Ray’s Take As the real estate market recovers, more families are pulling out their dream home plans. They would be wise to watch that classic movie, “Mr. Blandings Builds His Dream Home.”
Cost overruns are almost a given. It’s largely a question of just how high those overruns rise, and when to pull the plug. There are so many potential pitfalls. In addition to asking if you can afford the home, you need to ask if your marriage is strong enough to survive the project.
However, with exceptional and detailed preparation, you might keep your dream house from becoming a financial and family nightmare. It starts with knowing everything about the building site – zoning ordinances, soil, flood zone, easements, etc. – and making sure your plan is suitable.
Working with your architect, come up with as detailed specifications as possible. The more specific you make the plans and materials now, the less likely you’ll want expensive change orders later. Plus, your financing needs to be in place before ground is broken, complete with a plan for over-runs.
Then there’s the contract with the builder – a reputable builder you’ve carefully vetted. There’s a lot of money at stake here, so be sure you understand every contract line.
Once building begins, visit the site often with the builder. Be hands on and keep track of details. If you eliminate something, be sure it is documented. The same goes for any additions. Ask questions and monitor bills. Make decisions promptly, as delays can cost money.
Stay on top of things, and as your home nears completion, maybe you won’t be in the same position as the very real person who inspired that movie. His budget was $11,000 (this was the 1930s) the house came in at $56,000. Just multiply that by 10 to bring things to 2013 costs.
Dana’s Take More than one marriage has fallen apart while that supposed dream home was being built. The idea of building a new home is exciting, but there’s a lot of hard work that goes into it, too.
Obviously, communication is key for partners building a home. However, it’s more than agreeing on a budget and kitchen size. There needs to be cohesion over the division of the myriad jobs necessary to see a new home to completion.
From picking out details like cabinet handles and light switch covers to keeping a constant eye on worksite activity, there’s a lot to be done. Deciding up front who will do what and how you’ll keep each other in the loop is crucial.
Your builder and all the contractors need to know you are a united force and on the same page when it comes to important – and even minor – decisions. If you aren’t, not only will your house not turn out as desired, you may develop cracks in your relationship as well.
Ray Brandon is a certified financial planner and CEO of Brandon Financial Planning (www.brandonplanning.com). His wife, Dana, has a bachelor’s degree in finance and is a licensed clinical social worker. Contact Ray Brandon at firstname.lastname@example.org.