How To Build A Home: Choosing The Best Option
Here at BuildInCanada, we believe that building a new home is the best way to get the perfect home for your family’s current and future needs. However, when it comes to deciding how to build a home, there are some different options available depending on your level of expertise, time, and capital.
How To Build A Home: Building a new home usually happens in one of four ways:
1. Purchasing a home already in construction or a newly constructed home by a registered builder.
2. Having a registered builder construct your new home based on their plans.
3. Hiring an independent contractor to construct your home.
4. Acting as the general contractor yourself and directly hiring the sub-contractors.
Let’s look at some of the pros, cons, and what to expect for each circumstance.
1. Purchasing a home already in construction or a newly constructed home by a registered builder.
This is a great way to get a new construction home without the wait of having to build one from the start. If you like a particular builder’s style and model homes then it may be possible that they have some of those homes available for sale that have been pre-constructed or are under construction currently.
When builders and land developers develop new communities, they tend to build a number of homes on their lots before having a buyer for the home. If you’re able to get involved early enough in the process you may even be able to customize the finishings as you would if it were a new build, and most of the time you save a significant amount of time as opposed to having to wait for a home to be built.
2. Having a registered home builder construct your home
One of the more popular options is to have a registered home builder construct your new home based on one of their home plans or a completely custom design made just for you. Depending on the builder you can either have the home built on your own land or on a lot that a builder may own in a pre-existing community. More often than not you select from one of the builder’s home plans if it’s in one of their communities.
Financing for this type of build is usually done through a progress draw construction mortgage where the lending institution will pay the builder in phases as they complete the home. In some instances the builder may pay for the entire development up-front and you will only need a standard completion mortgage, depending on credit, history and the builder policy.
3. Hiring an independent contractor to construct your home
This is similar to option number 2 except that the contractor may not be a registered builder. That’s not to say they won’t do an excellent job, just that they may not have their own communities or home plans available for you to choose from. There are pros and cons to this. While they may not have the same experience in terms of number of homes built they may only take on one or two jobs at a time which will give your job more attention.
Financing for this situations will likely be a progress draw mortgage as the contractor will need to pay their sub-contractors during the build.
4. Acting as the general contractor yourself
If you have experience in the construction industry and have contacts in multiple trades, you might consider acting as your own general contractor and quarterbacking the project yourself. In this situation, you will be responsible for hiring and coordinating sub-contractors and managing the project from start to finish. While this may be able to save you a bit of money in paying a contractor, there is a lot of pressure and stress that comes with this situation – especially if you are not experienced.
You may also qualify for a progress draw mortgage acting as your own contractor, that will enable you to pay your sub-contractors during the construction.
The best way to build your home…
Is the way that works best for your family and budget. If you need to move in quickly, consider purchasing a home that has already begun construction or is already built. If you are within a limited budget you may be able to shop around with different home builders to see which style homes fit your needs and your budget. When it comes to independent contractors you may need to ask more questions as they may not have pricing and plans available.
When you’re deciding on how to build a home, it’s important that you really focus on your family’s needs – both current and future. Once you do that everything else will fall into place.