From Raw Land to a Home — Beginning the Journey

Raw land, what does that mean?  In real estate terms, raw land is land that is undisturbed or in its natural state.  There are no improvements on the land, soil testing hasn’t been done…there hasn’t been any clearing, grading, digging or cleaning…it is raw!

The nice thing about “raw land” is that it is like a canvas waiting to be painted!  Let your imagination run wild!  What kind of home would look best in its setting?  Is it a wooded lot, or cleared? Are there features on the lot that need to be accentuated, such as a stream, or pond, or view?  Naturally, along with the daydreaming, you have to sprinkle in a dose or two (or more) of reality.  That part isn’t fun, but you do need to know what you can afford and what will meet the needs of your family.  My last blog addressed getting approved for a mortgage, so you can read that if you are trying to figure out what you can afford.  This post is really an introduction to the journey of building a house.  american-dream-alamyIt is an exciting time full of possibilities and dreams.  It’s often said that owning a home is the “American Dream”.  If that is true, than building your own home is the ultimate “American Dream”, right?

Let’s assume you are ready to buy a lot and begin the building process. How exciting is that?! But WAIT! There are many things to consider and research when you begin this journey….

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Things to consider….
  • Size, location, and cost
  • Does it have covenants, restrictions, an HOA, or a road maintenance agreement?
  • Is it part of an easement or does it have road frontage?
  • Does it already have a well and septic permit?  If so, how many bedrooms does it perc for?  Can it be a gravity drain field or does it need to be an alternative system?
  • Can you connect to a town water source?
  • Will the lay of the lot allow for a walk-out basement (if that’s important to you)?

These are questions you and/or your agent (I’m making a huge assumption here that you have a real estate agent!!!) can find out, but depending on the answers, may have an impact on the cost to build, or whether you can build what you want or can afford on that particular lot.  There’s much to consider when buying land to build or even buying a resale home.  This is a BIG investment, so it’s very important to do your research, know what you want and need, and be ready to go when you’ve determined that you’ve found the right lot.

Once you’ve found that perfect lot, the next step in the journey of building a home is to find a contractor to build that dream home for you!  Sometimes finding the lot and the builder are accomplished in the same step.  For instance, you may find a lot that is listed by a builder and the listing indicates they will “build to suit” or something along those lines.  Conversely, you may actually know a builder, or be referred to a builder who has lots they own and will either build one of their house plans on one of their lots for you or use a house plan you have found.  Often a builder will build what is called a “spec” home (a house plan or plans they build over and over on different lots) and you may write a contract on it at any point in the building process.  The earlier you get under contract, the more choices you may have in making selections on upgrades or colors etc.

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Buying a spec home can be through a small, local builder who builds on their own lots, or a large developer who builds subdivisions and usually has a model home that you can tour. Another option (as if there aren’t enough already) is to build a truly custom home — from hiring an architect to design a custom home to hiring a builder that specializes in constructing custom homes; which is really another category altogether!  Your experience may be a mixture of any of these possibilities because there are so many options when it comes to how you walk out this journey.  Choosing the builder is an important step along the journey.  I’m a big believer in networking and getting referrals for people you want to work with.  The important take-away here is to find a builder you can trust and build good rapport with, because it will be a long process to go from raw land to your new home!  This blog will focus on the experience of working with a small local builder since that is who we are!

OK, so whew….now you have your lot and you have a builder!  You probably also have a mortgage lender that is experienced and savvy enough to put all this together for you!!  You’re doing great!!  The very next thing you’ll do is choose a house plan.  This is one of the fun parts!  You may choose to pick a plan from the millions and zillions that are online, or in a book (does anyone look at books anymore?) or your builder may have certain plans he uses and already has priced out with the options and upgrades all printed up and ready for you to look at and drool over!  No matter how you go about it, a house plan needs to be selected and an estimate prepared.  Most of the time, you will have a budget (an amount you’ve been pre-approved for by your lender) and it will include the cost of the land.  This will narrow down the millions of house plan choices to a few that fit into your budget!

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The house plans the builder may have will already be priced with or without a lot so you can see what the price will be if he builds on your lot or if you do a package deal with the house and one of the builder’s lots.  If you bring a house plan to him, he will have to calculate the cost to build that home.

