Cincinnati Real Estate

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Kathy S. Koops GRI

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3 Things You Need to Know About Building a Home

filed under: Buyer or Selling posted on January 24th, 2008

Trying to make a major home buying decision?  Do you buy a used home or build a new home?

You have been house hunting for awhile and the thought of moving into a “used home” is turning you off?  Your house hunting efforts may have turned to new construction.  There is something so intriguing about being the first to live
 in a home- it’s new, it’s clean and hopefully,  all the colors match your furnishings.  

Whether you are building a multi-million dollar palace or contracting to build in a local subdivision, there are 3 things you need to know:

1. Know your builder

2. Know if your personality is suited to building

3. Know your budget

Check out the builder, don’t hesitate to ask for references, check with the Better Business Bureau and drive around the neighborhood and talk to the neighbors.  Many (but not all) require substantial down-payments and you need to do your research prior to signing on the dotted line.  You are probably wondering why I would even suggest “due diligence” since it is so obvious-yet you would be amazed at how many buyers sign first and discover problems later.

Is you builder a member of the Home Builders Association?  If yes, they have agreed to abide to a set of industry standards for construction and repairs.

Not everybody is suited to building a new home. Delays, construction issues, changing plans as the home progresses, cabinets not quite the shade you ordered often leaves some buyers regretting they ever began the project.  On the other hand, if you can handle a moment or two (or three or four)of stress, building a home can be worth the effort.  We have built twice and I would build again in a heartbeat.  (and yes we did encounter some stressful moments)

house of money

Budgeting is critical, even if you have signed to build a home in a subdivision.  The normal buyer is usually not happy with either the light fixtures, the carpet or the appliances.  These add-ons can significantly increase the final cost.  Take a close look at the fixtures, carpet/padding, appliances, furnace capacity and so on.   Make sure you spend your building dollars on items that are very expensive to upgrade later.  You can always upgrade carpet or light fixtures after a few years, it is much more difficult to add a few feet to the family room or additional space to the garage.

Using common sense, doing your research and having patience are all part of building a new home.  If you have some questions or concerns, contact me Call or Text

  1. Scenic City Scoop - Chattanooga Tennessee Real Estate Blog

    Hello Kathy,
    Great Blog on New Construction. Budgeting certainly is critical and checking the Sub division restrictions is also a great thing to do. Keep up the great Blog.

  2. Wendy

    We are planning to build a new home on our land. What is the plan B if there are problems like no more budgets in the middle of the project or the builder run away? What kind of contract should I do in advance for this matter? How can I research if my builder is a member of Home builders association? What are the questions I should ask my builder? The standard lists of things should come with the builder plan like cabinets, bathtub, interior, exterior decoration, etc..? Anything I should be aware of? What do I need to know about my builder?

  3. Kathy Koops


    Great questions-

    First suggestion –since you already own the land is to hire a “real estate” attorney to draw up contract. There are lawyers specializing in real estate- if you need names-email or call me.

    Things to consider:

    1. End Loan or Construction Loan. End loan is the builder carries the cost, you obtain a normal mortgage and close when construction is completed. Construction loan- you obtain a loan up front and “draw” to pay the builder when they meet certain benchmarks. With a construction loan- you are liable to repay loan even if the home is never completed. Also since you the land is in your name- you could still have problems with a end loan- if construction is not completed.

    2. Specs- you and your builder with have a comprehensive list covering every detail. Exterior details- types of siding, wood, shingles, brick… as well as interior-size of furnace, stud spacing, types of flooring, cabinets, windows, doors, bathroom fixtures, paint, finished detail.

    3. An architect, usually, provides the needed drawings and details needed to obtain permits.

    4. References- check with Homebuilder’s Association, Better Business Bureau and ask for references.

    This information just “skims” the surface of things to think about-but don’t freak out. Building a new home is a great adventure-if you are properly prepared. And since you already own the land- hire an attorney to protect your investment. If the builder is willing to buy the lot from you and all you have to make selections from their standard designs and upgrades and obtain end loan- you still may want an attorney to review the builder’s contract.

    Hope this helps answer a few of your questions.