We embarked on a once-in-a-lifetime adventure a few years ago. We constructed our first custom home, which was also our dream home. We knew we were in for some tough days after talking to other couples who had gone through the same thing. We discovered some money-saving strategies along the way and wanted to share some of them with you. Are you planning to build a home soon? If that's the case, take a deep breath, grab a notepad, and hold on tight–this is going to be a rocky trip. Also, keep in mind that what doesn't kill you makes you stronger. Another piece of advice for husbands: the wife is always correct. Always. Trust me. Let's get started on saving money while developing your ideal house. Here are some tips for saving money when building your dream home!
Understand Mortgage Rates
Mortgage rates are at their lowest levels in history, making today probably the best time to buy or develop a home. Even though it takes time to build a home and you must deal with construction loans, it pays to remain ahead of the curve and lock in at the best rate.Sell Your House Without Using a Realtor
Consider selling your house for sale by the owner if you have the time and reside in a desirable neighborhood (FSBO). You can keep the money and avoid paying the 6% realtor commission. We chose this path since we were not in a hurry to sell the residence. We also believed that we lived in a "high demand" area and that putting a For Sale sign in the front yard would suffice. It did, in a way, because we had several phone calls and an offer on the first weekend. Unfortunately, the buyer could not obtain finance, and the transaction fell through. Unfortunately, the second agreement also fell through. We were disappointed, but we received a second offer not long after. This was when we realized that being our real estate agent would need a little more effort than we had anticipated. However, FSBO might save you much money if you're committed to saving money and prepared to give up some of your free time.Hire a Realtor at a Reduced Rate
We realized we needed to increase foot traffic to our house after the first few deals fell through. We used FSBO.com since we weren't ready to engage a real estate agent. It enabled us to obtain an MLS listing, which allowed every real estate agent in the market to view our home and placement on popular websites such as Realtor.com and Zillow. We would only have to pay a 3% commission charge if a real estate agent displayed our house; however, we could sell it without paying a thing to the realtors if someone found our house directly.Work with a Fantastic Real Estate Agent
As our house neared completion, we decided it was time to enlist the help of specialists. We had quite a few "lookers," and in retrospect, our house was maybe a touch too high. Although we got two offers, it was difficult because the competition was outshining us. We found a local realtor who was very knowledgeable about our community. After our first meeting, we realized how little we knew. In comparison to our past experience, we felt significantly more at ease after just one planning meeting. Our house was off to escrow two weeks later after we received an offer.Get a new insurance quote for your house.
Paying too much for insurance irritates me the most. Why? Because insurance companies hope you'll stay with them for a long time, they're delighted to keep raising your premiums year after year. Make sure you shop for home insurance today if you haven't done it in a while.Apply for a 0% APR credit card.
While building your dream house isn't inexpensive, using a credit card with a 0% APR can help you save much money. These cards provide a 0% APR (zero interest) for 12 to 21 months, allowing you to change some of your home-related expenses without incurring interest for a year or more. That's a fantastic deal, whichever way you cut it. Here is the most excellent 0% offer to assist you in saving money while building your dream home: Discover it card - The Discover it card is another 0% APR card to consider. This card is a no-brainer because it offers 18 months at 0% APR plus rewards. This card offers 0% APR for an entire 18-month period. Meanwhile, you'll get 1 point for every dollar spent on all purchases, plus 5X points in quarterly rotating categories. Once you've accumulated enough points, you can exchange them for statement credits to help you save even more money on your new dream house. This is without a doubt one of the BEST DEALS for anyone looking to build a new house.Prepare for the worst-case scenario.
We were not excited about the prospect of carrying a second loan. We needed to be sure we had a backup plan in place to avoid such a disaster. We contacted some local real estate investors who would pay us just over $1000 per month if we could locate a renter for our house. The house would remain in our name, and they would pay us an agreed-upon fee after five years. On the bright side, we wouldn't have to pay our mortgage because the $1000 would cover it. The disadvantage was that the mortgage would remain in our names, which the bank would not approve of. It wasn't perfect, but it was a reasonable fallback option. Fortunately, our house sold quickly, and we were spared from this ordeal. Given the current status of the real estate market... Plan B is essential.Go to a lot of different places.
