Lets Get Started Building Your House

Lets Get Started Building Your House

After reading my book (The eBook is free), I hope you have grasped the idea that being the General Contractor for building or remodeling a home mainly entails determining building costs (shopping) & hiring professionals (subcontractors) to do the actual work. You certainly do not have to be a “do it yourselfer”. I’m not and I’ve been building a long time.

So what’s next? How do you get started?

You start by following the steps below.

You don’t have to buy houseplans (blueprints) or anything else, or commit yourself to anything at this stage of the process. 

Until you feel comfortable with the process and have determined that you are not only capable and able to save money, but that you will get more for your money and enjoy yourself too, do you get serious and turn what you have learned into actuality.

At this stage though, you can use the free sample floor plans and elevations from the home plan companies listed below to go through the process of getting preliminary estimates of building costs and even talking to subcontractors. Home Centers can even draw up remodeling plans or sketches for preliminary estimates remodeling costs.

Most suppliers and subcontractors in the home building industry will help you in the planning stage at no cost. Why? Because they hope you will decide to build or remodel and that they will get your business.

When you decide to actually build or remodel, then and only then do you go through these steps “for real”.

Let's Get Started!

1. First you must determine a budget. Cash + Loan = Total Budget
The amount you can borrow (mortgage) is based partly on your credit score.

You could just call any bank or mortgage lender. They will check your credit and determine how much you can borrow based on your income. debts, and your credit score. Don’t do this too often (once is enough for now) as numerous credit report inquires will lower your score.

Note: Checking your own credit does NOT have this effect. You are entitled by the Federal Government to one free credit report per year. However, this free credit report does not give you your credit score.

2. So, go to myfico.com and find out what  your credit score is. Your credit score determines the interest rate you will pay and your credit worthiness to lenders. The higher your score, the lower your rate and monthly payments will be, as well as your chances of getting a construction loan!

Then, go to here, and see what interest rate and monthly payments your score will get you. (Scroll down a bit to see the interest rate matrix)

3. Now determine your loan amount:
Affordability Calculator

4. Now, subtract land cost from total budget. The balance = the house building budget.
(If you don’t know land cost yet, plan on at least 25% of your total budget for land.)

5. Determine building costs based on design & size. This is a cost to build calculator, and you can play around with it until you get an idea of the size, basic design (# of corners and one story versus two stories), of what you can afford based on your budget. You can use floor plans from the home designers BELOW in # 6 to play around with on this calculator. You DON'T have to buy the plans yet, just use the floor plans that are on their web sites.This cost to build calculator is from Craftsman Book Company and it's FREE!

IMPORTANT NOTE:Due to a recent change in the calculator, you will get a more realistic cost to build by carefully examining the "Quality Classes" for all groups. Read carefully what the description says. You may want to experiment with a higher quality for one category that is more important to you than another. You can, and should, redo these estimates over and over to see what affects costs the most. For a complete breakdown of the Quality Classifications that the Cost to Build Calculator uses, CLICK here to view.

Go to the Calculator here:Building Costs by City & State

And for an instant look at both median average cost per sq ft (Median average = 1/2 of all the homes cost more to build and 1/2 cost less) and average cost per sq ft (Average = total dollars of all houses built divided by the number of houses built), study this chart from NAHB.

Click on logo to view chart

6. Now, look for plans:
HDA (With Free Cost to Build Feature - Using a General Contractor)
Better Homes and Gardens (With Free Cost to Build Feature - Using a General Contractor)
Larry James Designs
Houseplans.com
Coolhouseplans.com
America's Best House Plans
Familyhomeplans.com
Associated Designs
Homeplangroup.com
Designconnection.com
Architectural House Plans
Original Home Plans
Sun Plans

7. Perhaps you’d like to design your own home:
Punch Software
www.Plan3D.com  

8. Now, after selecting a home plan and after reading my page on "Cost Estimating Explained",  visit a few material suppliers (lumber, windows, doors, flooring, etc.) to get prices.

And, after reviewing steps # 9 and # 10 below, talk to a few of the major subcontractors (carpenters, plumbers, HVAC, etc) to get prices.

Then, using a spreadsheet found on my Free Cost Estimating Spreadsheet page, determine a preliminary cost to build your house.

9. Here are FREE sample contracts and forms: 3 Contracts to Build , Carpentry Labor Contract, Subcontractor Contract, Checklist for Buying Land, Description of Materials for Your Appraiser, Full Waiver of lien, & Partial Waiver of lien.

10. Subcontractors: The Best Place to find the lowest labor prices is on NEW home construction sites…we GC’s keep labor costs low! You do NOT want remodeling contractors. Here is my chapter to review, on finding, scheduling, overseeing, & paying Subcontractors.

For prescreened subcontractors:
Servicemagic
Angie’s List

11. Get yourself a good construction loan, an owner builder construction loan:

But first re-read: Construction Loans

12. Re-read Chapter 8, Building the House Step by Step, and get busy Being Your Own General Contractor.

Have fun and enjoy.

Remember,

You can do it!