A professional couple came into my office in September 2024 asking for guidance in identifying and maneuvering through the myriad of issues and tasks involved in building a custom residence.
As longtime professionals in the medical and IT fields, they valued and practiced the decision-making process that leads to an informed choice—one that requires in-depth research, analyzing the situation, developing options, evaluating alternatives, selecting a preferred path, and acting on the decision. They just didn’t know how to apply that process to custom home building, and that’s what we were hired to help them accomplish.
Step 1: Getting Started
Before finding a realtor, this couple had:
- Purchased a wonderful, several-acre home site in Pima Canyon, a gated foothills community, years earlier
- Accumulated the significant wealth needed to build a new home
- Decided they were ready to move toward their goal
Furthermore, the client’s sister had a very unsatisfactory experience with a custom home builder in the Dallas area, and they were eager to avoid the same mistakes. After finding us through a combination of searching the internet for agents with expertise selling custom lots and asking Realtor friends for recommendations, we scheduled an exploratory meeting to ensure we were ready to work together.
Step 2: Setting Expectations
At the first meeting, we presented an overview of the primary tasks at hand: understanding and accepting realistic timelines, deciding on their financing method, choosing a lender, choosing a builder, choosing an architect, and making the decision to begin.
Most people don’t realize this can be a three-plus-year process, depending on:
- The clients’ temperament and ability to take initiative and respond promptly to design decisions and changes
- The types of materials, appliances, cabinetry, and finishes chosen
- Availability of the builder and architect
- Labor and supply chain issues
The size and style of the desired home can also impact the overall timeframe. At the very least, under the most efficient conditions, the expectation should be 6–9 months for the design process and 16–18 months for permitting and construction.
Step 3: Securing Financing
The clients’ plans were to build a 4,000–5,000 square foot home with a detached casita. Knowing the scope of the project could put them well over a $3M construction budget, the financing options were a critical factor in determining whether they could move forward.
In speaking with construction lenders, we learned the benefit of having purchased their lot years earlier. They had bought the lot for $600,000, and due to changing market conditions, it would now appraise at approximately $850,000. Owning it free and clear meant they had more than enough equity to meet the lender’s requirements—even with a construction budget exceeding $3 million.
We then helped them analyze different lenders’ rates, terms, policies, drawdown procedures, and most importantly, reputations for being client- and builder-friendly. We learned in this process that not all lenders do business in the same way, with some being more nimble in dealing with issues that arise during the building process. After reviewing their options, they made their lender decision and were ready to move forward to interview custom home builders.
Step 4: Selecting a Builder
The couple requested that we introduce them to three builders, all of whom had built homes in the Pima Canyon community valued at over $3 million. After a bit of research, the builders were identified, appointments were made, and it was time to meet them on the land and move on to the next phase with our clients…
…Stay tuned for Part Two!
