The construction season will soon be here. For those intending to build a new home this year, it is never too soon to start planning what is for most people the biggest investment of their lifetime. There are many perils and pitfalls which the new home builder may encounter along the way, but with good advance planning, the most common problems can be avoided.
The first and most important decision to make is the selection of land. If the land where you plan to build is riddled with rock or poor quality soil, it can present onerous challenges to the home builder. Before laying out a sizeable sum for a piece of land, it would be wise to ask the seller to provide results of test pits, which indicate the typical cross-section of what is in store when excavating for a foundation.
On occasion, the plans for one’s dream home have to be drastically altered to accommodate unforeseen bedrock lying just below surface, or perhaps an underground stream, or even a natural spring. The preliminary testing of land becomes even more critical if the house will be on a well and septic system.
One of the most common mistakes the prospective home builder can make is to select a standard stock house plan without having any particular piece of land in mind, let alone purchased. Standard plans can very quickly become non-standard when the constraints of setbacks, lot frontage or the overall available land dimensions are taken into account. It is much more advisable to finalize house plans after the land has been selected. Without the land in place, it would be somewhat like buying a pair of shoes without ever trying them on. How do you know if things will fit?
A common problem which many people encounter is cost overruns during construction, which may require some complicated financial gymnastics with the mortgage lender. Many banks or other financial institutions offer a “builder’s mortgage”. This is generally the same as a mortgage for the purchase of a house, except that the lender advances the money in stages as the house is being constructed. Interest accrues on the amounts advanced to date.
It is easy to see that if delays occur during construction, especially during the later stages, the cost overrun can amount to hundreds if not thousands of extra dollars in interest. If the amount of the builder’s mortgage has a preset limit, corners may have to be cut in the house design, or the owner may have to provide extra money out-of-pocket. When establishing a written contract with the selected contractor; ensure that the time factor is written into the agreement.
An important way to avoid unnecessary cost overruns is to finalize almost all design decisions up front during preparation of the plans. Next, obtain at least three estimates from reputable contractors, and stick to the original plans as much as possible when building. For example, deciding that you would really rather have a whirlpool bathtub than a standard one halfway through the construction might not impress the lender if you are near your mortgage limit.
After soliciting detailed and competitive estimates for the whole project prior to construction, add on a contingency amount in case changes become necessary. This allows for unforeseen snags or minor changes along the way and provides some flexibility in deciding on the finishing touches, which are easiest to make when the house is nearly completed. A minimum contingency for a new house should be 10% of the construction cost; for renovations the amount should be 15% to 25% since there are many more unknowns with older houses.
Building a house can be a highly rewarding experience, or a major nightmare, depending on the approach. The more advanced planning one undertakes, the better the final outcome, both in terms of dollars saved and the personal satisfaction of having a well designed home.
TEST PITS
Test pits are an investigation of the sub-surface conditions and contents of the soil to determine the suitability for the proposed construction. Test pits can be easily dug by a backhoe to the planned depth of the footings for the building. By checking an exposed cross-section of the soil, it can be determined if the land will be difficult to build on. Good quality soils will be free of organic material, clear draining and have adequate weight bearing capacity for the new structure.
Avoid soils with high percentages of clay, silt or sand. Bedrock and bog are very expensive to remove and replace with good quality fill. For unserviced lots testing by the health authority is mandatory. On a serviced lot for the average house three test pits are recommended.
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