1. Determine how much you have to spend:You have decided that you are going to build. Now what is the next step? Before you go any farther you should sit down with a financial counselor from a lending institution and get an idea of exactly how much money that you will have to complete the project from the purchase of the land to the final nail being pounded and the landscaping completed. Once you have that number you can begin.

The very first question you need to research is: how much is it costing a square foot to build a house. This will vary from modular to stick built but with a few quick phone calls to local contractors and modular home companies you can get a ball park figure. Next you should have some idea how large a house you would like to have. Once you have figured that out you can multiply the dollar per sq. foot figure you got, add another 20% and that will determine whether you can afford to buy land and build a house. It will also determine how much you should spend on land.

2. Find a mortgage lender: You can ask your realtor for a recommendation. Usually they are the best source of knowledge because they usually know who is lending for construction loans, who has the best rates and who they trust. Once they give you several names you should call and see whose personality fits your style. They will work hard to get you a loan at the best rate that they can find.

3. Find a Realtor: You can ask friends, family or go to Realtor.com and search under the zip code that you are interested in. You will get bios and links to realtors websites that will help you make a decision. You can also go to the Coldwell Banker: www.coldwellbanker.com and look for a realtor in your area. If you are thinking of a second home in a resort area or you are moving a call to a Coldwell Banker broker will get you a personal referral to that area. It is important to work with a professional who knows the area where you are thinking of building. Each area of the country has its quirks. different state and local rules, and you can save precious hours by hiring a realtor to represent you. If your realtor is a professional ,she/he will have a list of qualified and bonded professionals to help you through the process of purchasing, building, house cleaners, home management companies, etc.

3. Hire an attorney: Again it is important to get personal recommendations on lawyers. Once you have found a lawyer that you are comfortable with, sit down with them and find out what they recommend that you should do to protect yourself and insure that you have a pleasant experience. It may be that after they have helped you with the purchase of your land, they can then recommend ways to work with a builder. Because they know the area they will be able to tell you what builders have a good reputation and who does not.

4.Hire an architect:After or before you have purchased the land you should hire an architect/designer or an engineer to place your house at the best possible site on the land. Also, to make sure that the house, septic and well are located where the permit allows. They will also be aware of any restrictions on the land and make sure that you are in compliance with these. You would be surprised how many times realtors and lawyers have cautioned buyers regarding the regulations only to find out that the buyer never really listened to the advise and they did what they felt like doing. This especially happens when it comes to tree cutting restrictions.

5.Hiring a contractor: Local recommendations are the best. If you have hired an architect/designer or engineer their recommendation along with your lawyer and real estate agent will be the best way to find a contractor. The contractors reputation in the community is key. Make sure that his business card is a local address and phone number at that he actually has an existing office. It is a good idea to visit with him at his office. Make sure that you get a list of references from him and make sure that you talk with these people. Although your contractor does not have to have the latest model truck or car, you should make sure that it is not a bucket of bolts. This could say something about his fiscal abilities and his attention to detail. I would be concerned about the contractor that wants cash. If he is asking for cash it might be a sign that he is shirking responsibilities in other areas. If you want to check out a contactors finances Money Magazine recommends www.contractorcheck.com. For $13 you can check on a contractors finances.

5. Enjoy the process: If there are areas that you do not feel comfortable with, hire a professional to help you. This may be as simple as choosing paint colors or as complicated as a lighting plan. Perhaps you want an advocate on the job to make sure everything is being done to your specifications, there are many people you can hire. Whatever you decide, the building process should not be something you dread, it should be an opportunity for you to create your “dream home.” There are many decisions to be made and if you do not like to make them, hire someone that can do that for you. It will be cheaper, than the delays you will have if you cannot make a decison.

If you go to my website: www.peggysmithvt.com you will be able to search land, and look for professionals in every field. For the last 34 years I have sold land for sub-divisions or for individuals looking for their piece of paradise. Land and building have been one of my specialties. My husband, Shap owns Patterson and Smith Construction. He works with me on many projects and I have learned many aspects of the building trade which helps me find customers the land that suits their desires. But my best advise to you is: Have Fun!

