by Lily Grace

Building your new home is an exciting and, at times, overwhelming experience. It is very routine for your builder, so you must actively participate in all aspects of the home-building process to ensure you end up with YOUR dream home.

Building your new home cannot be a passive exercise because there are so many decisions that you must make. If you are unable or unwilling to make these decisions, you will force your builder to make them and run the risk that your new home won’t turn out the way you envisioned it or cost what you thought. Here are five things you must know and take into consideration when building your new home:

Know your numbers.

Before you build your new home, run some numbers to determine whether you can afford to build the home you want. Most house plans offer a cost-to-build tool (usually for a nominal fee) to accurately estimate construction costs based on where you’re building. The numbers include construction costs, tax benefits, down payment funds, slush account funds, and other related calculations.

Once you’ve determined you can afford to build the house you want-purchase your house plan and head to the bank to arrange for financing. Home construction lending is a little different than regular mortgage financing. First, you’ll need a home construction line of credit to pay subcontractors and suppliers who perform work and provide supplies. Once your house is constructed, you will need a residential mortgage to pay off the construction line.

Check your builder’s reputation.

Many builders are out there, but not all are equally professional or talented. Do a little research to find out which builders have the best reputation. Whether you search for information online or get recommendations from your family and friends, find out whether a builder is known for doing quality work and being punctual. Architects and designers recommend using only builders who are National Association of Home Builders (NAHB) members.

Build with resale in mind.

No matter how much you love the house that you are building, it’s unlikely that it will be the last home you will ever own. With that in mind, you should be mindful of its potential resale value. Don’t add so many upgrades that you overprice your home for the neighborhood. Ask yourself if the features you’re considering installing will likely appeal to others.

Think Green.

Do your research to maximize the energy efficiency in the design of your new home. Your architect and builder can help ensure that your windows are south-facing so you get as much sunshine as possible heating your home. You’ll want to ensure that bathrooms, laundry rooms and garages are on the south side of your home and have small windows to minimize heat loss. Spend time choosing your insulation, HVAC systems, energy-efficient appliances, WaterSense faucets and toilets.

Don’t forget the punch.

Part of the final phase of building a new home is reviewing your “punch list.” A punch list is created at the end of construction and shows what still needs to be done or repaired. When you go through your final walk-through, you and your contractor will create this list the week before closing. Take notes every time you visit your construction site or do a walk-through. If you have a real estate agent, having them participate in the punch list is a good idea because they are not emotionally attached to your home and may have a better eye for identifying flaws.

When creating a punch list for your new home, keep in mind that problems typically fall into two categories: reasonable flaws and unreasonable flaws. Reasonable flaws fall within the tolerances of building construction (or insignificant flaws that generally do not affect the quality of the new home). On the other hand, builders must fix unreasonable flaws because these problems affect the home’s quality. Once the builder fixes any unreasonable flaws, the home is considered substantially complete, which means the new home is livable. Before closing on your new home, you’ll have one final walk-through to verify that the builder fixed the items on your punch list. As long as the new house has reached the point of substantial completion, you should be able to proceed with closing even if the house is incomplete.

Be sure you put the money to complete your punch list in escrow.

Doing so will allow you to move into your new home while still requiring the builder to complete the items on the punch list. The punch list marks an exciting time in building your new home because it is almost done! Remember not to get so excited that you breeze through your punch list because you don’t want to regret not taking the time to fix these problems.