Do you actually know what your ideal home is? After looking through the home books, we drove about and viewed as many properties as possible. We traveled to St. Louis (90 miles distant) to obtain a different viewpoint. Suppose you can locate a newly constructed region. In that case, you may be able to see several model homes that will provide you with numerous ideas.Hire a Professional Architect
LendingTree can help you save money on your property. I'm terrible at visualizing what things should look like! Furthermore, we had purchased a property with the rear of the house facing a lake and the front-facing a culdesac. We required a distinctive layout that no other home book could offer. (Thank goodness we borrowed them!) Thankfully, the architect we engaged was able to help us create an open (very open!) floor plan that kept the lake as the focal point as you entered the house. Finally, the floor plan could not have been more ideal, and it is all thanks to the architect.Select the Right Contractor
This is critical! We were forced to utilize their builder by the development where we bought our land. This might be a terrible deal in many instances. We had seen his work and had visited some of the other homes he had constructed, so we were confident in his abilities but concerned about the overall expense. We worked with the developers to seek independent quotes so that we could make sure the builder's price was reasonable (more on that next). DO YOUR HOMEWORK if you have the choice of hiring your builder. It may be a nightmare if you hire the incorrect builder. Request a list of references and examples of their work before hiring a contractor. WRITE IT ALL DOWN. And by everything, I mean It's remarkable how quickly people forget what they were talking about. Subcontractors are included in this.Make a Cost Estimate
The second-closest price (out of a total of four bids) was $40,000 higher! This is a simple approach to saving tens of thousands of dollars before starting the construction process. We were obligated to utilize a specific builder. Still, we were free to shop around to ensure his quote was reasonable. FORTY THOUSAND DOLLARS, to be precise. Right away, that was a significant saving. What is the significance of the distinction? We have no idea, to be honest. According to our sources, some home builders do not require the work and hence price themselves out. Our contractor employs a three-person crew and outsources the majority of the work (drywall, paint, concrete, plumbing, etc.). The most crucial thing, of course, is that the builder sticks to his bid. Have someone else look at the bid if it seems too good to be true (we did). We understood that the allowances for the kitchen and baths were a little low for what we wanted, but the other builders' bids were as well.Have a conversation with your builder
Communication with your builder should be better than communication with your spouse. Seriously. How will they know what you want if you don't tell them? Make sure everyone is on the same page by being specific. Trust me when I say that it will save you a lot of problems and disputes in the long run.Locate a Reliable Banker
I was drooling and worried that interest rates might rise. Your banker is the essential element that can save you a lot of money upfront and thousands of dollars in interest over the course of your mortgage. 30-year mortgage rates were approximately 4.5 percent when we initially started construction. We were able to lock in our rate at 5% by the time we were 30 days away from finishing. I was in constant communication with him (and I mean constant) the entire time, ensuring that we pulled the trigger at the appropriate time. Regrettably, we were a little ahead of schedule, and rates fell. Fortunately, we were able to re-lock our rate at 4.875 percent by switching lenders without incurring any additional fees.Work out a construction loan agreement.
Most builders will require a substantial down payment (typically around 10%). They will send you invoices to deposit with your bank on a regular basis. To our surprise and delight, our builder only wanted a $5,000 down payment (which we paid in cash), but if you need to go that route, here are some recommendations on getting a personal loan from a bank. He wasn't hounding us for more money, however. Indeed, I recall my banker remarking on how impressed he was that our builder had only gotten 40% of the construction loan when our home was well over 80% finished. According to a rough calculation, we saved $4-$6k in interest due to this. Not bad.Use Free Shipping Offers from Online Stores
Our kitchen specialist estimated $450 for cabinet hardware. The same cabinet pulls were $135 on eBay with free shipping. We also purchased bathroom vanities that included the vanity, top, sink, and faucet as part of the package. We were able to acquire a better deal on eBay and free shipping, and the ability to negotiate with the seller. The eBay store owners offered us discounts in both cases: $75 in one case and $195 in the other. It's proof that asking doesn't hurt!Look up wholesalers on the internet. Rather than purchasing anything at a store, make your own.
We were able to get a $6,000 front door delivered to our property for $2,300 unfinished. Savings of $3,700! All we needed was someone to stain it for us. Fortunately, my father-in-law is one of the most helpful people I've ever met. If you don't have a handy family member, ask your friends and coworkers for help staining your door for a few hundred dollars.Take advantage of bargains on lighting.
