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Building a house can be one of the most satisfying activities that you can undertake. Alternatively, it can be one of the most aggravating things you do during your lifetime. The difference between building your dream home or the “The Money Pit” has a great deal to do with being certain that building a house is the right option for you and then following through with many of the details related to building a house--and there are thousands of details!

But, first, you must determine if the pros of building outweigh the cons, such as:





More customized to your wants and needs.   Generally more expensive than a resale house.
All components of the house are new.   The delay during time of construction.
Most components are of the latest design.   Potential "new house" problems--like anything brand new, it is rarely perfect.
New houses are generally built in areas of expansion rather than of decline. This will help your future resale value.   The added costs--landscaping, window treatments, decorating, etc.--that you incur after moving in.
 May be more personally satisfying if you take an active role in the house building process.   More complicated--finding a lot, finding a builder, getting a construction loan, etc.

There is more than one way to get a newly constructed home: 

1. You can buy a spec home--a home that a builder has already built, or that is still under construction. Often, the builder will stop after a certain point and allow the purchaser to select the color of the carpet, type of countertops, lighting, etc. 

2. You may elect to have a home built in a subdivision of new homes where certain designated builders can give you a choice of plans. 

3. You can build a house from an established plan on a lot of your choice. 

4. Lastly, you can build a custom home from scratch. This is the most costly approach, and the most time consuming, but you should have exactly what you want when you are finished.

Unless you buy a house that is already standing or in a subdivision, you will most likely need to choose and employ the services of an architect and/or builder. CHOOSE WISELY! During the time that your house is being built, you will be spending a lot of time with these individuals. 

Building a house often involves compromises. Many home buyers consider building because they feel they can’t afford the “perfect” house in the resale market. Be aware, though, that unless you have an unlimited budget, are building on a highly adaptable lot and are a great distance from your nearest neighbors, you will have potential compromises you will need to deal with. Some examples are: 

COST: What you want may cost more than what you want to spend. 

LOT: The lot you select may not be able to accommodate the type of house you want to build. (Basement, side-loading garage, etc.) 

BUILDING CODES AND REGULATIONS: How you want to build the house may not fit within the building codes of your locality. 

NEIGHBORHOOD COVENANTS: You also must consider the covenants and restrictions of the neighborhood, if any. Many times, your plans will need to be approved by an architectural committee of the neighborhood. Limitations may be put on the type, size or style of the homes within the neighborhood.


1. Don’t overbuild for the neighborhood. Having the largest and most expensive home in the area may be wonderful for your ego, but it could be a disaster when it comes time to sell. 

2. Build for resale. No matter how long you intend to stay in the house you build, it will have to be sold at some point (which is often sooner rather than later). Never build strictly for your own wants and tastes--a 1 bedroom, 3 bath house may be perfect for you, but it will be next to impossible to sell later. Get what you want--but make sure it  will be appealing to others, also. In other words, use discretion! 

3. Get the best contractor your budget will allow. When building a house, quality is more important than quantity. 

4. Monitor the progress of the house building as much as possible. Even though the builder will not necessarily want you underfoot, it is wise to get out to the building site regularly. During construction, a lot can be accomplished--both positively and negatively--in a short period of time. This is especially true during the framing state. Catching a mistake early will save a lot of headaches later. 

5. Watch your construction allowances. Generally, in the total cost of building a house, you will be given allowances for such items as flooring (carpeting, vinyl, tile, wood flooring) lighting, plumbing fixtures, countertops, etc. Make certain that you can actually get the materials you want for the allowance amount. For example, if you have a $3,500 flooring allowance and the wood and tile floors you want will cost $6,000, you are the one who will have to make up the $2,500 difference. These “allowance overruns” can--and do--add up quickly!


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