Building the House

Building a Home: Where On Earth Do We Start?


“I didn’t know how to do all of this! Do we get a loan first and then get a contractor? Do we get a contractor and then a loan? When is the first time you actually have to pay your contractor? Would a contractor laugh at me if I didn’t already have financing? Would a bank give me financing if I didn’t have house plans yet?? “

Getting the Horse Before the Cart… or is it the other way around?

How do you know what to do first? After we found our dream land and began to develop the concept of our home it was then time for us to find a contractor…. or maybe it was time to get a loan? Or, pre-approved for a loan? What comes first? Contractor (we decided for no apparent reason). Let’s focus on contractor. But… how on earth do you do that?!!? I tried Googling “Contractors near (insert zip code)” but all I was given were nondescript yellow page names and phone numbers. Not useful if you are looking for someone who can make your dreams come true on a budget! We needed someone special! We needed someone we could trust and who wouldn’t cut corners.

Maybe Angie’s List? Nope. The commercials I had seen for this service led me to believe it would answer all my questions, provide honest reviews and all for free! It might do all of theses things… but unfortunately they didn’t have anyone listed for my area and this was a consistent result for all of the sites similar to Angie’s List. So, although I’m sure these are very useful services they didn’t prove to be very helpful for us.

We were at a loss… so what did I do? I called my mom. As usual, she had the brilliant idea to ask those we know. We put a message out on Facebook, we asked people in our area and we asked our family. My awesome cousin-in-law who does beautiful wood working came through with three dynamite recommendations!

Finding the right person was SO important to us! We had heard so many horror stories of contractors who weren’t true to their word, who built shotty homes or who were just plain dishonest!

David and I compiled a list of questions to ask each of them, and then nervously called them together. We called them nervously… because to be honest, I didn’t know how to do all of this! Do we get a loan first and then get a contractor? Do we get a contractor and then a loan? When is the first time you actually have to pay your contractor? Would a contractor laugh at me if I didn’t already have financing? Would a bank give me financing if I didn’t have house plans yet?? And SO many more questions I couldn’t find answers to from my friend, Google.

I’m not exactly sure what all we talked about with each of them, but this was the general outline:

  1. What price points do you normally work within?
  2. We have a large wooded lot in a neighborhood where most of the homes are older and less expensive, so our budget is smaller than you may be used to be working in, are you open to working on a project of our size?
  3. Do you prefer to use all of your own subcontractors or are you willing to allowing us to use some of our contacts if it will save us money?
  4. How quickly do you believe we could get on your schedule?
  5. Do you have references or a website we can take a look at to review some of your work?
  6. We have a general idea of what we would like to build. Would you be willing to look at our plans and let us know if you believe you could do this within our budget?

Beyond these questions we were also trying to feel out each contractor as a person. Were they easy to talk to? Did they respect our questions and opinions or were they “talking down” to us (true, we didn’t know what we were doing… but we still wanted to be spoken to respectfully!)? Did they understand our vision? Did we think we could approach this person if we had a difference of opinion?

While all of them were very kind to us, we were very discouraged by the time we hung up the phone. Contractor #1 basically stated it would be impossible to build a house for our budget and said we should consider a modular home. (This was very disheartening… as we have heard some very sad stories about modular homes not holding up well under hard weather. We live in the Midwest and winters can be bad so… we felt this was not a good option for us.) Contractor #2 was willing to take a look at our plans and seemed like he might work out. But then, he called back and said he knew he couldn’t do it for our budget. When asked if there were any houses had had done within our budget (because, while we loved our plans we were willing to be flexible!) he flatly told us no. To contractor #3 we left a voicemail… and cried a little, feeling defeated. When #3 called me back the next day I almost didn’t answer, sure of rejection and I did not want to talk to said, rejection, on the phone one more time. I was already mourning the loss of our dream home.

At the very last minute, I picked up the phone and heard the pleasant voice of #3 tell me that he was willing to work within any budget! He said that although our budget would be tight he did not think it was undo-able. He asked to be sent our plans and also asked if he could take a look at our property before we spoke next time….

This might be a tad dramatic but I’m tearing up as I write this. If you have ever had a dream and faced repeated rejections then you will know the feeling of finally being told….Maybe.

By the time we sent him several emails containing all of our hopes and dreams he had already looked at our land! We were a little nervous when we didn’t hear from him for a few weeks but when he got back to us again he had gotten actual quotes for things like the driveway and excavation! He was putting in a lot of work and not asking for a dime. He kept saying to us “dreaming is the free part” and encouraged us to communicate to him and send follow up emails or texts if we hadn’t heard from him in a while.

We were able to make a visit home a few months later where we met with him in person and it all came together! If you read our last post on Designing House Plans… On a Budget you already know that we hired #3. GOOD THING he was so wonderful, right? He was our only option! God provided when we needed it the most.

One thing that stood out to us is that he came up with amazing money saving solutions during our brain storming session. For example, he picked up on our desired rustic aesthetic and talked about using pine, cut by an Amish man he knew, for flooring. He explained it’s a softer wood so it’s less expensive than hardwoods, but if we were looking for a more rustic finish it would work perfectly. “That sounds amazing!” David and I responded in unison! This man speaks our language!

So, in answer to my flurry of listed questions at the beginning of this post:
Do we get a loan first and then get a contractor? The answer is no, but you do get pre-approved. While completing the above search for our contractor we started the process of getting pre-approved for a construction loan.

Do we get a contractor and then a loan? I will cover this in my next post more thoroughly, but basically you get pre-approved, then your contractor finalizes building plans with you and submits them to the bank for appraisal and approval. If you make it through all of that and can meet your financial obligations you move toward closing. Once you close you can break ground!

When is the first time you actually have to pay your contractor? Well, for us the answer is different than most. Again, more on that next post, but in general you don’t have to pay your contractor at all except for out of your home loan.

Would a contractor laugh at me if I didn’t already have financing? No. They better not!

Would a bank give me financing if I didn’t have house plans yet? They will pre-approve you. The loan will not be given until plans are submitted, appraised and approved.

If you can tell from these questions above, we struggled to know what order these steps should be in and how to approach these people without feeling like idiots!

I sincerely hope that if there are any new construction newbies out there, that this was helpful and in terms that simplify this beginning process.

I hope you also feel encouraged…. If the way ahead seems murky don’t be afraid to ask the question! Sure, asking can be intimidating and can make you feel vulnerable, but the bottom line is that everyone has had to have a first time at all of this… and I think it’s safe to say that no one knows it all!

Get the right people on your team and you will be unstoppable!

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