While building a custom home is a dream come true for many, navigating the process can be a little tricky. Having the right team by your side can make all the difference. An experienced home builder is obviously a must, but choosing a good realtor is just as important. Not only can they work with you and your builder to help you find a location for your new home but they can simplify steps along the way. Scroll below for three benefits of working with a realtor when building a new home.
Finding the Perfect Location for Your New Home
The age-old adage, “location, location, location” isn’t just relevant when purchasing an existing home. It’s also a key piece of building a custom home. Many home builders often work within specific communities and will have a set of homesites to choose from. But, don’t feel like you have to pick from their available lots. Working with a realtor can be beneficial when searching for the perfect location.
Ideally, your realtor will:
- Have extensive knowledge about the area
- Be well connected in the community
- Have access to “off-market” listings
- Be experienced in the land acquisition process
With a good realtor on your side, you have a better chance of finding the best possible location for your new home. Being able to work collaboratively with a realtor is also vital when independently searching for a homesite. In many cases, it takes both the buyer and the realtor actively searching for land to find the winning lot. As noted above, your realtor will likely have access to listings that haven’t been made available on the MLS yet, which allows you to broaden your search. Below are some of the things your realtor will consider when searching for a homesite.
Your Land Budget
Everyone’s budget for land will be different and your lender can give you your ideal budget. That being said, we recommend that your land budget not exceed 25% of your total build budget. In most cases, anything over that won’t get approved for a construction loan.
When looking for land, don’t overlook opportunities to tear-down an existing home and rebuild on the lot. Many people assume a tear-down project will be too expensive but it doesn’t add as much to the cost as you may think. If you and the realtor are able to make it work with your budget, don’t rule it out.
Every lot is different. An experienced realtor will know what to look for when assessing the land and how it may impact the land budget. For example, if a lot doesn’t have easy access to public utilities, we may need to look at additional line items in the budget for a well and septic. Likewise, a lot covered in mature trees or with a slope will require additional expenses to clear it and possibly add retaining walls.
If you’ve already chosen a home builder, your realtor should bring them in to evalutate a potential lot as soon as possible and before you’ve entered the design phase. The builder can offer additional guidance on what needs to be done to prepare a lot for construction and how it may influence the design and overall budget. In addition, the realtor should share a copy of the neighborhood’s indentures with the builder right away. Some communities will require builders to follow certain guidelines like meeting square footage minimums or using certain materials — both of which may impact a client’s budget.
Navigating Financing and the Closing Process
Once the best lot has been found, a realtor can help secure it and navigate the financing process. They’ll develop a contract that contains a contingency that gives the buyer an out while they do their due diligence. This allows the builder time to assess the property’s topography and utilities to ensure it’s buildable within your budget. If the builder finds cause for concern, the realtor can help you get out of the contract and begin the search for a new lot. If the property is determined suitable, they can help you move forward with closing on the homesite.
Timing is everything, and that couldn’t be more true when selling an existing home. A skilled realtor can take the builder’s estimated construction timeline and use it to coordinate the sale of your existing home. That way you can ensure your new home is ready and you have ample time to move before you close on the sale of your existing home.
At Hibbs Homes, we believe the relationship between a realtor and home builder should be symbiotic. By working collaboratively, we can ensure the client finds the best location for their dream home and receives the care and attention they deserve. Whether you already have a lot in mind or need to find the perfect place to build your new home, our team can help put you in touch with a real estate expert who understands the custom home building process and who can help you find off-market opportunities not available on the MLS. Get in touch with our team to learn more!