I am currently in the most stressful time of my life as I had decided to use my share of my inheritance in order to build a custom home for my wife, myself, and my future family. I had moved a few times in the past and I hate it. I didn’t want to take the typical starter home route as there are specific things that I want in the house and by the I found houses with the features, they were way above my price point.
Looking at the home, I wanted two specific things: radiant heat and 2×6″ studs for the exterior frame. The radiant heat pays for itself due to energy efficiency over the lifespan of the house. The 2×6″ studs provides an overall better frame to the house that makes it more resistant to the elements. It also adds a lot of value to the house overall. Picking a plot of land was the easy part, but as I am now in bid review, seeing the prices was an eye opening experience as to how expensive this process can be.
If you are looking at building a custom home with character, expect at least $200/sq ft as the minimum cost of the house. I live in a metropolitan area so that naturally inflates the cost of the house, so rural homes in non-blue states should be a lot more affordable. I will lay down some of the experience that I have learned from the process so far.
First you will need to pick an architect. This was pretty easy as we gave the architect a few photos of homes that we liked and he did a preliminary draft of the home. He did a very good job, but there were a few areas that needed to be changed in order to fit our needs. The first draft is only a draft and the architect works for you so make sure you make the changes now as they will be costly after the house construction starts. Expect around 10k-12k.
Second you will have to pick an engineer for site grading, septic design, perk tests, tree plans, and smaller miscellaneous things. This is a little more cut and dry than the architect and most engineers are around the same price so expect around 10k-15k for this process.
Once you have the house and site plans, the next part is to pick a contractor. Being in the construction business, although I manage bridge construction, I had a general semblance on how construction typically goes. I had went for the bids of 4 contractors and had them give me a price to build the house. There were a lot of differences between the 4 bids, and the only way to properly pick the right contractor for your job is to make all the bids line up so you are comparing apples to apples.
The first problem I encountered were bids without allowance. I had a low ball price from the first contractor, but as I started adding in materials, I had added around 40% extra to his price. It looked good on paper, but I had decided to make an Excel Spreadsheet and fill in his bid with some of the more detailed bids I had received down the road.
The second problem I encountered was how much of sharks some of these contractors were. I had one contractor already giving me ways to value engineer the home to reduce the cost. I was pulling my hair out at how much this house was going to cost, but it turned out the guy was super expensive and his bid with the cuts was more money than the other guys who didn’t have included. Funny how that works. The guy was an excellent salesman and used tactics like envisioning him building my home, taking the initiative, selling me on his programs that he uses, and basically going above and beyond during the bid stage to make me forget how expensive he is. I was able to identify a lot of these tactics during and after meeting with him so I kept an arms length’s distance away from him becoming overly involved as it would be harder to cut ties if I did not. He wound up being an extra 25% overall which was ridiculous. I can keep track of the invoices myself and save hundreds of thousands of dollars.
It is important to get multiple bids and use what some are including to seeing things you are forgetting. It is also important to see what is included in the Overhead and Profit for the Contractor. For example, the expensive guy wound up putting an 18% fee on everything. Other contractors allowed the material cost to be the material cost and they just put they’re % on the labor. This is important as it can save thousands of dollars over the life of the project.
You should also meet all the contractors in person and also gauge their responsiveness. The last contractor I reached out to wound up getting in the second most detailed bid in with the shortest amount of time. You can also see if the contractor understands that it is your home and not their home as sometimes they can be overly aggressive when it comes to changing the design of your home. I appreciate input, but at the end of the day, it is my house.
To sum it all up, come up with a square footage that you can afford. Always expect the price to be more than you anticipate. Get multiple quotes from different contractors from different sources. Meet with all the contractors and get bids as detailed as possible. Compare all the bids by adding in estimated allowances for the parts not provided. Talk to people who have experience in the custom home building process and learn from their mistakes. Finally, make sure you talk over how the project will be financed because you want to leave money at the end of the job to leverage the contractor to complete the smaller detailed parts of the house at the end.
This is an extremely stressful task, but I do expect the reward to be worth it. I hope this helps anyone looking into possibly building and designing their own custom home and will continue to provide advice once I sign on with a contractor and the groundbreaking commences.