NEW CONSTRUCTION

Building your new home: Step-by-step process for new construction stages, phases & terms

Below is the new home construction process in chronological order that Monique measures and monitors throughout the transaction:

Home Site Hold

  • Typically, it runs around $1000 and the builder will give you a specific time they will allow before releasing the hold on the home site.
  • If buyer decides to move forward with the purchase, these “hold” monies will be applied towards the earnest money required by builder.

Contract

  • Most builders provide their own standard contract but you will have to provide any addendums that pertain to your company/brokerage firm.

Making selections for the home for the exterior and interior

  • There are standard features that the home comes with. At this stage, as the client, you can upgrade the standard selections provided by the builder.
  • It is recommended that the buyer pay out-of-pocket for their upgrades so it is not rolled into the mortgage loan. Rolling it into the loan can risk the home passing appraisal. Appraisal is on current market value, and will not include 100% credit for the expense of these upgrades. If the requested upgrades are a minimal amount, then there should be no problem adding them to the final sales price.

The architectural department creates blue prints for the home within the first 2-3 weeks of having a binding agreement.

  • As soon as the architectural department completes the drawings and they are approved by you the Buyer (if changes were requested), the builder requests permits for the home site you chose.
  • Most of the time, the plans must be approved by the Homeowners Association (HOA).
  • Building permits and blue prints will take up to 30-45 days from date of contract.
  • Once you have a valid building permit, a surveyor must lay out the lot, and the house corners.
  • After blueprints and building permits are secured, everything is released to build.

Prepping the lot for construction.

  • Remove sod, trees and scrub brush from the building site
  • Level and grade the building site
  • Black drainage/erosion control fence and gravel are placed on the home site where the driveway will be located per blueprints.
  • Dig footers for the home
  • Lay block for the foundation
  • Sub-flooring added on-top of the foundation
  • Vapor Barrier is installed
  • Framing of the home begins
  • Framing inspection required before proceeding with insulation, wiring, plumbing and HVAC work
  • Mechanical drawing walk-though
  • Roof & shear added to the home
  • Frame inspection
  • Electrical and plumbing added to the home
  • HVAC ductwork installed throughout home
  • Brick, siding or cedar shake is applied to the exterior of the home
  • Install wall and ceiling insulation. Batted insulation only at this time.  Blown-in insulation will be one of the final steps in the building process.
  • Drywall hung
  • Drywall taped and mudded
  • Home painted, interior and exterior
  • Cabinets installed in kitchen, bathrooms, laundry rooms, etc. as specified
  • HVAC finish work completed
  • Flooring to be installed, including wood, tile, ceramic and carpet
  • Add blown-in insulation, in attic areas, if required
  • Install decorative columns (non load-bearing)
  • Paint exterior trim and siding
  • Trim out interior of the home
  • Complete the utility ditches outside the home, including inspection
  • Complete all exterior flatwork, including patios, driveways, and sidewalks
  • Final inspection
  • CO (Certificate of Occupancy) issued to the builder.
  • 1st Walk-through with buyer
  • 2nd Walk-through with buyer
  • Home goes to closing

Depending on the builder, as the client, you may have additional walk-throughs during the building process that are subject to change.  These additional walk-throughs could include:

  • Pre-drywall walk-through (This is to make sure that the electrical and low voltage is in the place your client selected)
  • Mechanical walk-through after framing
  • New Home Orientation (1st walk-through where items that need to be completed are noted with blue tape)
  • Final walk-through and closing

Again, building permits and blueprints take up the first 30 – 45 days from date of contract.

  • When everything is released to build, the home site is suitable for, and has been approved for, the exact location that your home will be built.
  • If your home is to be built on a slab, gravel for the foundation is placed, a vapor barrier is added, and the main utility lines are installed (water, sewer, electrical, gas, etc.).
  • After that, the foundation is poured and the framing starts.
  • The utilities are roughed in, and the roof is installed.
  • From there, windows, brick, insulation, and inspections are done.
  • Then, drywall, paint, trimming-out the utilities and the trim work is completed.
  • After that, showers and bathtubs, cabinets and countertops, hardwood, tile, plumbing fixtures, lighting, fireplace hearth and surround, landscaping and the exterior are completed, then, and only then, is the carpet installed.
  • After everything is complete, you have the final building inspection. Please note, this is the standard workflow for new construction, but may vary by builder.

A commitment letter is sometimes required by the builder.

  • This letter is from the mortgage company that the buyer is working with.
  • It is only provided if the file has been submitted to underwriting and the lender has completed a VOE, has requested tax transcripts and other materials to assure that the buyer is FULLY APPROVED.

 Earnest money amounts depend on the builder.

  • Typically, if it is a custom builder, they will request 10% of the contract amount.
  • If it is a floor plan that the builder offers and the client agrees to build as per the builder’s plan without making any changes, it is between $3,000 and $10,000.

Most Commonly Used Construction Terms:

  • Stick Built: The home is built on site and the home is built using a more traditional method of home building, rather than a “modular” type of building process. The “sticks” mentioned usually refer specifically to the superstructure (or framing materials) of the walls and roof.
  • Tract Built: Parts of the home are typically built off-site and then transported to the home site to install.  Typically, such a process is used for homes that are part of a “tract housing development”.
  • Home Site: Refers to the land plot, or the lot that your house will be built on.
  • Fascia Board: A board affixed to the rafter ends along the roof eaves.

Time and time again, Monique has heard of the frustration and disappointment that buyers of new home construction have gone through because they feel totally lost and their agent didn’t have the knowledge to guide them through this complex process.

It is not an easy process to buy or sell an existing property and we all know it can be a stressful, tiring process. Building a new home is even more complex, tedious and stressful, and can be much more frustrating if you, the buyer, do not have proper guidance from a Realtor that is an expert in this area of real estate (New Construction) to represent you.  It is much more than simply writing a contract/offer and then handing you the keys at closing!  As a real estate professional, this entire process requires diligence at every step, paying attention to detail and being in constant communication with the project manager, the on-site agent and you, the buyer.

To be able to assist you (the buyer) to the extent that is needed, the real estate professional needs to understand the end-to-end process of building a house, from scraping and grading the home site, pouring concrete, framing the structure to electrical, plumbing and HVAC.  In addition, your real estate professional needs to understand proper insulation, brick and mortar work, roofing options (materials, colors, and warranty), city inspectors, job site inspections, permitting, landscaping, certificates of occupancy (CO), builder warrantees, HOA rules and regulations, blue prints and so much more.

As a real estate professional, Monique leverages the fact that she previously worked for a local builder by utilizing the knowledge she acquired in this field with buyers of new home construction that she represents.  Monique has  taken many classes on new home construction, built many homes over the course of her career and continually studies and updates her knowledge base as needed.

New Construction Listings