Chris Carley, Home Buyer in Lewisville, TX

What is the process when deciding to build a home on a lot?

Asked by Chris Carley, Lewisville, TX Wed Dec 28, 2011

My wife and I are wanting to build a home, rather than buying a pre-existing home. What are the steps that we would need to take in order to begin that process, and if our lease on our apartment is up December 1st, 2012, what is the time table we should look at to begin this process (i.e. what month to begin and our projected time to finish and close). Thanks!!

Help the community by answering this question:


Hi Chris,
All great advice so far! I live in HIghland Village and know that there are not very many lots left within our city. There are a few scattered lots in Highland Shores and then there are two subdivisions, Chapel Springs and Highland Oaks that have lots left through builders.
From personal experience, making sure that the lot has all of the proper surveys and soil tests done on it is a big first step. The soil in North Texas is different from lot to lot. Does the lot need piers and if so, how many? What are builders typically offering for warranties? My husband and I built our home before I was a real estate agent and I wish I would have had the guidance to ask the important questions!
One thing I encourage clients who are building homes do is to hire an inspector to do a building inspection. It will run you about $600 but this inspector will work in conjunction with the building superintendent to make sure the home is built not only to code but also to stand the test of time. Once sheet rock goes up, you don't know what is behind those walls! I've wondered if the food wrappers and Coke bottles were going to be cleaned up or left. My guess is left! The inspector comes out at key points during the process like foundation, framing, electrical and plumbing.
Please let me know if I can answer any more questions about this process. I have lived in Highland Village since 2004 and love it!
Tricia Hoffmann
Team Nelson
2 votes Thank Flag Link Wed Dec 28, 2011
Your first step is to interview at least 5 Realtors! Find a FULL time realtor who has performed at least 15 transactions in the previous year, has participated in at least 3 new construction projects in the last 2 years. Then have the Realtor show you some desirable areas which fit your needs and have long term potential at appreciation. Demand the Realtor attend all meetings before, after and especially during construction this may be as many as 15 meetings, you need your representation at all meetings. As far as timetables go, typical is 4-6 months.
Picking a custom home builder is a lot like picking a real estate agent; you should interview several builders before making a decision. Do not solely rely on a referral from an agent! Do the work yourself and interview several. Here’s a short check list of questions to ask:
1) Ask for current client referrals, 3 should be no problem & follow up with each regarding quality of the home and how well the builder did in regard to warranty work after the sale.
2) Ask if the builder is willing to do a cost plus contract this will save you money if the builder is ethical and doesn’t try to steal.
3) If you are obtaining financing ask about construction perm loans, these are one time closing loans and usually save the customer about 2,000 and may also have a tax benefit for you. It also allows you to see all the bills and control all the money.
4) Talk with the builders bank make sure the builder has the resources to complete the project
5) Run a background check on the builder check for current & pending lawsuits
6) Ask for a copy of the builders credit report (personal or company) also ask for a copy of your agents credit report before you hire them. This may sound bold but you would be surprised how many are below 600, and then ask yourself do you really want to accept consul on one of the biggest decisions of your life from someone who can’t manage their own financial future?
7) Check with the local Texas home builders association for a list of builders in the area
8) Energy cost are going up and the trend will continue pick an Energy Star home builder and have the home certified as an energy star home this will save you money over the long term, add quality to your home and help the resale down the road. For an energy star home expect to add 2-3% to the price of the home.
9) Ask to see a written copy of the home builders warranty program.
10) CONTRACTS- usually not a big deal and all 3 types work well the question is getting the best deal for you. The 3 types are: Realtor provided (these protect the interest of the agents & brokers), builder provided (these protect the interest of the builder and usually provide more detail in regard to dispute resolution) home owner provided (these are drawn up by your attorney and favor you in the event a dispute arises) many times a builder will want to use their contracts, it’s usually fine just make sure your real estate attorney reviews the document before you sign.

That’s your top ten list! Good Luck!
Web Reference:
1 vote Thank Flag Link Thu Dec 29, 2011
Awesome advice. Thank.
Flag Tue Mar 4, 2014

Probably the first thing to do is sit down with a realtor and talk about exactly what you want to do. Do you want to find a lot and build with a customer builder, or do you want to work with a builder in an existing community, where they own lots already. This will help determine your timeframes and financing. If you want to find your own lot and build a custom home, you'll probably need a lot more cash, than for example building in an existing community where the builder owns lots.
Then depending on what you want to do, get prequalified for a loan to see if what you want to do is possible or what price range you need to be in.
Then the realtor can help you determine what communities and time frame you might want to consider.
If you are looking for a single lot, with a customer builder, you might want to start now.
You may need to run water, electricity, sewer, do site surveys, soil surveys, etc before you actually start construction.
If you are looking to build with more of a production builder, 4-6 months out might be fine.
It may also depend on the size of home and the price range you want.

I'd be happy to sit down with you and your bride and talk about what you want to do.
My office is in Coppell. There's no charge for this consultation and we can try to figure out exactly what you want to do and how far in advance you need to start and plan. We'll also provide you a free copy of our book, Your First Home at this time.

ALWAYS ALWAYS ALWAYS use a Realtor when building or buying a new house. Always take us the very first time you visit a builder. There is no extra cost to you and in fact we will often save you time, money, and lots of headaches. You may want to read some of the information on my website concerning new construction at:…
0 votes Thank Flag Link Thu Dec 29, 2011
Bruce Lynn, Real Estate Pro in Coppell, TX
Hi Chris,

A few questions would need to be answered:
1) Do you already have a lot or are you looking to start from scratch?
2) If you are looking to start from scratch, have you already identified an area that you like?
3) Do you want to buy in a new community where builders are currently building or do you just want to find a lot and then build?

Each answer then will bring more questions. One of the best people to walk you through this process is a licensed real estate agent. I know you are not looking to buy a pre-existing home, but real estate agents deal with builders in many circumstances as well.

Feel free to give me a call and I can ask you a few questions to get a feel for your situation and needs, and then give you more specific, personalized advice based on your answers. I would be happy to help you and as a buyer, there is no cost to you for my services. How cool is that?

It's more than real estate. It's RAYL-Estate!

Brian Rayl
0 votes Thank Flag Link Wed Dec 28, 2011
Most likely, you'll need a bit more time on your lease, probably another 3-4 months. There are quite a few steps involved. First, you'll need to identify a few potential lots and determine if they are buildable. Then, figure out the cost of constructing a home of desired size and floor plan with a reputable builder. Compare the costs with your available cash to see if it's within your budget. After that, the builder should be able to guide you through the process of getting permits and financing.
Web Reference:
0 votes Thank Flag Link Wed Dec 28, 2011
Much more is involved than you can imagine. 1st step determine how much you can qualify for regards to a loan which governs the entire process.
0 votes Thank Flag Link Wed Dec 28, 2011
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