lucie!
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6 months seems too short, 9 months or longer is typical.
First drawings have to be approved, lot cleared and prepped, permits pulled for each and every detail. As each step is finished, an inspector has to do his thing.
Delays can happen due to weather, back orders of materials, holidays, etc...
Do not put ALL your money into the down payment. You will have so many things you will need to buy after the house is finished being built. Such as window treatments, washer and dryer, light fixtures, ceiling fans, landscaping. We didn't think to ask if gutters were an option. We had to get those done after we took possession.
You can make a deposit to get the ball rolling. We started with a couple of thousand to sign the contract. Ours was a new build on a lot we picked out from lots that were for sale. We didn't like any that the builder already had. Ours was not a build in a planned community. We didn't want to be in an HOA.
We found the lot and the builder purchased it, the cost was rolled into the build.
It's exciting to go through all the processes. Try not to stress over all the details.
Ours took just over 9 months.
The longest was the time between getting the plans done, approved and the permits pulled. That was about a 3 month process. Then we could see things happening. We visited the site almost daily and a lot of times nothing would be happening between steps. That's when they were waiting for the inspectors to do their thing.
You didn't mentioned where you are, and build time depends on part of the country because of harsh weather and/or if you're buying a higher-end or more basic builder. In my area, the higher end builders take 8-9 months. Some 12 months. MOST of the basic builders, not many bells and whistles, take 4-6 months. Some are 90 days after permits. They can staple those houses together.
I have a closing on Tuesday and we've been under contract since July, 8 1/2 months, and it's not a fancy house. They kept saying the weather was an issue, but I'm in the Austin area. We had 3 days of freezing weather, and that's about it... but it was enough to through the stucco guys' schedule off...
Edit: I forgot to mention about your financing question. When you buy in a development, the builder takes all the risk. You aren't putting anything down except earnest money, and then design center deposits. You will need to get pre-approved to show them you can afford the house, either before or after selling. More than likely, they'll give a conditional pre-approval saying you must sell in order to buy. You give the sales rep the comps of you neighborhood and keep them posted on the sales progress, and they'll let you move forward. Not many builders allow you to build with a contingency, so they'll tell you over and over again that you will not get your earnest money or design money back if you do not close because of the sale of your current home.
Have you looked into modular homes? If the manufacturer is not too busy, you can have your new house built in about 2 months including foundation and modular homes come in all styles and shapes. See link.
You say new in a development. Is your builder going to be the developer or will it be an outside builder? Typically in a development done by the developer, one puts very little money down (a few thousand $) and does not pay off the balance until closing. It is not like making payments as the construction goes on.
The developer usually has an association with a lender and offers some spiffs if you use that lender. As long as the developers lender is no more costly, there can be an advantage to using them. If they are more expensive, drop them fast.
Thanks everybody and especially John golf.
This is just a standard production build in a development. Nothing fancy. I’m going to talk to the builder in a couple weeks when I go out there and explore my options. I’ll update!
Just closed last Thursday on a new construction in a development. Here was our timeline: June 1, met with builder to discuss. July 5th - signed contract with March 30 completion date. Began digging foundation August 29th. Framing began October 20. House was done early and we closed March 15. We used one of his stock plans but reconfigured the master bath and semi-finished the basement for Mr. Dokie’s wood shop.
Our house is a pretty basic 1,550 sq ft 3/2 ranch.
As far as the financial aspects, we put down a $1,000 refundable lot reservation before we got the firm price and revised plans, put about 5% of the total price (non refundable) at contract signing and another 5% 60 days after that.
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