5 Biggest Mistakes on My Custom Build (So Far…)

Hi! It’s been quite a while since I have posted… we have been busy busy! There is a lot to fill you in on. The short story is we closed on our lot in August 2020 and spent quite a bit of time in the planning stages (highly recommended and I STILL didn’t plan for everything). It took months to get through the architectural review board (ARB) and to get on the same page with our first builder, so it wasn’t until April 2021 that we broke ground. The muck and fill process took about a month, then the foundation block-work and slab took another two months. By July 1, 2021 we had a complete foundation (yay!) and we were completely and totally frustrated with our builder and feared we had made a huge mistake (yikes). As a result, the project came to a screeching halt July 2021 and let me explain why…

1. I didn’t do my due diligence on my contractor.

We knew we wanted to live in this neighborhood since we moved to Charleston. We drove through almost monthly to ogle the outside of these beautiful homes. Finally, we mustered enough courage to go look at the inside of some of our dream homes with our realtor. We instantly fell in love with a brand-new spec home the first day of looking. We made an offer, were outbid by another family, and were BUMMED. We slept on it a few weeks, realized it was a good thing we lost the house, as we found out we were pregnant with our third child a few months later and would need more space. But we still couldn’t stop thinking about that house. We approached the builder and asked if they could do a custom build if we bought our own lot in the neighborhood. They agreed, we signed a contract, used their existing plans with a few modifications… What could go wrong? LOTS…

We ultimately terminated our relationship with this builder just short of a year into the process. Without getting into everything, communication was lacking and we felt they were more accustomed to building spec homes than custom builds (nothing wrong with that, just not what we were looking for). I also highly recommend you hire a construction attorney in this situation. It saved us thousands of dollars and ensured we kept our foundation warrantied, more than making up for the investment in an attorney.

So July 1, 2021 we had no builder and a completed foundation with no next steps planned. But we felt a HUGE weight lifted. We knew we made the right call. Then we went into research mode. We asked several of our friends who built homes and we posted on the neighborhood social media page asking for builder recommendations. We interviewed NINE builders and came up with a list of questions that we wish we had known the answers to before we committed to our first builder. The questions below were things that became important to us throughout the first year of the project… things we wish we had asked before signing that first contract. Your list may look different!

2. I didn’t do my due diligence on a construction lender.

My goodness have I learned some lessons about due diligence. You are likely going to need a construction loan unless you are fortunate enough to build your home all cash, then more power to you and skip to #3! Most of us can’t… so there are some things you need to know about construction loans before you google “construction home loan” and click the first bank you see.  

Like conventional loans, you need a good credit score and the bank will look at your income to determine the amount you can borrow. Your rate will likely be a little higher than a conventional mortgage. You will likely have to pay between a 20-25% down payment of the projected cost/appraised value and you can usually use the lot (if already purchased) as collateral. You will also need to submit all the building plans, the permit, and the builder information before closing (so you need this information ahead of time!). The bank will order an appraisal to ensure that the value of the home is in line with the building budget.

Before you select a lender, ask your builder who they like to work with. This is the EASIEST way to make a good decision. The construction loan is a three party relationship, not just between you and the bank. Your builder needs to communicate with the construction lender frequently and needs to agree on the draw schedule (when, how, and how much your builder will be paid) ahead of time. Our first construction loan fell through at the very end (after weeks of communications and paperwork) because the draw schedule was “backloaded”, meaning that the we, the homeowners, had to front a lot of the cost and would be reimbursed later… no thank you!! Although, keep in mind you are likely going to have to front some costs (the builder’s risk policy I mentioned above, flood insurance, architect/designer plans, permits, etc). This is a discussion you should have with your thoroughly researched builder – they can help!  

3. I didn’t pay close attention to my exterior plans.

This may not matter if you don’t have a strict ARB, but we were in such a hurry to get ARB approval, we submitted the plans without taking a VERY close look at details. Once we started building, I realized the porch railings weren’t exactly what I wanted, I could have done something more unique with the siding (look at vertical versus horizontal, look at materials), and I would have changed the back stair orientation. Try to get as familiar as you can with your plans. Show them to friends, family, and anyone with building experience. Ask questions!

4. I chose trusses over stick framing (rafters) to minimize cost.

Well it’s not just about cost. While trusses tend to be less expensive, as they are prebuilt in a factory and decrease labor time in the field, the main drawback is the loss of space. With stick framing, you can create more open spaces: vaulted ceilings, half stories, and attics for storage. We finished our third floor as a bedroom and play-room, further decreasing attic space. Our trusses have also been a challenge for centering light fixtures and running HVAC throughout the home. It’s definitely worth a discussion to determine what is best for your home!

5. I didn’t want to be a bother.

At the beginning of the build (particularly with our first builder), I felt hesitant to change my mind, nervous to ask questions, and pressured to make decisions quickly. This is a marathon, not a sprint. You need to be comfortable asking questions. A good builder is accustomed to answering these questions for homeowners and being a liaison to all the subs. There are LOTS of decisions and, with that, you are going to change your mind a lot. That’s okay. Sleep on big decisions. You will know in your gut when something is right and wrong. Many vendors (cabinets, decking, flooring) have samples that you can take with you. Get the biggest piece you can find and take it to your space. Look at it inside, outside, your current house, your new build. Put your cabinet sample on your flooring sample. Put your tile sample next to your hardwood sample. I keep all of mine in a bag in my car! I also used to feel nervous going out to the lot all the time. I didn’t want to be in the way or annoying. Now, we go almost daily and find things to discuss with our builder or subs EVERY SINGLE TIME. We are able to catch small mistakes before they become catastrophes (saving time and money!!). Stand up for yourself, learn as you go, and lean on your builder to help you make these big decisions!