Your guide to building a new home

Here you’ll find everything you need to know and all of my tips before breaking ground on your dream new build with my guide to building a new home.

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It’s already been two years since we moved into our new build house! How can it feel like that was a million years ago AND like it was yesterday at the same time?

Check out my video here for a quick little before and after tour!

Now that we’ve been here awhile, I wanted to address some common questions that I get about the process, cost, and how we made decisions on lot, where to spend money on upgrades, and so much more.

I asked you to submit your questions regarding building and buying a new build home, and I’m here to answer them based off of my experience.

So let’s dive in and get started!

And make sure you stick around, at the end is a note from my CPA husband, his thoughts from a budgeting perspective, and a few tips on spreadsheets, interest rates, and property taxes. Sounds like a party to me.

First, let’s recap the timeline.

We bought our lot and signed the contract in December of 2019

They broke ground on our lot in January of 2020

We moved in at the end of September 2020

And yes, building a home during the pandemic was extremely nerve wracking. We had to list our home for sale before closing on the new house, and in the middle of 2020 everyone was still super unsure about what was going to happen to the housing market due to the pandemic. Luckily where we live, the pandemic had little impact on the housing market, and in fact home prices continued to soar.

We also lucked out to start building before the pandemic really disrupted supply chains and timelines. Our build took about 9 months. I’m hearing now that some builders are still around that same timeline, while others are giving a 12-14 month timeline. Definitely make sure to check with your builder!

One way around these timelines is to buy a spec home. Most builders building new build communities will have at least a fe spec homes. These are typically homes that someone started building and backed out of, or ones the builder has chosen to make the selections for, and sell as is. Because of this, you can get into them much faster than building from the beginning. The down side, you don’t get to pick the selections.

Also something to know, we knew going into this that this would not be our forever home but that we would plan to be here for a long time. Knowing that definitely helped lead us in making certain decisions.

Ok, now that we’ve covered that, here are your questions:

Why did you choose a new build vs a fixer upper?

There were a lot of factors that went into this decision. Ultimately for us location was the most important thing for us. Most of the new builds where we live are fairly far away from where we wanted to be. However, a few new build communities started popping up closer to where we wanted to be, so we decided to go take a look. We figured they would be way out of our price range, but we were pleasantly surprised to find that they weren’t. They were actually around the same price as homes in the neighborhood we were looking at nearby, where all the homes were older and needed work.

Now that of course isn’t always going to be the case. But I highly encourage you to take a look and run some numbers. If we had just gone off of our assumptions and not gone and looked and compared the numbers, then we wouldn’t be in the house we have now!

How do you find a builder?

We found new build communities by driving around and seeing signs for them. Then we researched the builder for each of the communities we saw. Some of them had less than stellar reviews, so we passed. You can also search online for new build communities in your area and see what builders come up.

I definitely recommend doing your homework and researching builders online. I will say, they pretty much all had some level of negative reviews, but just like on Amazon, you have to look at the majority of the reviews and WHAT the negative ones are about.

It helps also to go take a look at some of the homes available from the builder, and not just the models. For instance, there was a builder near us who offered great deals and quick move-ins, however when we toured the homes that we would actually be moving into, we saw many examples of poor craftsmanship that scared us away. The model homes will always have the best fixtures and highest craftsmanship, so take a look at the actual homes if you can to see what you’ll actually be buying!

Completely custom or have models to choose from?

We ended up working with a builder that was part of a master planned community. One day we would LOVE to do a completely custom build, but at this time that just wasn’t in the budget for us.

Our builder had a choice of quite a few models. Within the model there were additional choices and customizations you could make. We were able to make some structural and floor plan changes and then we all got to go to their design center and choose all of our finishes.

I’ve heard this type of build called a few different things, and I think the terminology can vary based on where you live and the builder. We have heard it referred to as a “production build” and “semi-custom”.

Average cost of a 2,000 sq ft home?

This is going vary GREATLY depending on where you live, as well as the housing market. Prices are extremely different now than when we bought. However, a few things that I didn’t know about buying a new build are that, we locked in our pricing when we bought out lot and signed the contract in December of 2019. While our home was being built the cost of the homes was going up. So by the time we closed in September 2020, the price of our home was much higher than what we had locked in. Meaning, we already had equity in the home. Now this was certainly aided by the housing market we bought it, but something to keep in mind.

How did you choose your lot?

