Did you know that you do not have to go to an architect before you approach a home builder? In fact, it is often better if you don’t!

Deciding which is most important: utility or luxury

When coming up with a one-of-a-kind home design to meet your unique combination of needs and budget, there are two major considerations that will help narrow your focus. Figuring out which is your priority will get you moving toward the design of your dreams.

Utility

If you put utility in automotive terms, think of a van or pickup. In many cases, the usefulness of the vehicle for a specific purpose takes precedence over the looks or the emotional grab of the car’s design.

A pickup truck is designed for a specific purpose—to haul bulky or heavy stuff—and the way the truck looks, feels, rides, or drives can be secondary considerations. If it won’t haul, then none of the other stuff matters.

The same can be true for your home. If you have a large family or if you homeschool, you need space. Your new home might be beautiful, elegant, and inviting, but if it doesn’t have enough space for your family to live comfortably, then it just won’t work.

Aesthetics and luxury

Back to the automotive example above, this time think of an exotic sports car or a luxury SUV. Neither one has utility as its number one purpose. Each design puts style or luxury above utility—you won’t be hauling a piano, but that’s not why you buy a car like this.

Put in terms of a new home, it’s a design that has angles, lots of architectural features, high-end lighting and appliances, and maybe even some exotic finishes. Maybe you don’t have a lot of kids at home, and the high-end features are what you’re after. Your home could have lots of space and an efficient layout, but if it doesn’t make a statement you when you drive up or walk in, then it won’t work for you.
Take the time to really understand whether utility or luxury is the most important for you and your family in your new home design. Even though the finished product will have elements of both (you might want lots of space, but that doesn’t mean it can’t also be beautiful), one factor or the other will drive the overall design. Knowing which one will save you lots of time and frustration when communicating your desires to the home designer or builder.
We worked with one homeschool family that started out trying to balance both needs perfectly. They wanted a specific look, but what they really needed most was the square footage, and they couldn’t fit both in their budget.

Once they realized space was most important, we focused on a large, efficient floor plan and then added some very specific elements in key places—cedar shutters, a high-end stair railing, and a few other aesthetic elements that achieved the look they wanted without having to sacrifice space.
Before you begin the design process, take the time to discuss these ideas with the other decision maker(s)—your husband, wife, or whomever else is involved in the decision—and make sure you’re on the same page.

Standard features are for standard buyers

I can usually tell whether someone’s been shopping for builders by the questions they ask.

One of the most common questions is, “What are your standard building specifications?” Now, typically when someone asks this they’re looking for a list of “standard” features so they can compare one builder to another.

I totally understand the question, but the right answer, in a lot of cases, is a little counter-intuitive.

At the risk of sounding like a smart aleck, let me ask you a question. What the heck is “standard” about the custom home you’d like to build?

If you wanted a “standard” home, there are plenty of houses in Edmond or Mustang where the houses are ten feet apart and all pretty much look the same. Isn’t that what you’re trying to get away from?

When a builder has a list of “standard” features, there are several possible reasons:

  • He just likes to build that way, and you’re going to end up with a home that fits his preferences, not yours.
  • He doesn’t know how to figure out the cost of a truly one-of-a-kind home and doesn’t want to budget for unfamiliar materials or features.
  • He’s simply lazy and doesn’t want to take the time to figure out how to build the custom home you really want.

In addition to that, the “standard” features list is also what many builders try to use to differentiate themselves from the competition, throwing out technical terms like “anchor bolts,” “3500 psi concrete,” and “2×6 walls” that don’t really tell you anything about the quality of their work.

If that’s what a builder claims sets him above the rest, he doesn’t think you’re going to dig very deep in your comparisons.

When building a home on your land, you want to find a builder who specializes in custom, one-off home building—a builder who never builds the same home twice.

In order to build that way, a builder has to be extremely organized, with systems for designing, drafting, and cost-estimating, specifying every last detail. Is that difficult to do? Sure.

But with those robust systems, the builder can create the list of features that you want in your specific home, instead of just handing you a list of “standard” features. Standard features are for standard buyers.

If you dream of building your family’s home on your land, you’re not a standard buyer. You’re a person whose dreams and aspirations go way beyond standard.

What does “custom” really mean?

When you’re searching for a builder to help you build your family’s forever home, you’ll probably see the word “custom” thrown out a lot.

