It seems delays whether minimal or catastrophic are the norm when building a home. It might be that optimism is abound and everyone involved in the process believes that things will go smoothly. Perhaps delays could be avoided if more time was spent in the planning stages. There are a few key steps that should be taken before the process of building a home begins. The real estate forms that were signed to purchase the building site are the first set of forms on a long journey of paperwork ahead.
Financing will set the pace for every other step in the building process from the design of the home until the key can be turned in the front door. Building loans are a bit different from conventional mortgages, there is no property to appraise only projections, and building loans have expiration dates. Of course the same forms need to be filled out, to determine loan worthiness. Construction loans are typically interest only loans while the house is being built, the bank or mortgage company hands off the money, and while the home is being built only the interest is paid. The loan becomes due once the home is completed, at which point the loan is converted to a conventional mortgage. There is an expiration date involved, which means the loan will be do by whatever date it is expected the house to be completed by. On the legal forms that are filled out to secure the construction loan there will be a time frame that will set the date for the loan to expire if the home is not finished by that date there are ways to extend the loan but it will cost. Getting a commitment from the bank stating how much money they are willing to lend for this project will set a budget.
The design of the new home should be budget driven. If the bank committed to a $200000 than that is where the budget needs to stay. Designing a home that will drive the cost up of building because of square footage or because of exorbitant architectural details, will guarantee some delays as the owner scrambles to find additional financing. Keep the design realistic and make sure it will fit the budget.
Hiring a contractor will require some diligence on the future homeowners part. Set out the requirements of the project clearly and ask for bids in writing. Everything should be in writing through out the process to avoid any confusion. The best way to do solicit bids is to prepare a form detailing expectations and project specifications and present a copy to each contractor that is interested in the project, set a time frame for the bidding. Review the bids that are received carefully, the lowest bid is not necessarily the best bid. Once a decision is made there will be more legal forms to sign between the future homeowner and the contractor.
If all goes well in the planning stage than construction can begin there may still be some delays but planning is really the key to avoid as many costly delays as possible.