If you’re considering building a new home in 2018, now is the time to start. After spending hours driving around and looking online, you have a good idea for location and builder so it’s time for a meet and greet with a builder at that meeting, you can explore his available lots and house plans. You will also meet who you will work with, what his business philosophy is for fixed price vs. cost plus and the personality of the organization. Most importantly, you need to feel that you are going to have an open channel of communication. At the meeting, the builder will also discuss the financial aspects of the transaction. All builders when building to suit require non-refundable notice to proceed funds so don’t be hesitate to discuss what sort of financial commitment is to be expected from you.
Assuming you have had a successful meeting, the builder will begin work on your requested modifications and pricing. You may have another meeting in person to approve the plan or it may be done via email or skype. In my experience, we’ve actually assisted buyers who made all their selections online and never saw the home until they arrived in Alaska to close. I always hold my breath during that type of transaction but I’m happy to report they have all turned out well.
Once you receive a fixed price, along with all your allowances for your interior selections, you enter into a purchase and sale agreement. This meeting usually includes the builder and his representatives at which time you are also given a public offering statement if the property is part of a home owner’s association. If that is the case, you will have fifteen days to review the offering statement and once accepted your notice to proceed funds (usually in the 2 to 10% range) will be dispersed directly to the builder. It is non-refundable and returned only if the builder fails to perform.
The builder then applies to the MOA for his permit and once received the actual construction process begins. The wait time from the meet and greet to the actual excavation can be anywhere from one to two months. Frequently, this is when buyer’s remorse sets in but once the home is framed up and the buyer can actually see their home, there develops a sense of urgency. One word of caution is that the home always looks smaller when it is just framed. You’d think just the opposite when you can see through the studs but for some optical reason, the rooms always look smaller. Most builders provide an in person framing walk through with the buyer who gets to check his window placement and sizes. Next comes the electrical walk through with the electrician to place your wall sconces, recessed cans, et cetera.
Now the process moves quickly with insulation, drywall, paint and the interior finishes. When the home is complete, you have a blue tape walk through. That’s your opportunity to check out the appliances, any nicks or cracks that are always going to appear. We call it a blue tape walk through because you actually get to use the tape to mark the items that need a touch-up or repair. While this process is going on, the appraisal and home inspection, if applicable, occurs behind the scenes. About 50% of all new home buyers decide to have an independent inspection. I particularly recommend this for homes that don’t require a full building permit as is the case in Eagle River, the Valley, Girdwood and some higher up elevations in the Anchorage hillside. A home inspection is a buyer’s cost but it can give you additional piece of mind. I do not recommend closing until you have a second blue tape walk through and all the items have been completed, including any that may have been identified by the independent home inspector. It is a rush to closing both for the buyer and the builder once a CO or CCO has been issued but as a new homeowner, you don’t want to be plagued with call back items and subcontractors while trying to settle into your new home.
If you start the new home building process this week with a meet and greet, your new home will not be completed for six to nine months. So better to get going if you want to be in before the 2018 first snow fall!