It’s easy to think that everyone means the same thing when they talk about custom homes, but I’ve found there are couple of very different ways that term is used.

Many builders will consider a home custom if they’re building a home for one specific client, rather than building a home on speculation (building a home and hoping someone will come buy it). Even if they’re building a home based on a design they’ve used dozens of times before, they’re building it for one client who has already signed a contract with them.

A lot of builders use the word “custom” in the names of their companies for that very reason.

On the other hand, “custom” could mean that a home was designed specifically around your needs, wants, and budget—that means a design that’s never been built before. To me, that’s a more honest way to think about a custom home. It really is tailored to you and your family.

Most builders shy away from building homes that are that level of custom, even when they consider themselves “custom builders.” Why? Most home building companies are very, very small. They don’t have the capacity to do estimates, and if you throw them something they haven’t seen before, that creates more work than they’re used to doing per home.

Even some of the larger home building companies lack a key skill: accurate, detailed estimating.

Why is that important to you as a custom home client? It may not be.

But here’s why that is often an important sticking point. A builder who isn’t confident in his own estimated cost to build your home will probably push you toward a home design he’s built before because he knows how much that house costs him to build

He might push you toward modifying an existing plan, and he’ll definitely have “standard features” that you just have to have in your home—because he won’t know how to take them out, re-estimate his costs, and give you the proper amount of monetary credit for them.

Or maybe he won’t push you toward an existing plan, but he’ll insist on building “cost-plus.” Any extra costs in building the home will be in addition to the price you’ve already agreed upon, and it’s you footing that bill as the homeowner. Alternatively, he may agree to build for a fixed price, but will include enough padding in that price to account for his estimating inaccuracies.

Either way, if he agrees to build a truly custom design (meaning a one-off home design created just for you), you’re going to be paying for his uncertainty.

You can avoid those outcomes by asking potential builders how they will arrive at their budget for your new home. Ask about how precisely they estimate their costs. If a builder sounds vague or bases their estimates on a rule of thumb (like a dollar-per-square foot number), you can be sure he expects you to pay for his lack of precision.

Avoid relying on house plans found online

Frequently, the first time I meet with a client, she brings with her a set of plans that she’s found during many hours of painstaking research online. She’s usually spent a lot of time looking online to find a home plan that is just perfect for her family’s needs.

Usually, that design isn’t exactly perfect, but it’s the closest thing she’s been able to find so far. The best thing about internet home plans is that they can give you a really good head start on the process of thinking through what you want, need, and can live without in a home design. And sometimes, that’s the hardest part!

But there are some things that an house plan found on the internet can’t do for you. It can’t give you a realistic prediction of how much it will cost to build, because every family has different preferences, and there are pricing variations depending on your market.

In addition to that, any customization of a home design found online is up to you. That usually means that you’ll pay the original designer for the house plans, and then you’ll pay another designer to make the custom changes that make the home perfect for your family. You’ll end up paying twice for one home design, and any substantial changes will have to be tacked on to what are essentially plans for someone else’s home.

The best approach is to use the house plan as a guide. Find the best design you can online, and use it to guide your initial conversation with your builder. Talk with your builder about what you really, really like about the plan, what you really dislike, and what elements you could take or leave. You should also include any photos you’ve found (you can share your Pinterest board for convenience) so your builder can get a feel for your style and tastes.

Your builder should use that information to create a brand-new, custom design that meets your design and budget needs. It shouldn’t cost any more than any other design, assuming you’ll be hiring that builder to build your home. All of the details you’ve shared, taken together, will result in a unique, one-off design that fits you like a glove.

The building process: good, bad, and ugly

When was the last time you watched a car go down the assembly line? Most people don’t ever get the opportunity to see all the stages a car goes through before they purchase it. Any mistakes or inconsistencies are buffed out, replaced, or corrected before the car leaves the factory. All we ever see are the clean, shiny, finished products.

Now think about all the different stages your home will go through as it’s being built. Some of them are not pretty. Your home won’t be built in a climate-controlled factory, built more by robots than by hand. And because it’s totally, completely custom, it won’t look exactly like the last home your builder built or the next one.

But it’s surprisingly easy to expect that a home built out in the elements, by hand, with natural materials, will look just as shiny and perfect as that brand-new pickup. Why is that? I think it’s because we live in an age shaped by technology and surrounded by near-perfect manufactured, mass-produced products.

