Summary. A construction consultant can save you time, money and worries when building your own home.
Hi Carl my question is two parts. First, is it worthwhile for me to hire a construction consultant like UBuildit for the construction of my new home? Their fee is 8% of the cost of construction.
I have met with the UBuildit home builder that would be assisting me and it seems like a fantastic idea, but I am very ambitious and any cost savings for me is a plus because I want to learn to build and not have someone ushering me along.
Although it would be great to have a home building consultant who already has contractors and subcontractors that are ready to help build my house.
Secondly, should I purchase the lot first and pay closing costs and then turn around a get a construction loan that converts to permanent financing and refinance the lot on the construction loan. I am a little vague on the best way cost wise to go about this. I am a shopper so I will do anything that will benefit me.
Thanks and I love the website. This is truly a great service and the best place I have found for credible, comprehensive, in-depth knowledge and advising anywhere on the web and elsewhere… FOR FREE! I feel like I should be paying you.
It can be worthwhile for you to hire a construction consultant. Everything has a price. In your question lies your own answer. It starts with, “I have met with the builder...it seems like a fantastic idea.” If I felt like that, I would be inclined to use them.
I have heard good things about UBuildit, and if they have an inside track to construction lending (which according to their web site, they do), that’s a big, big plus.
As for buying the lot and then getting a construction loan, NO!
Do NOT do that unless you know positively that you will be able to get a construction loan.
Ideally, if the seller of the land can wait, close on the land at the same time you close on the construction loan. I do it all the time. It is called a “simultaneous” closing.
If the seller won’t wait, I would not do anything more than give the seller a very small deposit (earnest money) contingent upon at least a construction loan approval with a “clear to close” letter. See my lot purchase check list for other “contingencies”.
Carl Heldmann, byoh.com
Note: You may also want to read Construction Site Manager.