If you are entertaining the thought of building a new home then this is sure to get you started in the right direction. Long before you hire a general contractor get out with a local real estate agent to show you the new homes in your area. Be willing to pay them for their time on a renegotiated deal($100 per hour is not altogether out of line). You will not want their help to write contracts, locate builders, or become involved in your building process. In the end this will save you some money, a lot of money. Here is the objective: Learn what others are attempting to sell their inventory for and the features found within the homes they build. Find out the names of the subcontractors who poured the foundation and flat work, the framing, the plumbing and electrical. Who installed the cabinets and supplied the lighting? Who installed the roofing and hung the sheet rock? Investigate with the city or county in your area as to what costs are involved in obtaining a permit. Are there any impact fees and local improvement districts. Are there bond measures in the area that need to be part of the equation? The idea here is to learn whether you can afford to actually build a quality home.
Once you have done your homework you will need to ask yourself can I handle this myself or will I need the help of a General contractor. If you decide a contractor is the way to go for whatever reason then interview several and insist that you see their latest work. A reputable builder will discuss with you their fee for acting the part of the general contractor. You can expect the general to oversee and catch mistakes made by the subcontractors. They also will handle the ongoing processes of inspections made for every phase of construction. The most important element that the general contractor is going to do for you is have an eye out for easy to fix mistakes before the project gets too far along and then you are unhappy with the results. You will want someone who accepts your direction without question and when they do question you it is because they have some constructive direction to give to you. As an example the foundation is to be raised and the foundation stem wall has a vent directly under where a future door is to be installed to the patio, or the light switches are found in awkward places--both difficult fixes after the fact but simple if caught early on.
Should you decide this is something you can do then you may want to hire a general contractor for consulting only and then before the process:
1. Make a determination of the floor plan keeping in mind the required building setbacks for your area (city or county can give you that information. These setbacks will direct which homes will fit on the building lot you are considering.
2. Hire an architect to draw your plans. Talk to three candidates for the job and be specific what you want from them. It may not be necessary to have every light switch, outlet and flooring type on the plan unless you are building something very complicated with theatre rooms, communication centers, surveillance systems and the like. Perhaps the most important factor is that everything that you want will fit. If you want a 50"x80" soaker tub then the support and deck will easily add 24 inches on each dimension making the space 74"x104". Architects are notorious for measuring the area and putting the tub in a 50"x80" area and when the house is framed the plumber tells you that all that will fit in the space is a 30"x60" tub and you will not be amused. If you are building a 2 story make sure an extra tread or two is on the plan for the stairway. Seldom does an architect know the issues of framing and it ends of being very tight at the bottom or top of the stair system.
3. Now armed with a set of plans in both blue lines (construction ready) and a PDF file contact at least 2 subcontractors for every line item of construction. Get detailed bids from them. Let them know you are shopping and want their best price but a price that will not compromise their quality. You'll want them to stand by their bids on their quality why else would you hire them? If you hire a general contractor as a consultant have them make some recommendations but make it clear to the subs that they work for you and that you will not tolerate kick backs to the general contractor. Any contractor you hire will need to prove to you that they carry general liability and workman's compensation insurance. They must provide a current binder from their insurance carriers prior to ever getting to the job. Here is a general list of who is to provide bids to you: Excavation contractor, concrete foundation contractor, concrete flatwork contractor, framer, building supplier for the build pack, finish pack with what is recommended by your building rep, cabinet maker, plumber, electrician, fire sprinkler installer(if required by code), insulation contractor, sheetrock supplier, sheetrock hanger, sheetrock taper and texture, window supplier, fireplace installer, mason for stone work on interior and exterior, floor covering vendor, hardwood installer, tile setter, finish carpenter(make sure doors are set square so they don't swing on their own), Paint contractor(don't hire the cheapest bid), siding installer or stucco/stone contractor, central vacuum installer, Heating and Air company, lighting company, roofer, landscape installer and so forth. Simply email plans to all of these contractors. When you have all bids back (and not a moment before) make a decision as to whether can you afford to build this house. It is not a bad idea to add 10% to all bids for cost overruns in upgrades and change orders.
4. Discuss the financing options with your bank and the rules for making a draw against the construction loan. As sides note-never pay anyone for work completed until the work is to your satisfaction and they provide to you an unconditional lien waiver.
5. If all the bids are agreeable, the bank is ready to loan then go buy the building lot with the closing to occur upon final loan approval and issuance of a building permit. Don't pay interest on a construction loan until you can actually begin construction.
6. To build a sustainable home you may want to consider a concrete foam block exterior, install a Daikin heating and cooling system, increase insulation values to R-23 on 2x6 walls or a closed cell foam, a radiant barrier in the attic and exterior walls and maximize floor insulation. A stucco exterior will add some R value and will increase the overall market value and appeal of the home. Generally, these items will nearly double the cost of these items but will create a home that can operate on nearly one-half of what standard homes might include.
7. Some banks may not allow you to construct this home and give you the loan. Approach the General contractor and negotiate an agreeable contract for him to contract build the home, meaning he will go get the loan. Protect yourself by requiring a performance bond, a financial statement or other means of a safety net against the possibility that the builder might have financial troubles and take him with you. Even better if the builder can simply build out of his own cash and he becomes the bank. You close when he completes the job.
Regardless of how you go about building a new home, it can be a pleasure if you slow down and get educated about what you want and how you want it and then have the project bid by reputable contractors who have a sterling reputation for customer service and have a proven track record. Real estate agents like to get involved in building new homes when in fact they know very little about construction methods, code and the processes involved in accomplishing your desired result. If on the other hand you end up deciding to go out and buy something existing then hire a competent broker to represent you financial interests.