When you’re watching your brand-new forever home take shape before your eyes, it’s a bit like childbirth. Sure, it’s a beautiful thing, but the end result is far cleaner and more picturesque than the process! It’s important to remember that, unlike childbirth, we hire professional homebuilders to build homes for a reason: building a home can be a challenge to your patience and tolerance for mistakes.

The real key, then, isn’t whether mistakes are made—but what types of mistakes and how the builder deals with them. What separates most builders from the few elite builders who are the leaders of their profession is how they prevent mistakes and respond when they do occur.

The builders in the elite group do a lot of planning up front. They create detailed specification lists by really listening to their client. They draw detailed, accurate plans and plan for contingencies such as inclement weather and labor shortage. They leave room in their plans and their schedules to correct errors and have a plan to deal with them as they arise, but they also have systems in place to simply avoid common mistakes in the first place.

When you’re talking to builders, ask what their planning process looks like. How many times will they review the plans for your home? Do they review their detailed plans and framing layouts with a framing contractor prior to starting? Do they proactively gather accurate material quantities and bids from each supplier? Have they reviewed the heat and air ductwork layout with the heat and air contractor to look for any conflicts?

If their answers to these questions are vague, or aren’t forthcoming, keep looking.

Keeping the joy in your home-building process

There are literally hundreds of potential decisions you might have to make when designing and specifying what goes in your new home built on your land.

It’s easy to get so overwhelmed that the joy just gets sucked right out of the process! We’ve worked through this process with so many clients that we’ve developed strategies and processes to keep the joy in what should be a wonderfully fulfilling process.

It requires some communication and a lot of listening on the part of the builder, but we’ve found this helps our clients really know what to expect in their custom home.

1. Communicate about what’s important and what isn’t

First, decide what you really care about and what you really don’t care about.

If you really don’t care what brand, style, and shape your new toilets will be, then just let the builder handle that detail within the scope of your budget! Tell him the toilets aren’t that important; you’ll get perfectly good ones that do exactly what they’re supposed to, and you won’t have to kill brain cells worrying about it.

On the other hand, if the size and pattern of the base molding is important to you (maybe you love the way custom millwork looks and feels!) then bring that up and make sure your builder provides plenty of options within the scope of what you like and what your budget allows.

Make sure your builder writes down what is important to you. You can keep your own record of what’s important to you, too!

2. Let your builder choose for the items you don’t care about

You should receive a list of everything that’s going into your house, and I mean everything. If your builder can’t give you a list of everything that will go into your house, how can he really give you an accurate budget?

When I meet with clients, I have up to sixteen pages of paperwork that lists out the specifications in their house, including every detail down to the door hinges. We talk about everything that’s important to them, and once we’ve exhausted that list, I’ll finish filling out the specifications based on what I know about a client’s budget, needs, and tastes.

That way, they don’t have to spend energy worrying about some detail they really don’t care about. But I don’t make them stick with my choices!

3. Review your builder’s choices and make changes as needed

After I have specifications noted for every detail of their house, I give my clients that list (yes, all sixteen pages!) to take home and review if they choose to. They might find that everything I specified on their behalf is fine.

Or they might discover that they care a little more than they thought about a particular item—maybe they hadn’t ever thought about it before! I find that seeing everything written out helps my clients clarify what they really do and don’t want to see in their homes.

Your builder should be responsive to your thoughts on anything they’ve chosen for you. They can help you figure out what’s available to you within your budget, but within that, they should allow you to decide how much or how little input you want to have on your custom home.

Not sure how your builder will decide on the details that you don’t specifically identify? Ask how they handle that—and if you don’t like the answer, they may not be the right builder for you.

Your budget may be your undoing

This is going to sound counter-intuitive, but there isn’t necessarily a relationship between what you want in your new home and your budget. Or think about it a different way: We all learn at a young age that just because you want something doesn’t mean you can afford it.

The desire to get the home you want, with everything you want in it, can drive people to make bad decisions. You can ALWAYS find a builder who is happy to tell you he can build exactly the home you want, with everything you want in it, for your budget. Always. Why is that?

Here’s the industry secret I’m not supposed to tell you. Many builders love cost-plus contracts. It works out great for them—not so great for you.

Here’s how it works:

You say, “I’m in love with this home design, and I want this list of amenities. Can you build this home for my budget of $250,000?” The builder, either desperate for business or just not that concerned about your well-being, says, “Absolutely I can.”

