Step-by-Step Timeline for Building Your New Home
From saving for your down payment and securing financing to the final walkthrough and closing, there are many steps involved in building your new home. With so much on the go, homebuyers may be wondering, how long will it take to build my new home, where are we in the process, and when can I move in?
Some families could be in between houses before closing, making a cross-country move, or they could simply be excited to start the next chapter of their lives.
The average completion time for building a single-family home is nearly eight months, including 30 days allotted for applying for and receiving permits, according to 2018 Census Bureau data. If builders are just counting days from breaking ground to closing, construction takes about 6.7 months. Overall, the data indicates that single-family houses built for sale took the shortest amount of time, at 5.9 months from authorization (receiving permits) to completion. Custom-built homes led by independent contractors and homes built by homeowners took longer, at about 11.4 months.
You can safely estimate that your new home will take six months to build. Keep in mind, these estimates will vary depending on location, the current real estate market and demand for new housing. And a larger, multi-story home with unique add-ons will take longer. Weather plays a role too; unfavorable conditions can cause construction delays.
Are you in the market to buy a new home or somewhere along the process before seeing the finished product? Here’s our step-by-step guide of what to anticipate when you’re buying a new build.
Step 1: Secure New Home Financing
Before choosing a lot and deciding on customizations comes some number-crunching and paperwork. Most homeowners can’t afford to pay cash for a new home so your first step is to show your builder you’ve qualified for a mortgage.
It’s your responsibility to save for a down payment, get your credit score in great shape, shop around for the best interest rates, and decide on a lender. Some households could qualify for government-backed loans, such as Federal Housing Administration (FHA) and Veterans Affairs (VA) loans.
All this legwork can take a year or longer before you start shopping for a home. Homebuyers should be saving as close to 20 percent of their home’s price as possible for a down payment – this could take years. Proactive homebuyers can also apply for a pre-approval so they know how much lenders will allow them to borrow.
It’s always worth discussing financing options with your builder. Prominent builders and developers are usually affiliated with or have wholly-owned mortgage subsidiaries. If you opt to work with your builder on financing, they’ll often provide great perks, including price breaks on your home, free upgrades, or paying your closing costs. Some even offer a cash incentive or pay your home insurance premium for the first year.
In some cases, the builder’s financing may be easier to secure because they’re familiar with the construction and all the details. They may be more inclined to offer you discounts or approve your loan application because you’re purchasing one of their homes.
Step 2: Sign Your Sales Contract
Buying your new home is a legal transaction between you and your builder. Before ground is broken, you’ll need to get the sale’s primary conditions in writing.
Your contract will document important details including:
- The price you have agreed to pay for your home, what it includes and any additional fees or expenses
- Agreed dates, from an estimate on closing to deadlines for securing financing or making decisions on customizations and upgrades
- Your payment schedule, including an earnest money deposit and subsequent payments as construction on your home progresses
- Details on materials and the finished product, so both parties are aware of what will be ordered and used for your home’s interior and exterior, along with the specifications and location
Before you sign on the dotted line, you need to triple check that you’re satisfied with and are protected by the terms and conditions of your contract. Your contract involves a large sum of money – your new home will likely be the single biggest purchase you’ll make in your life.
Step 3: Pre-construction Legwork and Permits
Behind the scenes, your builder will work on the next hurdle: getting all the permits and approvals required to start construction. Your builder is already incredibly familiar with zoning laws and knows which permits are required so you can leave this step safely in their hands.
These checkpoints ensure your local government has approved the design, zoning and grading for your home, right down to the electrical, plumbing and septic systems. Local officials do their due diligence looking over lot plans, blueprints and the mechanical work your builder is proposing to make sure the project is safe and follows the latest building codes.
Once builders receive permits, work is underway within weeks up to a month, according to the Census Bureau. The site is prepared for construction, including tree and rock removal, levelling the land and staking the lot.
Step 4: Construction Begins
Here’s where you pass the torch to the experts as you’ll see the rough shape of your home take form. In the first few weeks of breaking ground, your builder will take on the “three Fs” – footings, foundation and framing.
Your builder will pour the footer (or concrete) to support your home’s foundation, and the foundation and framing are laid out. As it’s framed, you’ll see a skeleton of where windows and doors will be placed, as well as distinct floors – if your home has more than one story. Your builder will protect the home with exterior sheathing to keep it dry as construction progresses.
This step is the major structural heavy lifting to construct the framework. Expect at least home inspections during this phase as municipal officials will need to give clearance on the foundation before your builder can proceed.
