You’ve decided to build a custom home. Congrats! Now the fun can begin. Before you begin planning how you will decorate the living room or how many bathrooms you’d like, there is an important first step you must take – buying land. When you’re building the home of your dreams, choosing the perfect site is a top priority. A question we hear often is “Should I purchase a lot before hiring a builder?” While there are many advantages to having a professional home builder guide you through this process, there are disadvantages as well. At Turnkey Homes, LLC, we believe in giving you all the information you need to make the best decision for your family. Here are the factors to consider before purchasing your lot.
Custom home builders act as more than a builder. They offer a contractor’s perspective on lots you’re considering. Depending on the size and style of home you are building, different plots make a better match. Builders are also familiar with local zoning regulations and have relationships with developers and real estate professionals. They have extensive knowledge on choosing land that is the most desirable for your project.
The Pros
Hiring a builder before buying land will likely save you money upfront. Custom home builders not only have a vast awareness of market prices, but they are also experienced in material cost, industry changes, and financing. Responsible builders will advise you to consult with an attorney or loan officer before purchasing land. They encourage you to have a complete, accurate understanding of how construction and land loans operate. By hiring a builder beforehand and speaking with a banking expert, you may be able to secure a loan with better terms and covers 100% of building costs.
The Cons
Purchasing land before hiring a builder gives you complete control over the decision. Knowing the location of your new home was researched, inspected, and purchased solely by you gives you a great sense of accomplishment.
Time and money are essential factors to consider in the decision-making process. Hiring a builder after you have your land secured gives you time to stretch your spending. That said, opting to buy land on your own has the potential to cost you more money upfront and in the long run. More equity is required upfront when you purchase before the construction stage.
If you have a builder on standby, waiting to start construction on your custom home, the bank may limit your loan terms. Banks differ drastically in their home construction terms. Better financing options are available for customers applying for land versus those asking for a full construction loan and land.
Every home building experience is unique. Whether you decide to purchase a lot on your own, or would like our guidance, Turnkey Homes will help. Not only do we offer the best quality, we offer the best price. View our gallery to get ideas for your project, and then call for a FREE estimate.
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