Secret to successful planning and execution of your dream home.
1. Know your Budget
The first step is to know your budget before speaking to anyone. You need to understand what you can afford and what you are willing to spend. These 2 numbers are rarely the same, so you need to make a decision on the not to exceed budget.
Once you’ve established a budget, it’s crucial to share this information at the start of design phase of your new home to prevent creating a design beyond your financial means. It is paramount to ensure that the design aligns with your lifestyle and budget. Be aware this is not the stage where you negotiate price. Contrary to popular belief, disclosing a larger budget doesn’t necessarily lead to higher costs. By openly discussing your budget with the builder or designer from the outset, you can determine if your vision is feasible.
YOU ARE NOT NEGOTIATING PRICE AT THIS STAGE!!
If your desired home’s size and quality exceed your budget, seasoned designer/builder can offer suggestions on where to cut back on budget and where to allocate more based on your priorities.
At this stage, it is crucial to establish the basics before starting the design process; otherwise, you may end up repeatedly redesigning your home and struggling to stay within budget.
If you are fortunate enough not to be constrained by a budget, the design brief can emphasize your lifestyle and the quality of finishes. However, if sticking to a budget is your top priority, it’s important to control the overall size of the home and the architectural style from the beginning.
2. KNOW YOUR MOVE IN DATE
If you have a fixed deadline, it’s wise to share this with your builder before starting the design process. Are you aiming to move in by Christmas or before your lease expires on a rental property? The entire design process can take between 3 to 12 months, depending on the complexity of the design and required approvals.
A professional builder can provide a scheduled timeline once the initial design is completed. This timeline will help you understand the duration of various stages, such as construction drawings, engineering, and quoting, and how they affect the start and completion dates of your new home.
It’s also important to note that custom home builders typically construct only a limited number of homes each year due to the extensive supervision required.
This can lead to limited availability for starting new projects. If you delay providing decisions necessary for finalizing a contract proposal, you may miss the next available construction slot, potentially delaying your project by three months. Regular communication with your builder is key to staying informed about upcoming start times.
3. KNOW WHY 80% of DESIGNS NEVER GETS BUILT
It may surprise you to learn that over 80% of custom home designs are never built. Why? They often exceed the budget. This happens because architects design homes based on the client’s vision rather than their budget. Although budgets are typically discussed during the initial briefing, architects and building designers often have limited knowledge of construction costs and can underestimate them by 40-200%. This significant shortfall can make it impossible to proceed with the design, leading to many plans never being realized.
The solution is simple: involve your builder in the design phase. By doing so, you can create a custom home that is both practical and within your budget. Builders have the expertise to anticipate the cost implications of challenging sites or architectural features. While hiring an architect might cost $10,000-$60,000, many professional builders offer consulting services for a fraction of that price, often just a few thousand dollars. Many custom home builders provide a design-and-build service, including consultation as part of the package. Getting your design and specifications right from the start can save you thousands of dollars in potential redesign fees and months of wasted time.
4. Know your selections due date.
While it might seem that deciding on the color and style of your bathroom tiles can wait until after you sign a building contract, it’s crucial to understand that each decision you make could potentially delay your project. For example, tiles may need to be ordered up to four months in advance, so it’s important to finalize all your selections during the design phase of your new home.
Once the building contract is signed, the builder will place numerous orders with subcontractors and suppliers to secure pricing. If your contract includes Provisional allowances cost, prices may increase between the signing and the ordering stages.
To avoid unexpected budget overruns, keep a detailed record of your selection choices in a spreadsheet. Most professional builders use an online project management system where you can track all your selections.
With so many features and upgrades available, it’s easy to get carried away and over-invest. Making changes to your selections after the contract is signed can cause delays, as new orders may need to be placed and delivery times could affect the construction schedule. Delays in construction due to selection changes can result in project schedule extension.
5. Understand the Ideal Length of a Contract Proposal
A contract proposal can be a strong indicator of how smoothly your project will proceed. Building a new home relies heavily on thorough planning and organization.
If your builder cannot provide a detailed list of specifications (typically 15-30+ pages) along with a construction schedule and estimated timeline, your project is likely to face delays.
It’s important to recognize that many residential home builders, while skilled and hardworking, may lack significant business experience. Unless they have the necessary systems in place to manage a building project, they may rely on memory and intuition rather than structured planning.
Custom home projects involve coordinating over 220 orders with various suppliers and subcontractors, all of which must align with a precise timeline. This complex process requires careful planning, often managed through a construction schedule. If your builder cannot present a schedule representation at the contract signing, it likely means that the project has not been properly planned and scheduled.
6. Understand Cost of Variation
Variations can cost builders both time and money. When you make a change to your building contract, be prepared for an extended completion date and additional charges for the delay and extra work involved.
Each variation also requires considerable administrative effort from the building company, so an administration fee will typically apply to each change.
Generally, variations made after the contract is signed can lead to delays, either due to the additional work required or longer delivery times. Before approving any variation, verify how many days will be added on the project schedule, as this will affect your project’s completion date. For example, changing a tub filler involve more than just selecting a different fitting.
Example 1
Donald requested to change tub filler from a standing tub filler to a wall mounted tub filler soon after signing his building contract. The plumber had not been to site to perform the rough in, the plans were altered, and the orders were amended easily which meant there were no delays and Donald simply paid for the cost difference along with a variation fee.
Example 2
Michelle decided to change her tub filler from a standing tub filler to a wall mounted tub filler after the plumber had already completed the rough in. Although the bathroom had not been tiled yet, the plumber was required to come back to site as the pipes needed to be repositioned before the tiling could be started. This resulted in a 8 days delay to the construction schedule, a cost per day (for delays), a charge for the plumber’s time, along with the cost difference of the tub filler and a variation fee.
Although the variation was the same, the cost of the variation was significantly different for Michelle simply because she delayed her decision for too long.
BONUS:
How to Choose a Builder Before Starting Design
Begin by conducting initial research online. Review builders’ websites and Facebook pages, paying attention to customer reviews, testimonials, and the information provided, as well as any affiliations with professional organizations.
Shortlist no more than three custom home builders who specialize in the type of home you want to build. Contact them through their website’s contact form and by calling their office, leaving a message each time.
To evaluate their responsiveness, use different names for each inquiry. This will help you assess their email and phone communication speed. Builders who are slow to respond to you are likely to have similar issues with their suppliers and subcontractors, leading to potential delays.
At this stage, use the response time as a criterion to disqualify any builders who do not reply promptly. For those who do respond, spend 15-20 minutes on an initial phone call. A professional builder will typically ask more questions than you do to better understand your project goals.
If you feel confident in their approach, the next step would be to arrange an onsite meeting.
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