| Building a Log Home? Don't make these | | | | up will require hundreds of decisions to be made. |
| mistakes….. | | | | Many times, those decisions need to be made quickly. |
| Research suggests that building a home can be one | | | | If the electricians are there and have a question, |
| of life's most stressful events. Your dream of building | | | | remember that they are waiting on you to make a |
| that perfect log home, on that perfect lot can easily | | | | decision and likely there are other contractors |
| turn into a nightmare. I worked in the real estate | | | | working on the house waiting for them to finish. |
| industry for over 15 years. I've seen a lot of | | | | Holding up one decision can hold up the entire |
| heartbroken homeowners who realized to late that | | | | process, sometimes for a good length of time. Think |
| their dream was crashing. Most often the disaster | | | | of the building process as a well orchestrated play. |
| could have been prevented if only they had done | | | | Everyone has their part to do and many times they |
| their research before signing any papers. Here are a | | | | can't do it until someone else has done their part. |
| few mistakes that I've seen over the years that just | | | | Don't get me wrong, sometimes there are |
| might save you some money and a lot of time. | | | | catastrophic circumstances and stopping the building |
| Maybe even prevent a headache or two: | | | | process is necessary, but many times it's not. Making |
| 1. Only work with reputable companies: From your | | | | good, quick decisions can be the difference between |
| lender to your builder, researching the companies that | | | | your suppliers getting their money on time or not, |
| you are bringing on board for your project can save | | | | and that in itself can be catastrophic. |
| you money and headaches. | | | | 3. Take frequent road trips: |
| The Lender: | | | | It's your home, and ultimately your money. Take the |
| Don't just assume that the bank you've always done | | | | time to go to your building site and make frequent |
| business with is the one you want to borrow from | | | | inspections. It can save you a lot of heartache in the |
| to build your new home. Do check out their loan | | | | long run. Check the workmanship, make sure it's |
| products but don't forget to apply at 2 or 3 other | | | | what you expected. Check the design, is it what you |
| institutions. Fees can vary as much as several | | | | agreed on? Check the details, are they what you |
| thousand dollars between lenders and there are | | | | asked for? Did they put in a tub and shower instead |
| literally hundreds of loan products out there that | | | | of an octagon shaped garden tub? Maybe you |
| might meet your needs. Always check the fees on | | | | changed your mind on the tub early in the process |
| the Good Faith Estimate that you receive at the time | | | | and told your realtor or builder. Maybe you even |
| of application. An easy way to compare lenders is to | | | | signed a "change order" form. There, you thought it |
| check the APY (Annual Percentage Yield). Every bank | | | | was all taken care of, right? Not |
| is required to give that percentage to you. Basically, | | | | necessarily….It's so easy for |
| it's the real cost of your loan. The higher the APY, | | | | miscommunication to happen when there are many |
| the higher the cost of borrowing from that institution. | | | | people involved in a project, and building a home is no |
| The APY rate.is not the same as your note rate. | | | | exception. Take it upon yourself to double check the |
| Your note rate is what your payments are based on, | | | | realtor/builder. If they made a mistake it's a lot easier |
| the APY is the cost to you of borrowing. If you are | | | | to fix things early in the process than to wait and |
| thinking of being your own general contractor for the | | | | then play the blame game. Don't wait, and don't |
| project, the smaller, hometown banks are usually | | | | assume anyone cares about your new home more |
| easier to work with. You are going to be in contact | | | | than you do. Remember, it's their job, not their home. |
| with them regularly throughout the process so make | | | | 4. Don't sign that stack of papers unless: |
| sure you can get in touch with them easily ie: you will | | | | Don't sign unless you understand what you are |
| need to submit invoices to receive draws on your | | | | signing, the house is completed the way you agreed |
| construction loan. Many banks have their own | | | | on and there are no outstanding bills for work done |
| process for receiving your draw money so make | | | | on your new home. At the closing, there will be a |
| sure you thoroughly understand their process and | | | | mound of paperwork for you to sign. You have the |
| make sure you can work with it. Working with a | | | | right to read every document, either at closing or |
| lender across the country might not be the best | | | | before. Ask the title company to get you a copy of |
| thing for your money and your sanity if you're the | | | | all of your closing documents 24 hours before closing |
| general contractor. | | | | and then take the time to read them. Ask questions |
| Above all, read before you agree. | | | | before you get to the table. Sometimes it's not a |
| The Builder: | | | | quick thing to fix an error so the more you know |
| Work with a reputable builder that you can readily | | | | before closing, the easier it will be. This is your loan |
| get in contact with. Here are a few good questions | | | | that you will be paying on for a long time, make sure |
| to ask before you agree: Do they have an after hour | | | | you understand your responsibilities. I'm a big |
| emergency number? Do they carry builder's risk | | | | advocate for not signing before the house is done. A |
| insurance? Do their subcontractors clean up the trash | | | | new home will always have a "call back" list. Little |
| daily? Do they have a good reputation? Does the | | | | things here or there that need touched up. However, |
| price seem too good to be true? If it does, it | | | | if there is something major that's not done, or |
| probably is. Builders now days can build huge homes | | | | something major that's not done to your satisfaction, |
| for less money. They advertise "more square feet | | | | you should think about calling a lawyer. Once you sign |
| for your money". Sounds great, right? Not necessarily. | | | | those papers it can become a battle trying to get |
| Can you put a waterbed on the second floor? | | | | something corrected by the builder. Remember, they |
| This is a true story. A friend of mine built one of | | | | have their money and other homes to build. Until you |
| those "more square feet for your money" homes. | | | | sign and they have their money, it will be easier to |
| Sure, it was big and it looked nice but…the | | | | get their attention. 5. When problems arise: |
| studs were 24" on center and not the standard 16", | | | | If you don't already have a lawyer, get one (some |
| no waterbeds allowed, the walls were not finished | | | | states require it). Sure, your realtor, builder and lender |
| smoothly, and EVERYTHING was an upgrade. She | | | | all want to make sure the process goes smoothly |
| ended up paying more for a "huge" home than she | | | | and will do what they can to make sure that |
| should have because the builder "forced" her to work | | | | happens. After all, they are all getting paid once you |
| with their lender who, after qualifying her knew | | | | sign those papers. However, if things are not going |
| exactly how much they could charge her and | | | | well, the best way to make sure your interests are |
| ultimately that's what she ended up paying. They're | | | | being looked after is to get a lawyer. Find a lawyer |
| staff was very well trained. | | | | that specializes in real estate transactions. They will |
| Make sure you know who you are dealing with | | | | get things worked out in a way that protects your |
| before you sign and make sure you know exactly | | | | interest. It may cost you a few hundred dollars but it |
| what you are getting for your money. | | | | will be well worth it. Sometimes you can't put a price |
| 2. Make solid decisions in a timely manner: | | | | on peace of mind. |
| As you can imagine, building a home from the ground | | | | |