Our lot was EXTREMELY important to us. We wanted a larger lot with no back neighbor. Our first home was surrounded by neighbors and had that “fish bowl” effect where it felt like every home was looking in on you. One of the biggest reasons we wanted to move was to get away from that. A lot of the new build communities here like to cram houses in together on tiny lots. That was NOT appealing to us. We would have rather bought an older home on a larger or more private lot and renovated. We were willing to walk away if we weren’t able to get a lot to make it worth it. While this is not our forever home, we do plan to live here a long time, so location and lot were non-negotiable.

Lot Process

We have learned that different builders do the lot process differently. The one we used, at the time, did a bidding system. So they would release a few lots at a time, email those interested, send out a link to submit your bid. Everyone had to submit their bid by a certain date and time. Highest bid won. There were no counter offers and no one knew what anyone else wa s bidding until it was done.

Sounds shady? It kinda was to be honest. However, we did like that our fate was in our hands. Another builder we were looking at did a lottery system. So EVERYONE who was interested put their name in, and when a lot would be released they would draw a name. If you were picked, you got that lot, no choices on which lot. And if you never got picked, you never got one. And as time went on more and more people put their name in for a lot. As you can imagine, I bet that got really frustrating.

And another builder we looked at did first come first serve. So anyone who walked through the door that was interested got their name put on a list. As lots became available they would start at the top of the list. If whoever was first wanted it, then they got it. If they passed, they would call the next person on the list and so on.

Each one has its own pros and cons. So while the way our builder did it felt a little shady with them trying to get at much money as possible, I did like that we had a bit more control as the buyer than just hoping we got picked, or hoping that we found the builder quick enough to be high on the list.

Lot Premiums

Another thing to take into consideration is lot premiums. Our builder put a premium on more desirable lots. So say a regular lot would go for $5K, a larger lot, or a lot with no neighbor, etc, would start at $10k (these are just examples – lot premiums varied widely around the community). Then you would bid from there. So you could submit your bid for 10k, but if you are bidding against other people, you would need to try to guess how much over 10k they would bid, and beat them. Not to brag (I’m totally bragging) but after agonizing and over thinking our bid for days, we ended up beating out the next highest bid by $200. Pretty proud of that one!

Once we had the lot, we had to factor that into the overall price. So say we only wanted to spend 100k after buying the house and upgrades and we got the lot for $10k. Now we only had 90k of budget left for the house and upgrades (these number are just as an example). My husband is a CPA, so you know that we tracked every dollar meticulously!

What did you look for in a floor plan?

We had our set number of bedrooms and bathrooms that we wanted. But outside of that we wanted an open floor plan, with an open living room, dinning, and kitchen area. We also wanted a large primary bathroom with a large bathroom and closet. Our last house had a TINY primary bathroom so we definitely wanted to upgrade there. And finally we wanted storage storage storage! Our last house had NO storage so that was high on our list!

We did know going into it that this was not our forever home, and so due to budget we did make a few concessions, but knew what our top priorities were that would make the move worth it, and stuck to those.

Where to splurge and where to save?

With the type of build we did, we were able to make a lot of selections from structural/floor plan changes to design finished and selections. However, EVERY change had a price tag, so we had to stay on top of our budget and stay true to what we really wanted and what was worth the money. As we learned in our design meeting, the budget can balloon QUICKLY. My poor CPA husband looked like he was about to pass out when they told us how much all of the selections we wanted were going to cost.

NOTE: Our builder did not include landscaping so we had to budget for that outside of the house cost, upgrades, and lot. Some builder will provide front yard landscaping so make sure you know which yours does. We also had to have the landscaping completed in the front yard within 90 days of closing.

Here’s how we made our selections:

We had one meeting at the design center where we had to make ALL of our selections. It was a seven hour (fine it was 3 hours but it felt like 7 ok) meeting and I had a migraine by the end of it. I did find out after the fact that some people requested their meeting be split into two shorter meetings.

However ultimately I’m glad we did it the way we did because I’m an over thinker and I would have second guessed some of our choices if I’d had too much time to think on things. What did help is I already knew a lot of what I wanted going into it.

I would suggest creating a mood board of things you like that you can reference. You can also create a board on Pinterest where you have pinned designed you like before the meeting. This way you can reference these boards so that you don’t get distracted by the TONS of options they have. Yes that uber modern stair railing they have one display looks super cool, but is that actually in line will all of the traditional stairs that you have pinned to your board? Just a little something to help you stay on track.

