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Be Your Own General Contractor - Planning Stage

Where to Start?

  1. Make a budget

  2. Deduct the cost of the land

  3. Determine the size & style of house you can afford

  4. Find house plans that meet your criteria

  5. Determine cost to build this home

  6. Get an appraisal of finished house + land

  7. Make your decision


  • Cash + Loan = Budget

  • A loan officer will look at your:

    1. Credit history, cash available, income from all sources, & total monthly debt obligations

    2. Contact several lenders for comparison


  • Sloping Lots

    1. If you want a basement or live in an area with poor drainage, look for a sloping lot

    2. You can frame & finish a daylight basement

    3. If you don't want a basement, look for flat lot to avoid excess backfill or unused crawl space

  • Barren lots are cheaper to build on, but cost more to landscape.

  • Wooded lots cost more to purchase, but less to landscape, & already have mature trees for future resale.

Soils Testing:

  • Test soil for load bearing capacity & ledge on site, which may require blasting.

  • Test should be included as contingency in purchase contract, & seller should pay for it.

  • Look up "Engineers, Consulting" or "Engineers, Foundation" in for testing

** Have the broker earn their commission by arranging soils tests, & make sure it is in your contract with them.

  1. Your realtor should be a member of the National Association of Realtors

Building Permits, Zoning, & Title Insurance:

  • Your local building department will only issue a building permit if the property is buildable.

  • Consider zoning carefully to avoid neighbors building stores, offices, trailer parks, or industry.

    1. The broker or zoning department can clarify

  • Check all costs to get water / sewer, gas, electrical, & phone service to your property line.

  • The seller of the land should always provide a title insurance policy, insuring the property has a "clear title".

Checklist for Buying a Lot

  1. Building Permit - Can you get one for the site?

  2. Neighborhood - House fit, quality of schools, attractive street?

  3. Transportation - Access to public transit?

  4. Pollution - Air, water, and noise?

  5. Zoning Restrictions

  6. Sewage / Water Available

  7. Soils Tests Made

  8. Direction of Slope

  9. Drainage - Observe after heavy rain if possible.

  10. Test Borings

  11. Size of Lot

  12. Trees

  13. Clear Title

  14. Cost - Counteroffer 10 - 20% below asking.

How Much to Spend on Land?

  • Aim for 25% or less of budget, otherwise size & style of house must be adjusted.

  • Cost to build calculation:

    1. Find comparable new home for sale

    2. Deduct land cost, commissions, & 25% builder profit

    3. Divide "cost to build" by square footage of heated area

    4. Divide 75% of budget by "cost to build"; for square footage you can afford, then find house plans

Water & Sewage:

  • If city provides water / sewage, you need to find out costs & how to tap into them.

  • If you need septic, you will need a permit & perc test.

  • Regulations will tell you how far a well must be from any leach field of a septic system.

  • A large lot is best if you require sewage & well.

  • Find a well digger familiar with the area to get an estimate of the depth.

  • Some diggers charge by the feet they drill, others by a fixed price contract.

House Plans:

  • Two story homes are cheaper than one story with the same square footage because you're paying for 1/2 the roof & foundation.

  • Stick to plans as drawn, or consult an architect for changes.

  • You don't need to redraw plans for minor changes, but you should for major changes, & decide on these changes before construction starts to avoid major cost overruns.

  • Major functions of design:

    1. Room sizes, room placement, traffic flow, kitchen workflow, closet space, number of baths, & overall size

  • You'll need about 6+ sets of plans (yourself, lender, & each major sub).

  • Include spec sheet with your plans (paint, carpet, trim, hardware).

Cutting Construction Costs:

  1. How many square feet do you really need?

  2. One story or two?

  3. What is the shape of the house?

  4. What style roof?

  5. What time of year are you building?

Parts of Plans

Plot Plan:

  • A plat (map) of your lot with the position of the house drawn or blocked in.

  • First, the lot is drawn, then all setbacks required, then the location of the house.

  • The exact location of the house may vary slightly, but should still avoid necessary setbacks / zoning.