Now that you have the lot, the builder, and the house plan, you are well on your way to realizing your “American Dream”!  Come back and visit this blog again to see the next steps on the journey from raw land to your home in an upcoming post!

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Joyce Wilson | RE/MAX Regency | Warrenton, VA | Licensed in VA

I Want to Buy a Home — Now What?

Welcome to my blog!  This is a new experience for me, but I hope you’ll find my posts informative and useful.  I’ve been a licensed Realtor since 2001 (yikes–trying not to feel old!) and have had the pleasure of helping hundreds of clients buy, sell, lease, and rent properties.  My husband and I have also recently embarked on the adventure of building spec homes!  I’m combining both of these areas, real estate and new construction, and blogging about each of them.  I’ll be posting stories and pics of our first spec home along the way!  I’d love to be able to pass on my experiences and knowledge to anyone interested in the craziness of real estate! Please feel free to let me know if there’s anything in particular you’d find interesting or want to know more about and I’ll do my best to write about it!

What’s this blog about anyway?

My idea for this blog is to have information related to real estate; specifically issues that relate to buyers, sellers, and new construction.  I think we can all agree that buying or selling a house can be really scary and intimidating, especially if you’ve never done it before.  And if you’re thinking about building your own house–wow, that’ll ramp up the stress even more!  Hopefully, I can reduce the stress and fear level a bit and give you practical tips to help the process go smoothly; whether you’re in the middle of it now, are thinking about jumping into the world of home ownership, or considering selling your home in the future.

So you’ve decided to buy a house, now what?

Today, I want to talk about the first step in the path of home ownership.  You’ve decided you’re tired of renting or living with your parents or for whatever reason, you want to buy a home.  It might be a single family home, a condo, or townhouse — whatever type of home you want, you just know NOW is the time!

The first thing I ask every buyer is, “have you spoken with a lender to get pre-approved for a mortgage?”.  The answers vary; some have gotten pre-approved online (which I would not recommend), some have spoken with a lender who they may or may not even remember their name, and many have not and maybe didn’t even think about this crucial step.

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Any realtor worth their salt, will be able to refer you to a competent mortgage loan officer that they have most likely referred many clients to in the past and have confidence in their abilities and knowledge.   Unless you have a trusted relationship with a mortgage loan officer, I recommend that you reach out to the person your realtor referred you to.

You may ask, why do I need to do that first?  I really want to get started looking at all the pretty houses I see online!!  Well, looking at houses is the fun part, but it’s vitally important that you know how much you can afford and how much your payment will be BEFORE you go looking at houses.  I always tell my clients that I don’t want to show them a house that ends up being out of their price range and then every house they see after that, that is in their price range won’t compare and they’ll be disappointed every time. Knowledge is power, right?  Once you know what your qualified for and what your payment will be, you can confidently begin house hunting and feel good about what you are seeing and the choices you have!

On the other end of the spectrum, you may actually qualify for more than what you feel comfortable spending!  Great problem to have!!  Part of the financing step is to nail down how much you qualify for, how much you want to spend or can spend monthly, how much down payment you’ll need and lastly how much your closing costs will be!  Whew, that’s a lot to consider!  If you do qualify for me than you were expecting, you need to make sure you are comfortable with how much you’re spending and how much your payment will be.  This is something you definitely want to discuss with your lender so that they know what your limits are if you qualify for more than you want to spend!

Another reason to be pre-approved before beginning your new home search, is you will be ready to submit an offer as soon as you find your dream home!  You won’t have to delay submitting an offer because you still need to get your financing lined up!  If you are well prepared you don’t risk losing out on a home to another purchaser because you weren’t ready! Lastly, you definitely don’t want to be disappointed to discover that you actually can’t afford that home you have just fallen in love with!

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Check out some other great tips for new buyers here! 

My goal today is to let buyers know the first step in the home-buying process is to simply contact a local, trusted, loan officer and get pre-approved for your mortgage!  Remember—knowledge is power!

Action Steps!  Let’s get Started!!

Contact me for a lender referral to get you started on the path to home-ownership!!  I’ve got great lenders in the northern Virginia and New River Valley areas of Virginia that are ready to help you get started!  They’ll be contributing to future posts!

Thanks for sticking with me and reading to the end of my very first blog post!  I hope it’s been beneficial!  Feel free to comment or share!

 

Joyce Wilson | RE/MAX Regency | Warrenton, VA | Licensed in VA