Arthur Rutenberg Homes Blog


6 Things You Must Know to Build a Custom Home

Posted on June 25th, 2015

luxury custom homeBuilding can be an exciting experience with a very rewarding outcome—your luxurious new home. However, a custom home is a major investment. Educating yourself on the process helps ensure your money, time, and energy are well spent, and that critical details aren’t overlooked. From financing to final inspection, there’s much to manage. Numerous people will be involved, each with individual perspective and interests in your project. Do your research. Read online, and meet with industry professionals. Here are the critical areas in which to prepare yourself before beginning construction.

1. Area

When choosing an area to build your new home, consider your top priorities for location. Is having a short drive to work most important, or having recreational amenities nearby? Do you want to live closer to friends or family? Are city conveniences your preference, or natural, quiet rural settings. If your children will attend public schools, learn about the sizes of local schools and their performance metrics. Location dictates the range of property values for your home. Review detailed demographics and other metrics available online for most U.S. communities and/or through local governments. Talk to residents, and ask local officials about future development plans for the area.

2. Lot

Consider your lifestyle and your family members’ needs and preferences. Do you want to live on the water, or on wooded property, or on a street lined with manicured lawns? Is the neighborhood desirable per your standards? Is there sufficient space between homes? Beyond the lot, evaluate the neighborhood. Examine aerial views to see what’s nearby. Prior to purchasing property, meet with a building official from the city or county (as applicable) to receive up-to-date information about building codes that might affect your plans. Ask about any recent efforts to change zoning or restrictions in the area. And, make sure you are fully informed about all subdivision restrictions (covenants). The site you select may seem perfect until you discover that a large housing, commercial, or industrial development is to be built very nearby. Decide how far you want to live from shopping, restaurants, hospitals, and other necessities and amenities. Make sure your home value can be expected to increase, especially if you expect to sell in the future. Ask how much comparable homes in the neighborhood have sold for recently, to help you assess current property values.

3. Plan

Thorough planning, and close coordination with your general contractor determines the success of the project. Wise design choices ensure comfort and healthfulness of your new home. The home should fit with neighborhood (style, size, etc.), and must meet all building restrictions. Design based on your lifestyle and plans for any family members to move out, or in. Do you need safety features appropriate to protect young children? Do you need large entertainment space, or overnight guest accommodations? Will you live in this home during your retirement? Ask your builder which selections and modifications have been common among buyers. Learn about typical snags before starting construction. Expect things to go wrong and impact the schedule. Don’t add so many upgrades that  your house is over-priced for the neighborhood. Select styles that have broad general appeal and that are consistent with the neighborhood.  And, make sure exterior features are configured to suit your lifestyle.

4. Builder

The builder you choose should be well-experienced and willing to help you and keep you fully informed through every step of the process. The contractor should guide you in identifying areas where you can save and where you should not try to cut costs as a priority. Learn which contractors have the best reputation for quality and timeliness. Check with past clients, with the National Association of Home Builders‘ (NAHB), and with the Better Business Bureau. How long has the company been in business? Is it licensed and adequately insured for property liability (and for worker compensation, if required)? Ask your real estate agent (if you have one), or other experienced professional to help make the punch list. During the final walk-through prior to closing, don’t rush through the inspection. Verify that all substantial items on your punch list have been fixed.

5. Interior

Consider obtaining professional guidance in selections of textures, materials, colors, and other design particulars for the showcase areas of your high-end home. Unless you build a very large house, space allocation is a priority. Plan sufficient locations and amounts of storage space, outlets, and lighting fixtures. Only include rooms that will actually be used. Place bedrooms away from noisy and high-traffic areas. Place the kitchen near the garage or back entry to route the heaviest foot traffic away from the main living spaces. Ensure the selected HVAC system will not under-perform, lending to moisture issues, or over-perform, using energy excessively. Consider wide, inviting hallways. Confirm that doors open in the direction you prefer, and that light switch locations are appropriate. Ensure that only reputable electrical, plumbing, and other sub-contractors are hired. Inspect pipes and check drainage during construction. Design your home for energy-efficiency to maximize comfort and save costs. Choose Energy Star™ rated appliances.

6. Starting

Tour a house completed by your prospective builder to inspect the quality. Carefully work through your budget. Your builder will help you calculate a realistic estimate, including construction, down payment, tax savings, buffer account, and all relative calculations.  Add 10-20% for unexpected expenses. Prioritize your wish list, and, eliminate features as necessary. Include funds to be kept in escrow for completion of punch list items. That frees you to move in and still require the builder to complete minor punch list tasks afterward. After determining you are ready to build the custom home, you can take it to your lender or banker. Choose the lender with the best offer or see if a straight cash sale makes more sense. There may be tax advantages to structure loans around. Construction lending differs from mortgage financing. The home construction line of credit is used to pay suppliers and subcontractors. After construction is completed, you’ll need a home mortgage or to cash out, which pays off the construction loans. Prepare to make a 20% down payment. Be clear on the final cost, and stay on budget.

Enjoy your new luxury home

Stay involved. Many decisions must be made. Professionals can suggest, but only you know best what you and your family need and want. If you have your contractor make your decisions for you, you risk having your new home not match your vision, or having it cost more than expected. Prioritize and splurge wisely. Know what you’re willing to compromise on and what you won’t. Manage your frustrations. And, enjoy the process of making your dream home a reality. 

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