The builder creates a budget, or “estimate,” of your building costs and adds on his fee, probably something reasonable like 15% of cost. The sum of the estimate plus the fee adds up to some number just below, or right at, your budget.

You might be tempted to try to negotiate a lower fee. The builder might even come down. Of course, that’s where the negotiation room is, because your home is going to cost what it costs, right? The estimate is what it is.

Except it isn’t.

So what’s the catch? The builder says he can do it, right?

The estimate is exactly that: an estimate.

Let’s say he estimated $4,520 for wall-framing lumber, $1,765 for ceiling joists, $2,672 for rafters, $1,894 for decking, and $2,113 for cornices.

Now, that might sound fine, but think about your job. If you hired someone with no experience in your industry and told them how much it would cost to buy bulk paper, computers, or any of the items you need to carry out your daily responsibilities, they would have to take your word for it.

A cost-plus builder is banking on you making that same assumption—taking their word for how much materials and labor will cost for your house. After all, you’ve invested time in becoming an expert at your own profession, not home building!

The problem with that is, unfortunately, your budget. Not that there’s anything wrong with having a budget! But if your builder automatically gives you the green light to put a long list of amenities in your home without a conversation about what will or won’t fit in your budget, that should make you a little suspicious.

The truth is, you can’t fit every feature into a home on any given budget. But a good builder will work with you to prioritize what you can fit into your home on your budget, and where you can find compromises or substitutions to get as close as possible for the features that would put you over budget.

If your builder gives you an estimated budget that miraculously fits all your desires into your budget, beware. An estimate is just that—an estimate. And in a cost-plus home build, any extra cost falls on your shoulders, not the builder’s.

But since we don’t write cost-plus contracts, I’ll admit I’m a little biased. So you don’t have to take my word for it! Just ask a banker who has a lot of experience doing construction loans how often cost-plus jobs go over budget.

Don’t let a builder’s ego take over your new home

Many builders think of themselves as “artists”—the home they’re building for you is really theirs, they’re just allowing you to pay for it. Isn’t that magnanimous?

This type of builder wants to show you what “they” put into “their standard home” and what their “standard finishes” are. Never mind your preferences. They’ll talk about how many dollars per square foot they build for, which they can predict because they know exactly what you should have in your home.

Maybe you’re trying to get the price of your home down to $290K, but the builder wants to have crown molding and can lights, because “that’s what every one wants.” Beware: you may be talking to an ego builder.

Ego builders have certain floor plans to choose from, and that’s about it.

Want to change something in the floor plan? How dare you insult their baby that way! With an ego builder, you’ll find that it’s like pulling teeth to make any changes, and they’ll try to talk you out of every one.

After all, they’re the expert in what you want, right?

They don’t want you to bring along anyone to help give input, like your family or, heaven forbid, your Realtor. They know what you need.

Ego builders will make you feel unwelcome on the job site.

They’ll discourage you from visiting. They’ll make a big mess, make the neighbors mad, and tell you that’s just part of the construction process. You just have to live with it. It’s their project until it’s finished and you move in.

Ego builders won’t help you with anything that isn’t directly related to construction.

Having trouble finding land? Need to solve a title or lending issue? Want help negotiating a land deal, or need advice on how to evaluate a particular piece of land you really like? Tough luck.

The ego builder just wants to build your home. You can solve your own problems and then come back when you’re ready for them to build.

Don’t let your new home fall into the hands of the ego builder!

An artistic house may or may not be functional for you, and it’s unlikely that the builder’s style is going to match yours exactly. After your home is built, you’re going to be living in it, not the builder. Make sure you choose a builder who will listen to what you want to see in your house.

Uncomfortable with the concept of a builder’s fee?

I hear many people talk about contracting their new home themselves to save money, since they’ll be saving the amount of money the builder makes in profit. And it makes sense, in theory.

But think about this: On the first day you arrived at your current job, did you know what to do without making a mistake? Could your boss replace you with someone off the street, pay them half the money, and get the same results?

I know there’s a lot of distrust built up against custom home builders, but it’s unlikely that someone with no building experience will be able to build a house smoothly without expensive mistakes. In one stroke of a pen, you can make an $8,000 mistake like approving the wrong cabinet material.

