How To “Building Guide” Florida
Why New Construction?
Many homeowners’ dream of a newly built home built by a local home builder because of all the great options that it offers. First off your new construction home can be designed the way you want it. This allows you to choose the floor plan and room layout including sizes to fit exactly how you want to live. When completed you will get that new home feel where you’re the first person to ever hang a picture or the scent of freshly built home building materials. There are so many more reasons to build a new construction home especially when the price is similar to an older home.
In today's modern time of manufacturing and development you’ll get improved low maintenance building materials that can last a lifetime. Then you have the safety aspect of today’s new construction using more advanced engineered and design methods. Below is a short list of just many related items that you can read in detail about in our Building Resource library;
- Indoor Air Quality
- Hurricane Proof with Fortified Building
- Maintenance Free Building Products
- Homeownership Cost Savings with new construction
- Lower Your Insurance bills
- Lower Your utility bills
- Zero Energy Homes
- New Construction Better Floor plan Designs
- And much more!
New Construction Cost Per Square Feet.
When considering a new construction home the price is often considered to be higher, but this is just a myth. Existing homes continue to raise in price because the supply and demand and since newly constructed homes take as much as a year or more to build most never consider it and stay with an older home that keeps increasing in price to match what new construction homes go for. If you were to compare in most markets the cost of a sixty year old home and a very similar size and characters of a new construction home you will find that the newly built home is in a range of 0% to only 2% more. After you take in consideration of the home ownership savings of a modern built home that would include yearly maintenance, insurance cost and monthly utility bill expenses you would find the older home is sucking your bank account dry.
So what can you expect to pay? The most common question that is asked is how much per square feet. This is like asking to buy a car by the pound. Price per square feet is so subjective to things like bedrooms cost compared to kitchen cost or is the garage and covered porch included in the price. In fact you can have the same total square footage house plan for two different designs and their cost could easily be $80 or more different in the Square foot price.
New construction house prices as noted above will be very similar to existing home prices if they were compared apples to apples. The bank appraiser and tax assessor is going to value a new construction home compared to what other local area homes sold for even if it’s newly built. Home builders aren’t going to sell homes higher than a bank would approve, but existing built homes love to keep up with today’s sold prices.
How long does it take to build a home?
Generally speaking the process to build never starts until the building permit is issued. This signifies that the home builder can now move forward. So this is a two part question, Pre-construction and actual construction.
Pre-Construction list of items and estimated time frames that the builder has no control of:
- Consumer interviewing and picking a Home Builder – 30 Days.
- Choosing a house plan. – 15 Days.
- Architect adjusting the plan and matching building lot info. – 30 Days.
- Bank / Appraiser reviewing completed plan and approving loan. – 45 Days.
- Building Department plan review. – 30 to 60 Days.
Actual Construction task is listed below in the Building Process section but the overall time frame often can range from 12 months to 18 months. Depending on weather, home design and building systems it is possible to compete a well-built home in 9 months but not common when a consumer is involved. One of the biggest reasons for longer time lines is the building inspection process; unlike most states Florida has a very detailed inspection list. This is often to your benefits as in some states they might have only four inspections for the complete home which could allow poor workmanship to never be seen. In Florida it’s not uncommon to have twenty five or more inspections. The lengthen time frame comes when a contractor has to pack up his job and wait to come back to finish after the local building inspector has a chance to review his partial work. Just one example could be the dry-waller has to have a screw inspection before starting to mud the drywall joints.
How to choose the right home builder.
First off make sure you get to met with several builders so you can better understand how each one works. Some might take the approach of pushing you into a special deal if you sign today and others will be there to help explain every step and be on your side to help and confirm you’re making the right choices. This interviewing process is the best tell-tell sign to know who you might be working with for the next several months. During this interviewing process make sure to ask good question, below is example of some;
- How Long have you been building?
- How often do you change sub-contractors?
- Are you licensed and insured?
- Do you have a sample building contract I can have?
- What banks have you done new construction loans with?
- Do you sub-contract large sections of task or individual items?
- How do you feel your pricing structural is compared to the market?
Once you have completed this interviewing process and ask simple questions you can easily tell who you are more comfortable with. The single most important follow up is contacting the new construction lending bank and confirming that they would approve them for building. Each new construction lender will also do a complete background check and confirm they are willing to share in the risk of building with your chosen builder.
New Construction loans
The new construction building process is common to pay the builder and his vendors as the home is being built; this is most commonly done through a construction loan. Not all lenders will offer new construction loans but the ones that do often follow the same process. First the lender has the building contract and new construction house plans appraised as if the house was built based on the information. A interest only construction loan is put in place that would allow the home builder and homeowner to request draws against the loan amount. Normally limited to five draws the bank would then send out the appraiser to the job site to evaluate what percentage of the job was complete for each draw. The Bank would then fund a portion of the total new construction loan that has proved to be completed. The bank would then charge the homeowner interest only on the total amount borrowed each month. At the end of completing the home the bank would require a final draw inspection, certificate of occupancy from the build department and any updated insurance. During this last construction draw the homeowner will sign documents transferring this interest only short term construction loan to a long term permanent loan with monthly principal and interest payment due.
