I can build my own house and save thousands, right?
Sure, you can! But saving thousands is not quite accurate. There are many ways to go about it. I’ll cover a few options in this article.
Warning: what you are about to read are my opinions based on facts and data that I have compiled to further educate you in the Custom home building process.
The 1st option I’ll explore is hiring a consultant or a project manager. We refer to this also as a cost-plus project. Generally, you will be charged 12-30% depending on the size and amount of time it will take to complete your home. You will be responsible to obtain the construction loan or pay cash and make sure that all the material and labor bills are paid in a timely manner once your project manager presents you with your invoices or bills. Your project manager will take care of the day to day process and keep the site running by using his or her trades, which is where the cost savings comes in, sub-contractors and vendors, are more willing to give discounts when you have a project manager/builder involved. They have accounts in good standing and generally enjoy discounts when paid on time. He or she will also make sure that all necessary permits are obtained, and the home is being inspected as the municipality requires. You will have the expertise of your contractor to aid in keeping the billing, assisting you in material selections and scheduling. Essentially the builder/project manager is working for you. A contract between you and the builder is to be expected. We have done many projects this way with great success!
Second option: Be your own contractor. You obtain all construction financing, determine the project budgets and pay all the bills. You also will be responsible to obtain all necessary municipal permits. You oversee the entire project and material selections. You will have two closings your construction and your permanent mortgage loan. Be prepared to shop for a construction note as more and more lenders are requiring you to have a licensed builder to construct your home. You should not expect to save very much in labor and materials due to your project being a single project. Most sub-contractors will charge a higher labor rate and will expect to be compensated weekly if not expect an estimated portion up front. Vendors will not generally give any discounts and materials will be expected to be paid in full before a delivery will be made. This is not only time consuming but also not cost effective as you should expect to be called to pick up extra materials as well as paying for them as you go. It is very rare that you can return un-used materials, be prepared to pay re-stalking fees for leftover materials. You will need to be able to commit 40-60 hours 6-7 days a week during the construction. A typical home of 2400-2600 square feet should take 5-6 months to build if the job is run efficiently and sub-contractors are scheduled in a timely and appropriate manor. This is not a weekend DIY project it is an entire home from concept, site work to final building inspections and everything in between. Be prepared for delays. Most lenders report to us that it takes a home 12-24 months for an inexperienced individual to build their home. Oh and before I forget the longer you take to build your home the more money you spend on interest!
The third option: There are companies that claim that if you sit through a seminar get their “free” book you can be your own builder and “save thousands”. Good luck. Read the fine print and know that you are on the hook. That “optional “site consulting, book, and class” are costing you the same as hiring a professional builder. These “businesses” as reported to us by consumers and lenders report that they are paying 15-25% for the information on how to do it yourself. The “cost savings advertised” are not realistic. With any major decision read the fine print. Food for thought… When you go to a franchised store you purchase “something” someone’s making money, or the company cannot exist… Your dollars are going into someone else’s pocket, too good to be true generally is…
So, to wrap this up hiring a certified professional home builder (which Quartz Creek Homes is) to make your dream home a reality saves you money, time, and often headache. A homebuilder generally is compensated between 15-25% of the raw cost to build… Not as much as you might have thought. You see, homebuilders, because of multiple projects have accounts that are in good standing and receive deep discounts due to volume in which these savings get passed on to you. The sub-contractors and skilled trades have been negotiated with and carefully selected to give you the quality and efficiency you should expect as well as completing your home on time and on budget. Choosing a certified professional homebuilder WILL save you money, they WILL provide a warranty on your home, and They WILL be available after you receive the keys. You will be involved and get exactly what you want with out the hassle and headaches! I don’t know about you, but I’ll choose a certified mechanic for my car any day over a “I worked on one of those once mechanics”, why wouldn’t you choose a certified homebuilder for such an important large investment? Contact us to learn more or to discuss your dream home today!
Happy house hunting! -B