Most people set out to build their own homes to save money, and that makes sense. Some of that distrust of builders comes from the idea of the builder’s profit, but it’s worth looking at the two main types of building projects before writing them both off.

Why most builders build cost-plus

“Cost-plus” building means that you pay the actual cost of the construction, plus a fee (usually a percentage of the cost) to the builder as his fee. Why do they do this?

They do this because then the cost of the mistakes are on you. You’re responsible for material overages, increase in material and labor prices, and whatever other expensive mistakes crop up during your home build. You also pay the builder’s fee on top of that, and the fee actually goes up when there are more expensive mistakes in the home build.

No wonder many people are skittish about the price of building a custom home!

This is the origin of the fallacy that you’ll pay less for your custom home if you build it yourself. You’ll still make some mistakes, probably, but at least you won’t pay the builder’s fee on top of that. That’s great, as long as you make no more mistakes than the builder (with years of experience) would make.

Fixed-price builders have an incentive to keep costs low

The other main type of home building is “fixed-price,” which means that the builder plans out every detail of your home ahead of time, tells you how much it is, and is responsible for the cost of mistakes.

The fixed-price builder has a profit, too, or else they wouldn’t still be in business. But their profit margin decreases any time there are expensive mistakes, so they’re as motivated as you are to keep those mistakes at a minimum.

Doesn’t that tempt the fixed-price builder to cut corners if there’s a problem? Possibly, and that becomes easy to do if you don’t have an extremely detailed list of specifications he agreed to follow. Your home should be defined down to the last doorknob, so you know whether your home is built as promised.

The fixed-price builder has control processes in place, developed over the course of many years of building homes, which is why he has the confidence to give you a fixed price. He knows what he can do and what he can’t do.

He can build your home for less money, even with his profit, than you could yourself, because of the systems and techniques he’s refined over the years. And the close relationships he has with suppliers and contractors can also help you keep costs down.

A lot of folks who are interested in building a custom home for their family are understandably turned off by the way cost-plus builders price their homes. But you don’t have to sacrifice a builder’s expertise in order to have an affordable custom home. You just need to make sure your builder is also invested in keeping your costs low.

How much work goes into planning a new home?

Just like in any industry, you’ll find different approaches in home building depending on whose work you’re looking at. But in home building (like most other industries), a quick, smooth project is ideal.

Clients are happiest when work goes quickly and smoothly. Quality is highest and cost is lowest when work goes quickly and smoothly. There’s really no downside.

However, homes that are built quickly and smoothly tend to have a significant amount of planning done before any construction begins. There are two main approaches to building a home—the ready, fire, aim approach and the measure twice, cut once approach. While it may seem counter-intuitive in terms of time, the latter approach that requires more planning tends to result in a quicker and smoother build.

Ready? Fire! Aim!

Many builders employ a “Ready? Fire! Aim!” method of building. They will draw a set of plans, make a few notes, and give the plans to the contractors who will execute those plans. The builder will solve problems as they arise, including reworking problem areas as necessary. They may make excuses and blame the contractors for poor work or lack of planning.

Here’s how it might work out in your home build.

The framer didn’t get clear instructions on the roof structure, so he built it however he wanted to. But that meant that the heat and air contractor didn’t have anywhere to run his duct work. So the heat and air contractor called the builder, who called the framer, and the framer found a solution. He reframed some of the work he’d already done.

Then, the builder called the heat and air contractor to come back out, but he was already on another job, so he wouldn’t be able to come out for a week. The builder sent the framer payment for the rework (paying him twice for the same work, essentially) and the job has fallen another week behind schedule.

Unfortunately, preventable setbacks like this happen too often during custom home builds. You may have even heard horror stories from friends or family that sound a lot like this one.

Measure twice, cut once

The other approach to building requires much more planning on the front end. These builders will draw up a set of plans and review them with the client to make sure the plans meet their needs. They will modify the plans as needed until the client is happy. Then, they’ll review the plans with all the contractors to get their input and plan each phase of construction to ensure there’s no rework needed.

Then they’ll review the schedule with all the contractors and make sure each contractor has all the information they need about the job: plans, specifications, color selections, schedule, material availability, job location and driving directions, and the point of contact for the project.

Only after they have done all that prep work will they start building your home. Any problems that come up at this point will be minor.

When you’re deciding which builder to use to build your home, ask your builder how they prepare for a building project. If their answer makes you nervous, you may want to talk to a different builder.