Stock House Plans or Custom House Plans
Using stock house plans will often offer a consumer a better idea quickly on what type of home can fit on their building lot and price range. These stock plans have often been built several times and the fine tuning of making a perfect house has been perfected. Each plan has been design to maximize the use of building materials offering more home for the money and less in the dumpster. In addition every sub-contracted service like plumbing, air conditioning and electrical systems have been well thought out and planned for efficiency and value. Stock house plans are by far the best choice for many homeowners as they still offer some minor customization.
Custom house plans are very unique because either the building lot shape or the consumer’s individual needs. I Custom house plan can start from scratch or using ideas from several features of other homes the homeowner has fell in love with. In some cases the house can be so unique that even a standard building contract would have major modifications to cover the unique plan. Custom home plans can use materials and or complete systems very efficient or inefficient all depending on the issues of each plan's limitations. The cost of custom homes can vary greatly from just the types of materials, special design characteristics and even managing the job.
New Construction Building Contract
As you began building your home you the homeowner and the builder need to have common ground on what the finished job will be like. To do this two main items are used, house plans and a building contract. During your time interviewing builders it would be good to ask for a sample building contract to look over on your own time. A home builders building contract should cover the main things like price, time frame, job site address and special features but will also have many more items. Your building contract should be detailed enough to understand what your building and what types of material. Other parts of the contract should protect both you and the home builder if a problem arises.
A standard building contract will often cover building material details and will have a fixed price. In this fixed price contract you might see zero to just a few items labeled as allowances. These allowance items are because that exact item is unknown in enough detail to give the exact price. The allowance is a guess of the item and the homeowner will pay the difference of when the actual cost is known. A cost plus contract is not as common and only found in unique homes. A cost plus contract really protects the home builder to cover his cost as the homeowner can choose anything they could dream about. A cost plus building contract is really like having the whole house as a allowance with a guarantee that the builder will make his portion. The cost plus contract is very rarely the best option for homeowners and often the construction lending banks will not except this for their loan approval.
Picking the Perfect Building Lot
When building a new construction home if you don’t already have a building lot then let’s start looking. First off you need a good real estate agent or home builder that is familiar with the new construction building process, the last thing you want to do is buy a lot that can’t be built on. Besides the normal items most would consider like location to shopping, hospitals, schools and so on a new construction building lot also has unique concerns.
- What are the setbacks and lot restrictions? Each municipality will have limits on how close to the side yards and front /rear you can build. These limitations can also include maximum heights, zoning requirements and many more.
- Will there be more lot prep expenses? Lots with trees, structures, hills or dips in the land all have additional cost to prepare the lot for a new structure, in addition some obstacles like existing homes, underground service utility pump systems and certain trees may not even be allowed to remove.
- Is the Building lot in a flood zone? Building homes in flood zone area require extra insurance and must meet flood zone special building requirements which require elevating your home as a minimum.
- Public service utilities. Does your lot have access to electrical grid system, sewer plumbing system and fresh water supply? Each of these services can cost you thousands to get them to your lot or even make the lot unbuildable.
- Unknown extra lot cost. Florida has impact fees that are charged for every home that is built; these fees cover items like lot owners portion of the original service structural of the local services. Things like Fire station, transportation, sewer water and others could add ten thousand or more in cost when the building permit is issued. But in some cases if a home was once located on this lot before, these cost could be much less or even no cost.
Designing your perfect new construction home
When you’re designing your dream home a home builder might give you a option to sit with a architect or pick a stock house plan. No matter your choice you pay for it. When sitting with the architect you will often see the overall house price increase five thousand or more to cover just this process. Furthermore, the architect's main goal is building you what you want not keeping you in budget. Since architects are not home builder they have no idea the exact cost of all the things you ask for so in no time your building cost could greatly increase. As example moving an exterior wall 4” out so you can fix your idea bedroom size could cost you ten thousand or more because lumber is sold in two feet increments and that 4” just past the next sized lumber. A architect can do anything on paper but if you want a valued engineered plan leave it up to the home builder to work directly with the architect so they can discuss structural issue together and create a value engineered design.
If your new construction home design takes you down a stock house plan path no worries you’ll still have hundreds of choices to make. Things like types of exterior and interior finishes, system upgrades, expanding square footage of home and so many more.
The Building Process
During the course of having your home built it will under go a series of steps that will transform before your eyes. Below is a simplified step process;
- Building Lot Prep and Foundation
- Rough Framing House
- Rough HVAC, Plumbing and Electrical
- Install Insulation
- Drywall & Painting inside
- Stucco, Painting and concrete driveways outside
- Install flooring, cabinets and countertops
- Finish trim, Plumbing, lighting