@motivatedsister welcome to the group

Thank you for telling us your story - A miscarriage sounds so sad, but at the same time it's know to know that you're certain you want a family. Apparently there IS new research showing that the "age" is more than 35 years old, it's just under review.

I'm an old fashioned type person too haha. I built a house with my new husband (then boyfriend) and told him we had to be married before it was done or else he'd be paying a mortgage on a house while still living with his mom and dad hahahaha. I'm nice like that lol. Started building in October, engaged in December, married in July and moved in August lol. So I know for a fact a wedding doesn't have to take 1 - 2 years to plan unless you want it to hehehe.

You're welcome to join in the spreadsheet challenge if you'd like Just fill in what you can.

@NatashaLP2014

This is going to be a long post lol! You have been warned. Annnnd... it'll probably be way too overly MUCH for what you were asking HAHAHA. But... well... I like this stuff, love talking about it SO much! So you get the whole thing hehehe.

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section 1 - the answer to the question you actually asked

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Honestly, our home building process was really simple. We went to a builder and picked a cookie cutter home to build, and paid a cash deposit of $31,000 (which was later considered as part of the down payment). $30,000 was the deposit on the home, and $1000 was deposit on the land. After that, it was treated as a regular home purchase, with the contractor being the seller and us being the buyers. A realtor even helped us the entire time. We didn't have to finance the home until it was built, deemed substantially complete by the bank's representative, and turned over to us from the builder. At this point, we paid the down payment LESS the deposit we made before and got a regular mortgage.

If you already own a home, you could finance the $31000 (or however much it would be) against your current home, take a line of credit, or pay cash. Lots of options depending on how you like to manage your money. And then hopefully the rest will come after you've already sold your current home.

So essentially, the property and house belong to the builder until it's complete. We didn't pay the full down payment or get a mortgage until a few days before we moved in. We were able to be involved in the finishing selection during the build (floors, cabinets, light fixtures, room options available from the builder, etc) so we still got what we wanted. Plus we were able to shop the really good sales for furniture since we had a long lead time! One key thing to note is to make sure it is a fixed price contract. In other words, they can't adjust the price of the home between the time you sign the contract and the time they turn over the house (of course they can add more money for design changes, but not for interest, labour, escalation, etc). Also, you can still "make an offer" on new build homes, you don't just have to accept their price. We bid $7,500 under the asking price from the builder and they still agreed. That being said, new homes don't get as much leeway as existing homes. Where you could bid $20,000 less than asking on an existing home, far less would be acceptable for a new home. We happened to build during a time of low demand and my realtor said that $7500 off was more than she'd ever seen on a new home. Usually it's more like $2000. These amounts depend on the market you are shopping in too.

The only hard thing (IMO) about building is coordinating selling your current home. A builder rarely meets his estimated completion date for the home so that can leave you stuck in the middle - you might have sold your current house based on the date, then found out the contractor needs 3 more months to finish your house, leaving you homeless. For us, it was only 3 weeks (and I was simply not renewing my apartment lease so that part was easy). We ended up moving twice. Once out of the apartment and into my parents' basement, and then again 3 weeks later into the new house. So you'll want to have a back-up plan that doesn't involve a hotel. Because if they're 3 - 4 months late you might have eaten through the down payment You also want to avoid owning two homes at once though. Two mortgages doesn't sound fun. But that is the case with ANY move when you already have a mortgage on your current home.

One thing I remember my husband mentioning is that he wouldn't have been comfortable building a home without me. He liked that I used to design buildings and knew how the build would go (heck, I did secret design calculations on my house and kept that in my back pocket). It gave him a lot of comfort. I know a lot of people who are not in the construction industry and didn't have any problems, but it's something to think about.

If you take the same route we did, I know that there are builders who build accessible homes. You might have a little more struggle finding one or fewer layout options or may need to choose a custom home builder. A custom home builder should still be able to structure the contract in the was we had ours though. And to be clear, ours was a standard contract, in fact, the most common way people do it in my city.

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Section 2 - answers to questions no-one asked

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Below is what I would watch out for if you choose to do it differently than we did. to be clear though, I didn't do it either of these ways so I might be wrong in parts of it, but these were my concerns anyway. And also - the things I've noted below are RISKS and would not necessarily happen to you. In fact, hopefully they're rare. But for me, it was important to consider them and they strongly pushed me into doing it the way we did. Plus both my brother and sister build houses using the same contract structure we did so I could ask them for tips.


Other than the way in section 1, I am aware of two other ways of building a house:
1) Own the property, and hire a general contractor (GC) to manage, design, and build the house.
2) Own the property and choose to be the project manager myself and hire a general contractor do design and build the house.
... ok, and option 3) would be to just basically build the house myself but I'm not going there lol.

Both options 1 and 2 have potential to be cheaper than the way we did it - management costs can make up a good portion of the non-material/labour costs of the home (lol I'm totally thinking "indirect costs" here... which just reminds me of work lol. Don't mind me, Mrs. Cost Estimator).

Also for both options, you'll need a home builder's mortgage. This is a kind of mortgage you get where the bank's representative will come and do inspections and process the mortgage in pieces based on how far along the project is. So say the house 25% done, they'll award you around 25% of the mortgage so that you can pay the contractor. You start making payments on that portion of the mortgage right away. You hour may not be complete for a while yet though (like 9 months or something). But you are not making mortgage payments on the full mortgage of the completed house's value.

For option 1)

For example, if our house had burnt down while it was being constructed it would be my responsibility to have builder's insurance for that. Any claim I made, I would have to give that money to the contractor to rebuild. But - how can you be sure that you'll get enough money from the insurance claim? Other things that would be included in our responsibility if we owned the land during the build would be insurance for injuries, theft, etc.

Also, for this option (and option 2) I would have to be so diligent in my contract review (meaning I'd definitely need an involved lawyer - more than just the typical house stuff) - when the build process is done this way, there are cases where the contractor may end up putting a lien on your house - if your financing runs out, or the payment plan isn't followed, or if they are making claims against you during the process as a few examples. This can cause super long delays (we're talking months to years).

Also keep in mind you're making payments for the land during the entire build process, plus paying property tax (though on a low cost property since there are no buildings) for land you can't use yet.

For option 2)

If I had also decided to act as my own project manager (I would be even more involved in the process than option 1 which can save a lot of money), in addition to the risks for option 1, I would have had the risk of potentially needing to paying sub-contractors if the general contractor decides not to pay them (even if the GC doesn't pay because the sub did shoddy work). This kind of thing really scared me off from doing it this way (didn't need to be worried about bankruptcy, lawsuits, and court dates).

I had an extra liability concern because I am an engineer (disclaimer - home building is not my area of expertise so please research anything I've said separately). If something went SUPER, SUPER wrong on the site, I was concerned I could have been fined, lost my designation (and job)... maybe gone to jail (that would be extremely unlikely though).

So to me, the best option is to have the builder own the land and house during the build.

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TLDR?

Hahahah oh man.

ETA: Holy *kitten* this was a long post.

Ahhh ok well if it's a rental property, more mortgages are fine! I meant if you're not renting them out hahaha.

I'm surprised you read all that hahahahahha

I can definitely understand wanting to move closer to your daughter's care facilities. 5 hours is a long way.