Spec Sheet:

  • The list of materials for finishing your house (paint, carpet, trim, fixtures, etc.)

Foundation Plan:

  • Shows overall dimensions of the house & locations of load bearing requirements, such as piers, steel reinforcing rods, vents, & basement slabs.

  • A basement house will show walls, windows, doors, & plumbing in the basement.

Floor Plans:

  • Shows outside dimensions plus locations of windows, doors, plumbing fixtures, & large appliances.

  • For bid purposes, it is best to have the electrical, cable, phone, & HVAC drawn out in advance, either on the floor plan or separate.

Detail Sheet:

  • This shows cabinet details, interior cross sections, & wall sections to show materials making up the wall (brick, sheathing, studs, insulation, wallboard, etc)

  • Detailed section of a foundation wall showing construction technique, drainage, & waterproofing.

Outside Elevations:

  • These sheets show all four sides of the finished house.

Cost Estimating

  • Never accept "by the hour" bids

  • A "takeoff" is the number of items & square footage of materials needed for your house plans, provided by suppliers & subs.

  • Your estimated total cost of construction should not exceed 50-60% of the appraised market value of finished home.

    1. Excludes land, permits, & real estate commissions.

Balancing Costs:

  • Enter the actual price paid under "adjusted cost estimate" column.

  • If expenses run higher than estimates, you may have to trim costs.

  • Most of the heavy costs come at the beginning of construction.

    1. Excavation, septic, lumber, masonry, carpentry, plumbing, electrical, windows, doors, & HVAC.

  • Some expensive items don't add value to the appraised value.

    1. Handmade tiles, exotic wood trims, & granite countertops.

Cost Breakdowns

Permits, Fees, Surveys:

  • Building inspection department can give you the cost of permits & fees. Your lender will require a vacant land survey & a mortgage survey after foundation.

Installing Utilities:

  • Check with local utility companies.


  • Depends on locale, site conditions, terrain, & season of the year.


  • Varies considerably by slope of lot & height of basement walls.

Rough Lumber:

  • A good lumber company will put together your "framing package' free of charge to get your business.

Rough Labor:

  • This is the labor required to bring the house to the dry-in stage, contracted by square footage.

Windows & Exterior Doors:

  • Locally made are typically less expensive than national brands. Cost to install included in carpenter's framing charge.


  • Estimated by "squares" = 100 sq. ft.

Concrete Flatwork (Slabs):

  • Smooth finish concrete work, involving gravel base, styrofoam, wire mesh, expansion joints, & polyethylene.


  • You can get an accurate bid including cost of siding materials & any flashing required around windows & doors.


  • This bid includes fixtures such as toilets, sinks, & water heater.


  • Cost of install should include proper ventilation for bathrooms, kitchen, & clothes dryer.


  • In addition to electrical wiring costs, this bid should include all switches, receptacles, wires, panels, breakers, wiring built-in appliances, cable, phone, & code compliance.


  • Consult local experts for best value.

Water (Well):

  • For water tap-in fees, call local municipality. For a well, call a drilling company & get a firm max bid, as well as a price per linear foot drilled.

Sewer (Septic):

  • Call local municipality for sewer tap-in fee. For a septic field, call local contractor.


  • Prefabricated fireplaces are less expensive than masonry.


  • Bid should include labor & materials to hang, tape, & texture.


  • Bid should include kitchen cabinets & bathroom vanities.

Interior Trim:

  • Bid from lumber supplier including interior doors, moldings, closet shelves, stair trim, & carpet underlayment.

Interior Trim Labor:

  • Bid to install cabinets & interior trim.


  • Get a written bid for labor & materials.


  • You don't need exact models in the planning stage, but you need a ballpark.

Light Fixtures:

  • Figure an amount that will cover costs of all necessary fixtures.

Floor Coverings:

  • Estimate approximate costs for wood, carpet, tile, or other coverings.


  • Get a bid based on square footage.

Garage Door:

  • Get a price from local lumber company - with or without operators, installed or uninstalled.


  • Fences, sidewalks, decks, pools, sauna, etc.


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