4.

In the latest issue of Money Magazine (April 2008) there is an article (Dream It, Build It) about building your dream home. The article makes an argument stating that” now “might be an excellent time to build that home. It says that “behind the dark clouds hanging over the houseing market is a very compelling silver lining. The cost of building your dream house is coming down.”

Why would this be? Well, there are many factors, but the main one is; the cost of raw materials has dropped and contractors are not as busy as they once were. In interviewing some modular home companies I have found that the demand for modular homes is so far down that some companies are running on a skelton crew. What this means to you the consumer is; dollars are not coming out of your pocket. Money Magazine states that framing lumber is 18% cheaper thtn 18 months ago and that drywall is selling for 40% less.

Not only are prices dropping in the construction area ,but also land prices have dropped in Vermont; in some cases 48% of the asking price from 2006. This is not as true in resort areas such as Stowe. The list price of land might not have dropped, but the actual sale of land has done so. We have seen the listing price of large lots over 25 acres being dropped while the smaller lots prices have stayed the same. Overall, large or small lots have not seen a record number of sales, and this has lead to lower sales prices.

Before one rushes out to take advantage of this slump in the market there are some essential rules that one should follow:

1. Hire a real estate agent that is knowledgable in land sales and land development. This could save you headaches and thousand of dollars. That agent will know exactly what you might not know regarding state and local permits, septic issues, well issues and what lies below the surface, both figuratively and literally. Each town and state has different requirements and it is necessary to know all about those before you start. For instance: your daughter has a horse that she is devoted to, you purchase a parcel of land only to find out that horses are not allowed in the sub-division. Or you wish to build a 1200 sq. ft. house and the covenants state that you can build nothing less than 1500 sq. ft. In Stowe, you might be subject to Ridgeline Overlay District. You have just purchased a parcel of land with a trememdous view of Mt. Mansfield, but there are trees in the way. Your intention is to cut them so you have an unobstructed view. Then you find out that you are in the Ridgeline Overlay area and you have to leave many of the trees to create a canopy around your house. Just as you would expect someone to hire you because you are an expert in your field, you will want to hire a real estate agent to advise you.

2. Get pre-approved for a construction loan. I have seen many people that have not done their homework before they start the process of building a home. If you do not have the cash to build your dream home, it is important to go to a lending institution to make sure that you qualify for a construction loan. A construction loan is similar to an equity loan. You draw down on the amount of money that you need, or that you are qualified for, until you finish the home and then you convert this into a permanent mortgage. Some lending institutions will do a construction to perm loan which locks in an interest rate at the beginning of the construction period. This protects you from rising interest rates.

3. Hire an architect, a designer or buy existing plans before you build. If you truly want to save money it is important to have plans before you start and not give your builder something sketched on the back of a napkin. There are many magazines that have plans available. However, unless you are building on a flat suburban lot with water and sewer available, these plans may not be suitable for the terrain of your lot. Site, views, terrain, exposure etc. are all important factors that must come into consideration. Designers and architects can save you thousand of future dollars because of their knowledge. This may be in the form of passive or active solar, green building, something as simple as the way the plumbing in the house stacks up from kitchen to bathrooms. Do not always rely on the builder to know these things. Their job is to contruct the house and they usually rely on the designer, or architect to have consulted with the experts on structural walls, plumbing and electrical. This does not mean that your builder would not double check any aspects of the plans and bring to your attention defects if he saw any.

In the next series I will discuss how to assemble a confident team to guide you through the process. Meanwhile, you might find my phamplet on ” What You Need to Know Before you Purchase Country Property” a helpful guide to get you started thinking about a land purchase. You can call me at 802 253-7358 ext. 13 and leave a message with your name and address and phone number or you can email me at www.peggysmithvt.com and I will send it to you immediately.