Another thing that helped is that I am a DIYer. I fell in love with DIY after buying our first home, and I did so many projects turning that home into a place we loved and that was our style. I knew I could do that again. So we were able to pass on some upgrades that I knew I could do myself and save money.

Therefore we focused more on upgrades that would be difficult or impossible to change later, and didn’t opt in to ones that I knew I could do, such as adding a tile backsplash in the kitchen. Builders can also way over charge for these things. For example, they offered a built in bench in our mudroom for a few thousand dollars, something I knew I could build for a few hundred.

But how to decide? During the meeting they go through each option and you make your selection. During that portion of the meeting we said YES to every single upgrade we wanted. Then they tally it all up and tell you the total.

At that point we knew how far over our budget we were, and how much we needed to shave off to be in budget (this is the part where I saw my husband go as white as a sheet). So at that point we went back through the options to start removing items. There were certain non-negotiable items and others that were easier to remove.

We focused our money on upgrades such as:

Premium Lot

Extra sq ft on the back of the house

Upgrades in the kitchen.

We had just finished remodeling the kitchen in our last house and didn’t want to do it again so soon. Plus one of the upgrades was a layout option, that was easier to do upfront.

We upgraded the layout, the cabinets, the appliances, the countertop, and the sink. I know some people opted to upgrade the countertop after the fact, but we liked some of their options so chose to just go ahead and do it. If I hadn’t loved any of the upgrade options, I would have gone with the base counter and then switched it out after.

Where we skipped?

No backsplash, base level faucet (I didn’t like their faucet options and knew I could get one I loved cheaper) no cabinet hardware (again didn’t love the options and knew I could add them later for cheaper)

Upgraded the downstairs flooring. Ripping out tile flooring is a HUGE pain, so it was worth it to us to do this up front.

Primary bathroom:

We did a decent amount in here since this was a big upgrade for us from our last house, we wanted to enjoy it right away. We upgraded to a layout option with a separate soaking tub and shower, along with matching countertops and cabinets to the kitchen. We saved on the flooring. The base flooring wasn’t terrible and somewhat matched out aesthetic. We did upgrade it from 12×12 tile to 12×24 tile for a more updated and modern look.

We also insulated the garage, added outlets and a service door for the trash access in the backyard.

Throughout the home we added recessed canned lights as well as a LOT of outlets. The more outlets the better in my opinion!

We chose to buy/add all window coverings and light fixtures ourselves after the fact because we knew we could do it cheaper and get exactly what we wanted.

TIP: if the builder is not installing window coverings, you will have NOTHING covering the windows when you move it. We went into the home after they finished the final drywall inspection and measured all the windows we wanted to buy shades for. That way we had them ready for us to install the day we moved in. And to help spread out the cost, we only ordered enough for the main Windows we wanted covered: our bedroom, bathroom, living room, and kitchen. For the rest we covered them with things like sheets and paper bags (classy, I know) until we could slowly purchase and install them all. We actually still have one window left in the laundry room!

So basically: splurge on the permanent stuff like: lot, structural options, layout, things behind the walls, etc. Then if you have some budget left, splurge on the harder to change things, like kitchen cabinets and countertops. Save on the things that are easy to add or change after the fact, or that you don’t mind living with for awhile.

Could you opt out of anything?

Our builder did not allow for us to “delete” anything that came standard. For example, I knew I wanted to customize our closet with the IKEA PAX system, so we asked them if they could not add the basic builder grade shelf, and they said no. But it’s worth it to ask because some builders will allow for this!

How to not get overwhelmed?

Take it one decision at a time. Make a budget and stick to it. Make a spread sheet to keep track of everything. Have a lot of patience. Know the style you are going for before heading to the design center.

Things you wish you upgraded or wish you didn’t upgrade?

I actually don’t think I have any regrets. We were very meticulous and thought out all of our decisions. Anything we didn’t upgrade we either didn’t need or I can add it.

How to budget, what to buy first for the new home?

GO SLOW. Do not rush to buy new things for the new house. I know it’s exciting, but it takes living in a home for a little bit before really knowing how you use each space and how you want it to function.

I knew when we moved in that I wanted a lot of new furniture. Our last home was a good bit smaller so a lot of the furniture didn’t fit, and my style had changed. I still waited a year to buy a new dining table and chairs and what I have now is perfect.

I did immediately buy a new bed frame/headboard because I knew exactly what I wanted, and the size of a bed is what it is.

