If you've built your house...

[BlsdMama]

Tell me about the process if you did NOT sell your house first.
We know our house will sell. We bought a HTF acreage in a small town with excellent schools. The commute is twenty minutes and the city is growing towards us cutting that time down. When we bought it, it was 20 years old - time for it to need EVERYTHING. We've replaced every appliance, AC, furnace, garage doors, well pump, you name it. Acreages that have come up sell in days. We are seeing no downturn in the market rn. (My dd is a realtor.)

But, obviously my house is accessible. We cannot rent and any home we buy would need immediate renovation. So building might make sense?

[Guest]

Are you saying if you sell your house but build on your acreage lot? 
 

Usually, people I know rent back their current house from the buyers while the build finishes. I do think building for accessibility is a great idea if you can make that happen. 

[Dynamite5]

We found land, chose a builder that built custom homes, planned the house with an architect and the builder, signed off after the plans were completely done and built the house with a construction loan, moved in, sold other house. Is that what you were wanting? The general framework of how the process worked?

I will say that I would hate building now with supply chains still holding things up. We were super picky, but if you can be flexible and go with the flow when you can't get things you thought you wanted, it could be a great thing to plan your own house.

[kristin0713]

We did sell our house first, but in retrospect, we didn't have to. We didn't realize that with a new construction loan, we would not have to pay very much until the end. I really don't know the details of the money because DH handled all of that. All I know is that we really did not have to sell first and we would have been totally fine to start building and wait to sell. That is, in a good seller's market where the house sold fast the way it did, not like years ago where it took us months and months and months to sell our townhouse. 

The other thing I will say is that we had a fabulous experience building our house. I know there is another poster here who was building at the same time as us and she had a horrible time. Our experience was completely different. We broke ground in January and we were moved in by June. Our builder kept to his schedule almost to the DAY. It was amazing. Apparently, he is known around here for that. Our windows ended up backordered but they still arrived in plenty of time. Now the experience was not perfect, and there are things I would do differently if I ever had the chance, but all in all it was great and absolutely love our house. 

[Bambam]

We did that years ago. It was in a planned neighborhood, you could select from various builders who worked that area, you selected house plans from their availability (some limitations like the same house plan had to be no closer than 3-4 lots, etc).  We were able to negotiate some changes to the floor plan (rearranged the master bath, increased the size of the shower, etc). At that time, there were no shortages, so building timeline went along pretty much as it was supposed to. But this was a neighborhood where the builders were already working on other houses.  We did encounter a mistake (their's) early in the process which was such that it would have been impossible for them to honor the contract we all signed, but we found a mutually accepted compromise, but that was a stressful short period of time. There were limited things we could select (flooring, wallpaper, paint color, etc) vs. everything, but even those selections were a major headache although the builder did provide a decorator to help you make selections. This may not be a problem for others though. My parents built a house in the country from scratch - and I can remember my mom struggling with so many decisions (round or oval toilets, light fixtures everywhere, which faucets, etc). 

We stayed in our current house. It did take a while to sell after we moved though. We knew that would most likely be the case. 

Edited April 4, 2023 by Bambam

[TechWife]

We did this when we built the house we are now living in. We closed on the new house, had some minor work done on the old one (flooring, paint, new door knobs, power washing, & a few other small things) and then put it on the market about a month later. It sold within 48 hours and the sale closed three weeks later. We are in an area with a housing shortage. After we held the mortgage on our new house for six months we re-cast it to pay it down with the money we made on the sale of the old one.

Neither the custom builders nor the production builders seem to be having supply chain problems here anymore. There are two 5K sf houses going up across the street that were started in August 2022 and one will close sometime  this month (the landscaping usually goes in very close to the end & it went in last week), the second will close in May. We have a lot of apartments going up around here as well and they aren’t seeing delays at this point. 

[Katy]

We haven't done that, but we bought THIS house from someone who did.  I called the realtor for a listing that had already accepted an offer, explained we wanted to move to this area because of the schools & accommodations for my youngest two kids. I explained I wanted a bigger house with a bigger yard, here was DH's budget, here was the more realistic budget I was thinking of, we didn't need to sell our other house to buy, we were extremely flexible about dates because DH is now able to work fully remote, Please keep us in mind if she found something.  After about six weeks she got back to us.

She had a client who hadn't listed yet.  They were building and not quite sure when they would be able to move, and apparently due to her family's special needs the previous owner was even more germ-phobic than I was, also the pandemic had pushed back closing several months already. We loved the house, we loved the location, we loved the huge yard and found a company to put in a fence ASAP.  We signed a contract when they got a letter from their contractor with a final closing date. We arranged to close the day before they closed but rented them back the property for up to 8 weeks (I think it ended up being 2). The realtor had a standard form for this that included details like them continuing to carry homeowner's insurance for the rent back period. We were out of state but had local friends to walk through on the closing date for us, which we were able to do remotely.  I think we got the house for about $50k under retail because we were so flexible.

[PeterPan]

Guess I don't understand the question. We built our (current) house, moved in, then sold the old house. We already owned the land so it worked. Building a house can be massively stressful. You're probably going to find a lot about accessible house design so you should look for house plans that already have it built in or an architect who is good at that. I had had some health problems, so I required uber picky things (wide halls, wide doors, all main on level with no steps, etc.). The architect didn't listen very well, so he ended up redrawing things to make it happen. The whole process is like that, one thing after another where people don't listen or don't think you meant exactly what you said. People would install noisy fans when I require QUIET fans, on and on. 

