It now appears many of you are torn between building, purchasing a larger or downsizing to a smaller home or apartment or staying where you are an adding an extension, upgrading or even making it more user-friendly, retrofitting and making things handicap accessible, etc. as you grow older.
You may be a millennial, younger or older and have decided that you want to construct your dream home. A large amount of planning preparation must take place in order for your project to be completed and successful.
First, what is a budget that you have decided on and will you be paying outright for your purchase or financing? If financing, I would suggest that you go and have your lender (or ours) to provide you with either a least a pre-qualification letter or a commitment letter to lend you the money; based on your appraisal of the property.
You will obviously need all your financials (two years tax returns, pay stubs if you are a salary or wage earner or your 1099 and two-four weeks of your pay stubs.
One must decide where you want to live and search to see what land or even a knockdown house is available and its accompanying costs to do this. Have you discussed your plan with an architect?
You will need him/her to create a drawing or have an idea of what you may want to build. Also, another route you can take is the internet, where there are many, many plans to choose from, just google, “ building plans and styles for new homes.”
However, I would suggest enlisting a qualified and experienced architect (or ours) to assist you with whatever building plans, permits etc. that you will need to make it a smooth and seamless process from start to finish.
There are expeditors that can help you with your paperwork; however, an architect would be my first choice if I were to build anything, so there will be less of an opportunity for major and minor mistakes as you go along.
Changes will always come up as you begin and you want to make as many changes in the beginning as possible, so you will minimize overall costs; since your labor will be your greatest expense and not the actual materials that you purchase to build your new home with.
Also, keep in mind the S.A.L.T. (State and local taxes) deduction of a maximum of $10,000, that you will be subject to, so you want to plan in advance to guestimate (or call me) what your real estate taxes will be, so there will be less of a surprise, once you get your final new tax bill.
You must also consider the exterior costs of your landscape, eg. patios, trees, plants and flowers. These could be quite substantial without the proper planning and budgeting. Even your interior costs could go sky high, without realizing what your budget will be.
Of course, we all desire to go a bit higher as we construct our “dream home” because one gets very emotionally involved as we begin to see it evolve before our eyes and we get really excited as we await the end product.
Then we may totally forget about that, so-called budget that we swore we would stay within. Voila! That’s when you need to wake up, have an epiphany, smell the coffee and put a bit of discipline back in the mix and come back to reality!
Stay the course and do your best keep within your budget, unless you have that spare money that you have squirreled away (that maybe your significant other doesn’t know about, ha!) and you surprise her or him and use it to add some amenities that you really need (that you can afford) but not just want, because you will be way beyond your initial budget.
However, keep in mind, you will not lose money by upgrading to better quality appliances, windows, roof, flooring, fixtures, or recessed lighting, which I always recommend, eliminating standing lamps, taking up space; or bathroom fixtures, faucets, etc. which will last longer and provide better value when the time comes to consider selling or even renting your home out, for a better return on investment (R.O.I.)
Building a new home is a very exciting and rewarding endeavor and you probably deserve it at this stage in our life and that’s why you are contemplating doing it, but requires a plan!
My motto is always, “proper planning, prevents piss poor performance” so go slow and steady, cross your “T’s” and dot your “I’s” and cover all your bases and if you need any assistance, I am only a phone call away for a consultation.
Part 2 (renovating your home, next week)