I also went ahead and ordered new couches for the living room because I was CONVINCED I knew what I wanted. And now 2 years later, the way we use the space has changed and I want something else. You live and you learn I guess.

Regarding budgeting, create a spreadsheet of all the new items you want and their cost. Order them in order of importance. Save for each and when you can pull the trigger go for it! I like to group by room, so if there is a room I want to do a project in, like say building a fireplace, I’ll do that project and then buy any new items I wanted for that room, and so on.

Why didn’t you build a pool at the beginning?

This is maybe the one thing I do wish we had done during the build process simply for the ease of it, but we had our reasons for waiting. Our builder had an option to do landscaping and a pool (if you wanted) while the house was being built so that it would be done when the house was done.

HOWEVER, you had to use the companies they were contracted with and it was WAY expensive. We just didn’t have the budget at the time, and we also really didn’t know what we wanted. While I am currently in backyard renovation purgatory, I am glad we did it the way we did.

TIP: we knew we wanted to do a full backyard project, but didn’t have the budget or know what we wanted when we moved in, we had to do the front landscaping within 90 days of moving in, so when we had that done, we had them put gravel in the backyard (we live in AZ this is common here) so that we didn’t have to live with dirt indefinitely.

We did that in our last home and living with a dirt yard especially with dogs is a NIGHTMARE. And while, yes, we had to pay for it, we got to enjoy a dirt free yard for a year and a half, and they will repurpose the gravel in the new yard design (again, common here in AZ).

I’ve been documenting the backyard progress on my Instagram page if you want to check it out! I’ll do a blog post on the entire process once it’s done!

Would I do it again?

Absolutely. But let me clarify. Would I go through our experience again to be where we currently are? Yes. But for our next home we want to do a fully custom build – but we will have to save up for that one!

And now, a note from the CPA Husband:

Hi – Brock here. You’ve heard of me earlier in this article, and if you follow Angela at all on social media. Generally, my job is to be a stick in the mud about money and ruin all her fun – just kidding.

But as the resident CPA, my self-appointed job during this process was to keep tabs on the numbers and make sure I was comfortable with how everything shook out in the end, in terms of budget anyway. Here are my tips to making sure the home building process works for the number-conscious members of your family!

Spreadsheets are your friend:

You cannot have enough spreadsheets! I had one for just about every aspect of the process – from overall budgeting, to figuring out how much we wanted to put down, to what the cost of all the upgrades would be.

Being a visual person, I needed to see how each of our dollars would be best applied to the whole process. Is it better to put more toward the down payment, or can we spend a bit more in the design center and not increase our monthly payment that much by lowering that lump sum payment? I would spend hours running scenario after scenario until I got comfortable with what we ended up doing.

By no means am I saying you have to do that, I found it actually kind of fun in a weird way, but for the investment we were making, I did not want to be house poor. Visualizing the way we spent our dollars made that possible for me.

Interest rates:

Interest rates are on everyone’s mind right now. We were very fortunate to have rates at historic lows when we went through this process, but you need to know that if your build takes 9 months or so to complete, only in the last 30 days can you “lock” your interest rate.

If you try to lock the rate before then, the lender will charge you a premium to do so. With rates climbing up, your purchasing power does not go as far as it used to. There’s not much you can do to combat this unfortunately – just be prepared that rates may climb during your build, and you should have some buffer in your monthly budget in case of rate increases before your lock.

A good question to ask is how much home can you really afford? Now, I won’t give financial advice in this article, and there are tons of “rules of thumb” out there, but you want your home to be a place you love, not something that will make you nervous each time the monthly bill shows up.

Work to figure out what your monthly take-home pay is, and back into a mortgage payment (don’t forget to include insurance, HOA and property taxes!) that fits your budget.

Property taxes:

Quick side note on property taxes – plan for them to jump in your second year in the property – typically the first bill or two you receive will be based on the “unimproved” value of the property – so essentially, the dirt.

After your county assessor revalues the property, with a brand new house on it, the value on which they assess property tax will go up, and pretty significantly. If you have property taxes paid through escrow, plan for a jump in those payments each month after the mortgage company does their math to figure your new payment based on higher taxes.

All that said, I couldn’t be happier in our new home, and I would go through all the spreadsheets, nerves, and anguish again in a heartbeat, because I know all the work we did upfront was worth it!

Questions or Comments? Leave a comment below or send an email to hello@handtreatedhome.com!