My best pro tip? Haha, go to Pottery Barn and get their "in colors" fan if they still do that (they do on their website at least) and pick all the colors for your house from it. Then you're assured everything goes together. Color was my nemesis, oh my. Now my colors are awesome but I did it the hard way. LOL

[BlsdMama]

13 hours ago, Dynamite5 said:

We found land, chose a builder that built custom homes, planned the house with an architect and the builder, signed off after the plans were completely done and built the house with a construction loan, moved in, sold other house. Is that what you were wanting? The general framework of how the process worked?

I will say that I would hate building now with supply chains still holding things up. We were super picky, but if you can be flexible and go with the flow when you can't get things you thought you wanted, it could be a great thing to plan your own house.

Yes - this exactly. We could swing two mortgages in our budget, but I don’t love when things are tight. We are taking a terminal illness withdrawal from one of my life insurance policies this summer and that would make me more comfortable with building. The questions are what does a construction loan look like and timeframe for a custom build? How did you decide between builders? We have friends who are contractors and they have built a few homes and I’m wondering if this would be wise… they did a beautiful job on our bathroom. 

[Carrie12345]

1 hour ago, BlsdMama said:

Yes - this exactly. We could swing two mortgages in our budget, but I don’t love when things are tight. We are taking a terminal illness withdrawal from one of my life insurance policies this summer and that would make me more comfortable with building. The questions are what does a construction loan look like and timeframe for a custom build? How did you decide between builders? We have friends who are contractors and they have built a few homes and I’m wondering if this would be wise… they did a beautiful job on our bathroom. 

Loan structures can vary widely.  
Financing with our builder would have required a larger down payment and full, regular loan payments. Financing with our local bank was a smaller down payment (which our deposits to the builder were credited towards) and interest-only on payment drafts until completion.

Our builder was mostly chosen by availability, since many builders were turning new clients away. The builders who were turning away ended up with 6-9 months turnaround during the height of Covid. Ours wound up somewhere around 15 months. Their idea of “availability “ was a stretch.  
The second reason for our choice was their plan choices. In our area, some companies focus on specific types of architecture that I don’t love. Some are full custom, some are turnkey, ours was somewhere in the middle.

We did have to financially qualify to carry both homes comfortably in order to do it without listing first. For us, that might not have worked with a normal interest rate, but the rock bottom rates made it smooth sailing.

[alysee]

We found land, chose a local builder that built custom homes, planned the house with an architect and the builder, signed off after the plans were completely done and are building the house with a construction loan. We are selling our house this summer for an expected move in date around November 1st. We don't have to sell our house yet but wanted to take advantage of the summer market.  

[alysee]

Also, we have found that if you pick the big things right away(floors, windows, doors, exteriors) right away by the time you need them they should be there so we haven't had to wait for much or even change our plans because everything was ordered up front.

[TechWife]

2 hours ago, BlsdMama said:

Yes - this exactly. We could swing two mortgages in our budget, but I don’t love when things are tight. We are taking a terminal illness withdrawal from one of my life insurance policies this summer and that would make me more comfortable with building. The questions are what does a construction loan look like and timeframe for a custom build? How did you decide between builders? We have friends who are contractors and they have built a few homes and I’m wondering if this would be wise… they did a beautiful job on our bathroom. 

Our builder carried the construction loan. We were not involved with that. We just had a down payment. We’ve had two houses built and they were both handled this way. 

[kristin0713]

11 hours ago, TechWife said:

Our builder carried the construction loan. We were not involved with that. We just had a down payment. We’ve had two houses built and they were both handled this way. 

I think this was our situation as well. 

Re: how to choose a builder - references. 

[Forget-Me-Not]

15 hours ago, TechWife said:

Our builder carried the construction loan. We were not involved with that. We just had a down payment. We’ve had two houses built and they were both handled this way. 

This was how ours was handled as well. We put down some earnest money and then bought the house from the builder at the end.

Re: hiring friends. I would be very careful. Don’t let the friendship cause you to be relaxed about things like contracts and expectations. We had an overall great experience with our builder, would 100% use him again, BUT there were absolutely times when we had to speak up and say things and advocate for what we wanted. One of the subs lets something slide or does a shoddy job? Your builder should be on it for you, not putting you off or hoping that you’ll turn a blind eye because you’re all friends. 
 

[Momof4sweetkids]

This might not apply to your situation but in our county it'll take us 1.5-2 years just to get approval to build before we can start building. Our county is known as the worst in our state though.

[katilac]

On 4/5/2023 at 4:55 AM, BlsdMama said:

Yes - this exactly. We could swing two mortgages in our budget, but I don’t love when things are tight. We are taking a terminal illness withdrawal from one of my life insurance policies this summer and that would make me more comfortable with building. The questions are what does a construction loan look like and timeframe for a custom build? How did you decide between builders? We have friends who are contractors and they have built a few homes and I’m wondering if this would be wise… they did a beautiful job on our bathroom. 

timeframe for a custom build? Considerably longer than what they tell you. 

We have friends who are contractors and they have built a few homes and I’m wondering if this would be wise… A thousand times no.