Custom Home Building 101

What Realtors Must Know About Working with Custom Home Builders

The Realtor's Role & Responsibilities

  • Through Discovery/Buyer Consultation Determine Client's Budget and Type of New Home (Custom, Semi-Custom, Production)
  • Assist in Locating Community or Home Site; OTP on Lot; Due Diligence on Lot; Financing if needed for lot and home
  • Recommend/Refer Appropriate Builder(s) and/or Architect(s)
  • Guide Client Through the Design and Proposal Process
  • Represent Client in Execution of Building Agreement or Contract
  • Act as Liaison between Builder and Client for communications if Builder doesn't have someone in place
  • Manage Selection Process and Allowances if Builder doesn't have a Designer
  • Coordinate Walk-thrus and Punch Lists
  • Handle any concerns of the client during the building process

Custom

  • Unique Design Features
  • Specifications based on preferences and budget of client
  • Choices are endless
  • Higher Cost because of uniqueness,types of materials, and labor cost of more specialized subcontractors

Semi-Custom

  • Some Design Features based on builder preferences
  • Specifications solely set by Builder
  • Limited Choices
  • Moderate Cost because of limitations on materials and features available to customize 

Production

  • Fewer Design Features - designed for economy
  • Many times no choices or maybe 1 or 2
  • Low Cost due to limited choices and builder's use of economy materials
  • Same design and features built over and over again add to efficiency and economy

What is Design/Build?

Most custom homes require that the home be designed before building. Some builders have their own Designers on staff and offer Design services. Some Builders even have their own plans that clients can modify and customize to have a starting point. Some builders will build plans that the client purchases online (stock plans).

Other builders work with an independent architect or build plans the buyer brings to them that have been designed by an architect.

Working with Architects

Get information on the pricing before the architect begins; they should offer a consultation to explain how the process will work and how they will bill for their services

A complete custom home design will likely cost a minimum of $10,000.   Make sure your client knows this upfront. The time to design the home can also take a couple of months or more depending on the complexity of the design and the number of revisions needed. Also be aware that some Designers are not Architects and plans need to be complete working drawings and will need to be engineered before they can be built. A builder cannot build from concept drawings or may not even be able to quote a price accurately.

All About Dirt!

  • Know the Community and Restrictions - Get a copy of the Architectural Guidelines
  • Get a Topographical Survey if Possible - setbacks, easements, landscape buffers, waterfront buffers, protected wetlands
  • Look at the topography - slopes mean basements; gullies mean fill dirt; trees need clearing; all lots need to be graded
  • Where will the driveway and garage go? Cul-de-sacs may mean courtyard driveways and garages
  • Utilities - Well, community water, public hook-up; Septic or Sewer hook up; propane or natural gas; electric, cable, internet
  • Get the Builder involved Early - Will he/she do a drawing with the footprint of the house (Lot Fit)? Estimate of Site Fees?
  • Provide adequate Due Diligence Time

Just the Basics

Specifications & Pricing

  • Compare Apples to Apples
  • It's all in the Details
  • How will the House be Built?
  • With What Materials?
  • At What Price?
  • Price per SF - how relevant?
  • Allowances - Pros & Cons
  • Finishes can be 25% of the Cost
  • Who will help your client stay within their budget?

Pros

  • Easier for the Builder to Price
  • Less Risk for the Builder
  • Can get a quick price quote

Cons

  • Without Allowances a Builder Must Price All Line Items; Takes more time to do a Price Quote
  • The Buyer is Responsible for Keeping Selections within Budget
  • Difficult to Know Your Final Price for the Home before Contract
  • Difficult to Compare builder to builder

The Pros & Cons of Allowances

The Construction Process

An Overview

Site Preparation

Digging, Forming & Pouring the Foundation

Rough Framing

Adding the Roof

Rough Mechanicals - Plumbing, Electrical, HVAC

Insulation

Drywall

Interior Finishes

Trim, Cabinets, Stairs, & Painting

Exterior Finishes

Hard Surface Flooring & Countertops

Final Grading and Concrete

Mechanical Trims and

Fixture Installation 

Install Mirrors, Shower Doors & Closet Shelving

Install Carpet and Cleaning

Landscaping & Outdoor Living

The Final Walk-Thru

Construction Financing Basics

What's Hot

  • Larger Open Kitchens with Large Islands; Walk-in Pantries
  • Painted Cabinets
  • Den/Study/Office
  • Great Rooms
  • Flex and multi-functional spaces
  • Large Laundry/Utility Rooms
  • Homes are getting bigger again
  • Simple, clean contemporary decor
  • Spa-like Master Baths/large showers
  • White and Chrome in baths
  • Natural and eco-friendly materials
  • Outdoor Living
  • Energy Efficiency; LED Lights
  • Gray in everything

What's Not

  • 2 Story Great Rooms
  • Separate Kitchens
  • Common Granite
  • Formal Dining Rooms
  • Living Rooms
  • Master Tubs; if chosen - Free Standing
  • Huge Master Bedrooms
  • Oil Rubbed Bronze (depending on style)
  • Light Oak Hardwood
  • Heavy, Ornate Fixtures
  • Heavy moldings and trim
  • CFL & Incandescent Lighting

New Home Design Trends

Good sources are NAHB, Builder Magazine, Houzz, and Pinterest

Local Market Stats

for New Homes

Custom Home Building 101

By Kim Blanton

Custom Home Building 101

A Realtor's Guide to the Custom Home Building Process

  • 966