My wife had a specific set of lights in mind and purchased them from a variety of sources. Compare prices and purchase from the seller who offers the best deal. She looked through the Sunday newspaper fliers and compared Home Depot, Lowe's, and Menards costs. When we required their lights, at least one of them had them on sale. Remember that you can typically find a discount lighting store online that matches or beats any home store's price. For instance, the chandelier she desired cost $873 from a local distributor's catalog. She discovered the same chandelier on clearance for $174.99 by browsing online. It only gets better from there. See the following suggestion.Never buy something online without first looking for a coupon code.
Most online stores offer 10% to 20% off with coupon codes. Rotate coupon codes, and you'll almost always find a deal. Even Better Example: When she bought the sale chandelier, she discovered a coupon code that gave us an extra 15% off clearance products. The chandelier, which was original $873 but was on sale for $174.99, only cost us $149 plus shipping.Make the most of it or lose it
We were able to purchase all of our appliances using my father-in-employment law's discount; however, don't assume that the employee discount is the better deal. With the employee discount, a tiny beverage refrigerator that we liked cost $900. We discovered a similar tiny fridge for one-third the price, $379, plus a $50 mail-in refund, by searching about. Complete your homework.Survive with the Help of Your Friends
Do you have friends or family who can help you save money on your home? Our house plan (architect), kitchen and bathroom countertops, and cabinetry were all done by friends. We then bid out the cost to ensure we genuinely saved money and discovered that we had saved a significant amount.Get a Workout
Do you avoid getting your hands dirty? If that's the case, you might wish to skip this section. If not, go right in and start working up a sweat. Make use of your expertise (or find someone who does) and do some of the work yourself. We were able to tile the custom shower, hang the siding, and install the kitchen cabinets. Thanks to a talented father-in-law, we lay all of the hardwood and tile floorings on our own. Yes, it's exhausting. It was absolutely worthwhile. We were able to save thousands of dollars by completing some of the work ourselves. But proceed with caution. If you don't know what you're doing, this money-saving tip could cost you more. Make sure you have the necessary talents and know-how to use them. You don't want to have to redo a task that was done poorly.Be aware of all of your tax credits
Recently, numerous laws have been passed by Congress that benefit many homebuyers and builders. We would have received a $6,500 credit under the most recent amendment to the first-time homebuyer's tax credit if we hadn't been six months short of satisfying the 5-year requirement- Doh! Fortunately, we qualified for some notable credits for making our house more energy efficient. For our energy-efficient windows and insulation, we received substantial tax benefits. The geothermal unit that we had installed received the majority of the credit. We got lucky and received a 30% tax credit on the unit and installation costs. The credit previously had a limit of $2,000 if implemented in 2008.Gather Boxes
I DO NOT UNDERSTAND HOW MANY BOXES YOU WILL REQUIRE. There is no such thing as having too many. We contacted our local grocery stores, who agreed to provide us with as many boxes as needed. Not to mention the 40 or so storage bins we already had. Overall, I loaded almost five loads of boxes into the back of my Tahoe, plus another 20 boxes from a friend.Consider Your Moving Costs
We had never moved before, so we looked up moving businesses in the Yellow Pages. We contacted three different businesses to get estimates on how much it would cost to relocate our home. Remember that our new house is about 2 1/2 miles away from our previous one, so we didn't have to travel too far. The first two movers never came out to the house and billed us $80 and $107 per hour, respectively, for a move that would take 6 to 8 hours. It cost $24 for each box to have them pack them for us and $34 if the boxes were delicate (glassware and dishes). Do you see why getting a lot of free boxes makes sense? The third business came out to inspect our home to determine how much we needed to relocate. They offered us $132/hour and claimed that the other businesses had underestimated the time it would take to transfer us, resulting in a higher bill. Maybe, but we weren't entirely convinced. Fortunately, our fourth option came from a friend's recommendation. They had hired three workers from a nearby furniture business to help them relocate their homes. After calling them, we learned that moving the entire house would only cost us $475 in total, and all we had to do was hire the U-Haul, which cost us $49.98 plus $20 in gas. We were sold.Plan ahead of time to determine what furniture you'll need.
With our new home's increased size, we realized we'd have to purchase some new furniture, most notably a couch. We planned ahead of time and discovered a fantastic discount couch for a fraction of the price we would have paid if we had missed the sale. For example, we were continually on the reasonable out for good prices on wall hangings, rugs, and other furnishings. Have you lately finished constructing a house? If that's the case, how did you come up with the cash? What have I overlooked?