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How Does It Work?
When you don't already have land to build on, there are two steps.
First, we need to find you some land or a lot to build on. So this process won't be much different than if we were trying to find a home. Where do you want to be? What schools are you wanting to be in? Do you want to be in a Home Owners Association? We can figure out all of this at our meeting.
Second, we need to find you a builder. We work with some great builders, so we are happy to help you find the one that suits your budget and your location.
Money.
The money portion for finding land and building is broken down into two parts:
Buying Land
When you are buying just land to build on, there are several loan scenarios. Your specific banker/lender can lead down the path that is best for you:
- Loan: most banks consider vacant land an investment and usually require a 20% down payment. (check with your lender for accurate requirements, don't have one, we have some to recommend).
- Cash: well thats pretty cool if you have enough cash to cover the cost of the land. You're definitely in the minority of people who can.
- Builder: if you already have a builder in mind, sometimes the builder is willing to purchase the property, and build your home all on their dime (and charge you carrying cost of course) to make it easier on you. Plus they control the whole situation including the land.
Paying for the House
If you have to buy your lot with a Loan or with Cash, then here are some scenarios When building a home with a custom builder on your own lot there are three ways builders usually like to handle funding.
- If you own the land, with no mortgage, they will sometimes require that you deed them over the property, and they will use that as collateral to build your home with their own money. Sometimes builders would rather use their banks or cash to build with, instead of going through the headache of using a buyers bank.
- If you don't own the land outright, you can't deed it over, because most likely the bank won't let you. In this scenario the builder may require you to put down a sizable deposit of 10-25% of the gross cost with them as collateral, and the builder will use their financing to build you home. It seems like a lot of money, but it's not if you are the builder, building something custom on land you don't own.
- Let's say you don't want to or can't deed over your land, and the builder wants you to get your own financing. This is not the most common method, but can happen. In this case you'd just go to a bank and get a construction loan. (Read "How Does Building Funding Work" post here).
What We Can Do
To Help.
This is a scenario where we can bring a lot of value. From finding the land, to running pricing to make sure you stay in line with the current neighborhood/area pricing, to finding a builder, to walking with you through the process. Often times we can get paid from the builder for brining you to them. What's better than free?
Start Building.
Ready to get your specific questions answered? Next steps is to get together to find out all the ways we can help you.