Extreme Expectations: Home Edition

If you"ve made the decision to have a new home built from the ground up,  be prepared to feel a bit like an expectant parent. You"ll want to monitor progress by checking in for regular visits with the professionals. The delivery date can come earlier or later than anticipated. And you"re bound to feel a range of emotions during the waiting period—from giddy excitement to nail-biting uncertainty.

But, as with a pregnancy, so long as you head into the new-home building process well informed and with realistic expectations, you can count on a more satisfying and less stressful experience, say the experts.

For starters, it"s crucial to select the right builder for the job. Many buyers opt to have a semi-custom (tweaked from a set floor plan) or completely custom home built on an infill or teardown site of their choosing, or they choose to erect a new home in a subdivision or development where the builder is featured. Wherever your chosen location, be sure to choose a reputable builder known for quality craftsmanship that meets your budget and shares your vision for the finished product, says Michael Ray, principal of The Housing Group,  Atlanta.

"Building a new-construction home is one of the largest investments you"ll make in your lifetime, says Ray. “For this reason, it"s critical that you research a range of builders, conduct interviews, obtain references and make sure you feel comfortable spending the next several months working with them.”

Indeed, depending on the customization, size and level of detail required, the construction process itself can span anywhere from approximately four months for a tract home up to 18 months or longer for a one-of-a-kind custom residence.

"It actually takes a shorter amount of time to build today, as many materials come pre-assembled and ready to install, whereas years ago materials were assembled and even made on site,” says Fernanda Forman, managing director at Bond New York in New York City.

Nevertheless, it"s important to brace yourself for unexpected delays and costs, says Beth Lindahl, associate principal and project manager at Orren Pickell Designers & Builders, Lincolnshire,  Ill.

"Unforeseen factors like soil or water issues, new framing conditions and weather are typically the most problematic,” Lindahl says. “If it rains for many weeks, for example, this will slow down framing.”

Change orders, inspections, labor and lead time for special materials also can extend the construction period from a couple of weeks to a few months,  Forman says.

Additionally, “with the credit crunch happening, many otherwise financially sound developers and builders are experiencing shortness of capital funds, resulting in either delays or unfulfilled obligations,” says Forman.  “It"s important for buyers to be very vigilant and stay on top of the process,  particularly if things seem to not be going as they had previously or if major deadlines or timelines are missed.”

Keeping an eye fixed on expenses is important, too, as cost overruns are not uncommon with new construction, says Lindahl. Some clients may spend as much as 20 percent more than their original budget, she says, with the average being around 5 percent.

During construction, communicating regularly with the builder and keeping tabs on the progress of your future home is a must, says Laura Meyer, a real estate attorney in Los Angeles.

“With a project as big as the building of a new home, it is reasonable to expect communication about how the job is progressing on a weekly basis,”  she says. “If you"re dealing with a design/build firm, you should probably talk to the lead contractor or construction supervisor. There also are times when there are multiple people involved—an architect, contractor and perhaps a designer—and you may have developed more of a rapport with one person or another. But if there are concerns that aren"t easily resolved, it"s imperative to communicate with the party with whom you have the construction contract."

If there are any serious disagreements, such issues your contractor will not resolve, “then you may need to consult with an attorney,” Meyer says.

If you want to visit the job site, keep in mind that different companies have different policies about this, depending on insurance and other restrictions, says Lindahl.

Janice Leis, associate broker of Bocadelphia Real Estate, Boca Raton, Fla.,  recommends arranging a construction site visit with the builder and having a representative from the company join you during the visit. “Or you can hire an engineer to check on each step of the new construction,” she says.

When visiting the site or talking with the builder, however, “do not be annoying,” Leis says. “The more you pester the builder or his crew, the less likely you are to get a timely response. Write down your questions or e-mail them so you have documentation of the time of the query as well as the response.”

If you also have an existing home to sell, it"s important to carefully consider the timing of that transaction, says Meyer.

“Some buyers will need to pull out the equity from their old home to finance the construction costs for a new home and may want to make sure the old home is sold before they get into a contract for a new one,” she says. “Other buyers can handle the costs and don"t want the upheaval of having to rent a place or live with family or friends before the new home is ready. In this market, though, one has to keep in mind that, on average, homes are taking much longer to sell than when the market was at its peak. The conservative approach from a financial standpoint is to sell first.”

Lastly, “buyers should closely consider the living conditions they will encounter,” says Daniel Greenspun of Wagner Real Estate, Inc., Philadelphia. “While many owners find it advantageous to get in early on a new housing development when the price is affordable, what they are not considering is living in a neighborhood that could be under construction for the next few years. For some, the money gained in increased property value far outweighs any inconvenience of building-material debris, early-morning construction noise and eyesores like waste containers and portable toilets that may surround their new home.”

© CTW Features