It’s worth noting that this stage of the home-building process is heavily reliant on the weather. The concrete foundation won’t set if the weather is too wet and rainy, for example. Construction crews are also much more productive on days where they aren’t battling bad weather.
Step 5: Visit Your Design Center and Make Customizations
As the nuts and bolts of your home come together, you need to pay a visit to your builder’s design center to select all the customizations that will breathe personality into your home.
You’re about to get closely acquainted with your builder’s design center – a March 2020 study conducted by Wakefield Research suggests that nearly 40 percent of new homebuyers spend more than 20 hours in the design center, allowing their imaginations to kick into high gear. Forty-five percent of buyers exceeded their budget in upgrades by over $21,000 on average.
Here you’ll work with a designer who will walk you through your builder’s packages for the interior and exterior of your home, show you what is standard and what your options are for upgrades. You’ll discover it will be difficult to make decisions on colors, materials and finishes. But you’ll likely have two to four appointments at the center to make your selections.
By the end of your visits, you’ll have every detail ironed out, from the color of your roof shingles, carpeting and countertops right down to the blinds on your windows, and the knobs on your kitchen cabinets.
Step 6: Interior and Exterior Work
If the first two to three months are earmarked for the foundation and shell, the next few months are dedicated to padding the inside and outside of your new home.
Your builder will focus on insulating the roof, interior and exterior walls before drywall is installed. Walls and ceilings are painted, flooring is laid out, and closets, kitchen cabinets, crown moulding, built-in shelves and other woodwork are put in place.
On the exterior, bricks, stucco, or stone are installed while siding is applied, along with shingles and rain gutters, completing the look.
Keep in mind, your builder will be constructing your home according to the colors, materials and fixtures you selected. If you’ve requested a front porch or backyard deck, these will be built according to your specifications. You can count on your builder to communicate with you if they have any questions about your customizations and upgrades.
Your builder will also work on the inner workings of your home, ensuring that heating, ventilation, and air conditioning (HVAC) is installed, and that plumbing and electrical systems are up and running. You can expect another municipal inspection at this stage. They’ll inspect everything from the electrical work to the handrails on your staircases and the number of fire exits in each room.
Step 7: Add the Finishing Touches
Your new home is nearly livable! Your property is about to become a high-traffic zone of electricians, plumbers and construction workers coming in and out to install light fixtures, faucets, bathtubs, toilets, sinks, shower units, countertops, and major appliances. Carpeting, tiling and hardwood floors are also installed.
One of the final steps is to pour the driveway and walkways, as well as install exterior doors. These are purposely saved for last – after heavy materials are in place – to minimize damage.
Your builder will also add grass, shrubs and trees to spice up the curb appeal.
Step 8: Home Inspection and Appraisal
Building code officials conduct their final inspection. If they’re happy with the final product, they’ll issue a certificate of occupancy.
Some homeowners also recruit the help of an inspector. If they flag any issues, you can create a thorough “punch list” where you can agree on which items your builder needs to repair. Depending on your contract’s fine print, your builder may be contractually obligated to fix every item identified on this list. You can forgo this step and act as an inspector too, flagging any nicks or defects you’d like your builder to address.
You can check the fit and finish of your doors and windows, for example. Do they open and close smoothly? You can also test the faucets to examine the water pressure and temperature controls.
Your lender will appraise your new home. An appraiser will walk through your property to assess its market value to make sure it is a responsible investment worth the amount they’ve agreed to lend.
Step 9: Final Walkthrough and Closing
If your home clears the final inspection, you’ll have a final walkthrough of your home.
Your builder will facilitate a home orientation session to show you how to run your house from top to bottom, including how to change filters, how to access water shut-off valves, and where to find your home’s fuse box. These sessions, also often called pre-settlement meetings, are their handover to you and a guide to your home’s features and systems along with your maintenance obligations.
Take thorough notes and ask questions. Make sure you’re fully satisfied with the final product before closing the deal, too.
At closing, you’ll sign the paperwork to complete the sale. The title to your property is officially transferred over to you and your builder will deliver a new set of house keys to you.
Step 10: Settle in and Get Acquainted with your New Home
Here’s the moment you’ve been waiting for . . . moving in! After months of saving up, designing your home, and watching your home-in-construction come to life, you can finally settle in.
It’s time to unpack, furnish and decorate, and also establish new routines and traditions in your new space. Hopefully with all the carefully thought out customizations made, settling in and decorating should be a seamless process.
Get to know your new home, especially in its first few months and as seasons change. Builders’ warranties typically apply to the first year of construction so if you notice any issues, you can flag any repairs that need to be made.
Welcome to your new home!Continue to Step 6 >>