Thinking about building a custom home? If you’re like most people, the idea sounds wonderful—a dream come true—but it may also feel overwhelming. So, to better help you understand the steps and timing of building a custom home, we’ve broken down the process into five bite-sized chunks: 1) securing the money, 2) finding the land, 3) planning and designing, 4) permitting and getting the loan approved, and 5) building!
1. Securing the money (2 to 4 weeks)
You don’t actually need the money up front, but it is smart to get prequalified with an experienced lender before you set off on your custom home–building journey. Meet with a few lenders and discuss your goals. Let them know that you’d like to purchase land, secure a construction loan, and then finally have a permanent loan for your home after construction is complete. Your lender will let you know what information is needed for you to prequalify for a loan and will also help you determine how much money you can borrow and how much cash you’ll have to contribute to your project. Depending on how quickly you can compile the data and documentation for the lender, most banks can issue a prequalification within a matter of days or just a few weeks. If you are building in the greater Colorado Springs area, we have a list of preferred lenders. If you’re not sure how much a custom home costs or how much you should budget for your project, check out another post called How To Budget For a Custom Home.
2. Finding the land (1 to 6 months…but maybe longer!)
Once you have financing in place, you can begin searching for the perfect piece of land to build your new home on! Finding the right lot for your dream home could happen in as short as a month, or you could be in the hunt for months, or even years, before you find “the one.” I suggest hiring a real estate agent who is familiar with the land market in your area. If you are working with a good agent, you could be looking at land within a few days and making an offer or writing a contract on land right away. This is another great reason to have your financing secured before you start looking for land—you will be able to act as soon as you find the right lot. A typical escrow period for land (the time between going under contract and closing) is about 30 to 45 days. Make sure that you negotiate enough time to do proper due diligence (soil testing, well permit, etc.) before closing. Involving your builder is recommended because then he or she can advise you on the site conditions, utility infrastructure, and overall suitability for building. If you are looking to buy land in the Front Range, we have an in-house Realtor who would love to help you find the perfect lot! You can connect with our real estate team by clicking HERE. We have also prepared a Land-Buying Checklist to help you know what to look for and what questions to ask.
3. Planning and designing (4 to 6 months)
So now that you have financing lined up and the perfect lot to build on, the next step is to come up with the perfect plan! The planning/design stage can be broken down into floor plan design, site planning and engineering, material and finish selections, and lastly estimating/budgeting. The truth is, the planning process is probably more important than the building process. A detailed, well-thought-out project will be easier and faster to build and will result in fewer changes and fewer time-consuming mistakes and costly redos. Our planning/design phase looks like this:
Step 1: Needs and wants discovery meeting, resulting in a project summary document (1 to 2 weeks)
Step 2: Design agreement
Step 3: Floor plan/architectural phase (6 to 10 weeks)
Step 4: Site planning and engineering (4 to 6 weeks)
Step 5: Material and finish selections (4 to 6 weeks)
Step 6: Budgeting and estimating (3 to 4 weeks)
Total planning and design time line: 18 to 28 weeks (4.5 to 7 months)
4. Permitting and getting the loan approved (4 to 6 weeks)
Our design process culminates with a budget review meeting in which we reveal and review the full design package: plans, selections, and budget. As soon as we sign the construction agreement to build what we just designed, two things will then happen simultaneously: 1) We provide the plans, specifications, budget, and contract to the lender, who then orders a preconstruction appraisal. The lender will do their final underwriting and prepare the loan to close. 2) We submit for all permits, including the building permit and the septic permit (where applicable). This process usually takes 30 to 45 days.
5. Building (6 to 9 months)
The building time line can vary depending on the season, weather conditions, site conditions, and size and complexity of the home, but is typically 6 to 9 months (from breaking ground to move in).
To summarize, the process of designing and building a custom home usually takes between 12 and 18 months, from start to finish. If you’re interested in learning more about Gowler Homes’ design and build process, click HERE.