shoes. If you were loaning a friend 80 percent of the money to build his home, you’d want a few protections in place and a little control over the money as well, right? If you get to know how lenders see the project, which we explain in detail in Chapters 9 and 10, you can easily navigate the approval process, as well as the funding process (see Chapter 11). This approach can make for a smoother, happier custom-home project.
Introducing the Custom-Home Life Cycle
The first step to beginning the process is looking at all the pieces and how they go together. Your new home has a number of individual projects and transactions necessary to complete it. Your new home also needs an army of people with their expert work and services. This section breaks down in an approximate order each person required to get through the process. Then we outline each step necessary to go from land to landscaping.
It takes (more than) two to tango: A quick guide to the players
The following list is a guide to all the individual players involved in the custom-home process. You may or may not use them all; their roles can vary depending on your region and your project’s scope. The order of need may also change depending on where you start in your process.
Financial planner and/or certified public accountant (CPA): If possible, start the custom-home process by carefully assessing your finances; a financial planner or CPA can help make sure you can afford this project.
Loan officer: Your loan officer needs to be involved early and throughout the entire process. You may need to start with a refinance or credit line to get liquid (see Chapter 8). You want to finance the land (see Chapter 3) and do it consistent with the construction financing (see Chapters 9 and 10). Your loan officer can help you through these steps. Lucky for you, Chapter 9 also has good advice on picking the right loan officer.
Real-estate agent: You may need a real-estate agent to help you find and purchase a lot, as we discuss in Chapter 3. They also play a role when it’s time to sell your existing home.
Developer or landowner: The land you buy has to come from somewhere. If you’re buying in a subdivision from a developer, you may deal with a sales office. Or you may end up buying from a landowner who has had the property for generations.
Escrow officer or attorney: Your state determines who administers the closing of your escrow, but either way, this person makes sure the title papers and insurance are all ready for you to take ownership.
Architect and/or designer: Architects and designers design and draft plans for the house. Architects are licensed; they’ll coordinate technical specifications for the house that may be beyond the scope of a designer. The architect can also guide you through the permitting process. (Chapter 5 can help you decide if you need an architect, and Chapter 6 provides the ins and outs of the permitting process.)
Log or timber frame dealer: If you’re building a kit home (see Chapter 4), you’ll work with your dealer for the design process, as well as the purchase of your materials package.
Contractor/builder: You need to decide whether you need this person or if you’ll rely on yourself to drive the construction of your new home (see the “Being an Owner-Builder: More Power to You!” section, later in this chapter, if you may want to be your own owner-builder). We give you tools for working with your contractor in Chapter 7.
Surveyor: This person makes sure you know where your land begins and ends — a necessity for designing a house.
Soils engineer: In many states, such as California, your foundation depends upon the report issued by this person.
Well/septic engineer: If you’re building in a rural area, you need this person to design and certify your water and sewage systems.
Planning department: Your house needs to meet your neighborhood’s zoning requirements before you get permits. This department enforces the zoning (see Chapter 6).
Design review committee: You can’t always build what you want. This committee dictates what it wants to see in your design (see Chapter 6).
Building department: Everything must meet code, and this department checks your plans before issuing permits (see Chapter 6).
Appraiser: The lender won’t approve a construction loan without an appraisal estimating the finished value (see Chapter 10).
Insurance agent: Chapter 2 spells out all the insurance you need for the project. This person provides the goods — they’ll be busy.
Material suppliers: Sticks and stones all have to come from somewhere. Some projects have many sources (see Chapter 7).
Subcontractors: Each one is an expert … just ask them. Artisans and craftspeople build each different system in your house. Chapter 7 tells you how to work with them. Chapters 12, 13, and 14 explain what they do.
Laborers: Somebody has to do the grunt work on the job. These people work the hardest and get paid the least.
Building inspectors: The building department checks up at various stages of construction to see that you’re building in line with regulations (see Chapter 7).
Disbursement agents: The lender assigns someone to make sure you get money when you need it or to solve problems with getting money from the lender. (You can find more on these agents in Chapter 11.)
Bank inspectors: The bank won’t give you money unless work has been done. These people come out to the property monthly or at various stages to make sure the work is complete (see Chapter
