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     If you are thinking of having your next home custom built,  I hope this page will give you an idea of what should be considered in the process. 

      I worked for 14 years in new home sales and construction estimating and budgeting, and  frequently sell new homes as a Buyer's Agent, but  I certainly do not consider myself an expert!    The ideas and suggestions included here are from my own experience.  You'll want to do a lot of investigating and homework before deciding to build a new home in metro Atlanta!

WHY DO YOU WANT A NEW HOME?

      The first question you should ask is, "Why do I want to build a new home?"   If it is to get all the new features, a special floor plan, or a more upscale neighborhood?   If so, I would recommend building in a new subdivision where you may find exactly what you want, or a builder who would be willing to build or taylor a plan for you.   

     In a new community, you'll have comparably valued homes around you, you'll have Covenants and Restrictions, and typically will have a Homeowner's Association to maintain the entrance of the subdivision.
You'll also have a better opportunity to check out the reputation and previous work of the builder(s).

       If you are looking for land, consider that in booming areas of north metro Atlanta, it is very difficult for the individual buyer to compete with residential developers for desirable acreage.   Affordable building lots and small acreages often are on main roads (which may or may not become surrounded by commercial property) or left over lots in established subdivisions.   To find desirable acreage with utilities at a good price, you may have to go much farther out from metro Atlanta.

      A left over lot in an established subdivision was passed over  for a reason.  Typically,  it was the lot nobody else wanted.  Perhaps the builder deemed it too difficult to build because of rock, underground stream, slope, etc..  If it is in an older area without public sewer,  it may not have passed the environmental tests for a septic system. 

     The costs of materials and labor has increased enormously in the last ten years.   Unless you  build a modest new home in an older subdivisions of higher priced homes, you may end up with the highest priced home in the neighborhood, with no comparables around you.   Keep in mind, that most subdivision Covenants and Restrictions and/or Recorded Plats usually dictate minimum square footage and architectural and landscaping requirements.

COULD YOU GET YOUR DESIRED FEATURES AT A BETTER PRICE IN A NEWER RESALE?

      Consider this:

       1.   Few builders negotiate price.
       2.   Beautiful landscaping doesn't happen without a LOT of work.
       3.   The cost of window blinds and treatments can be in the thousands...and it's not something that can
              wait.

        4.  In a resale community, you have an opportunity to see how the neighborhood is shaping up.

STILL WANT NEW?

       There are four types of HOME BUILDERS in metro Atlanta:

1.   Low production CUSTOM BUILDER.  These builders may only build a few homes a year.  They are  the builders who may be willing to build on your lot, but they are particular about what and where they build.   You'd not only have to work out your own permanant loan financing, you and your builder will have to decide who is responsible for the construction loan.  Be careful!

2.   Subdivision BUILDER GROUP.  Some developers bring in a group of independent Custom Builders.  These builders typically only build in one or two subdivisions at a time (often working strictly with one developer).   Each builder makes a commitment to "take down" certain lots from the developer, so they are not mix and match.  Vintage Properties is a popular developer of planned communites that offer a Builder Group.

This is a great  opportunity  to learn more about the builder and his/her previous homes.  Some of  these custom builders will  offer a number of floor plans and will do a lot of customization.  Some will consider  building the plan of your choosing, as long as it fits the style and square footage requirements of the subdivision, and will fit on the lot.  In most new neighborhoods, the  Architectural Control Committee must approve all plans.  Most Custom Builders offer only a one year home warranty (in addition to any manufacturers' warranties on appliances and fixtures).

3.  Moderate production CUSTOM BUILDER.  This would include upscale builders such as John Wieland Homes, who typically build out an entire subdivision.

4.     PRODUCTION BUILDER   Production builders can be found in almost any price range, and some familiar names in Atlanta would be national companies with local offices, such as  Ryland Homes, Morrison Homes, Centex Homes, Pulte Homes, or local companies like Bowen and Bowen, Richardson Builder Group, etc..  Production Builders offer a limited number of popular plans and typically work from a Purchase Order system.     They know exactly what materials and labor will cost for to build each plan, making it more economical for them to build and you to buy.  They may offer  several "elevation" styles for each plan, and an extensive number of options and upgrades that have been previously priced out.  

It is very unusual for a Production Builder to do any custom changes or upgrades that are not offered
on this list.  Some Production Builders offer only color selections and upgrade flooring (hardwood or upgrade carpet and pad), but will not consider ANY other changes.

Why consider a Production Builder?  You may be able to build your "Dream Home" for considerably less than a custom home.     Production Builders often offer an extended 2-10 home warranty.

BUILDER DEPOSITS AND FINANCING

     You will need a Builder Deposit (which is applied as "earnest money" at closing) at the time of contract, and almost always will need to pay in full and in advance for any upgrades.  The builder deposit may be as little as $3,000, but the upgrades may run into the thousands.    Custom Builders require more in the initial deposit, often 10% of the purchase price for a pre-sale, and 5% for  inventory ("spec") homes.

     Production Builders sometimes offer special promotions, such as a builder contribution of $2,000-$3,000 toward closing costs, IF you use their preferred Lender.   Custom Builders do not pay closing costs.   In either case, you will be responsible for paying at least most of your closing costs and pre-paid items (such as prorated taxes and insurance).  Closing Costs and Prepaids combined average about 3.0% to 3.5% of the purchase price.

     Do you have your builder deposit and upgrade money readily available?   Are you prepared to pay cash for your new home, or have you been pre-qualified by a reputable lender?

    If you have a home to sell, there are several factors to consider.  Some Production Builders will consider a Contingency Contract (contingent upon the sale of your existing home).   IF the builder will accept a Contingency Contract, it may include a 24-48 hour "Kick Out" clause, and if the builder gets an acceptable offer with no contingency, you will be given a short time to remove your contingency.  If you are unable to remove your contingency, your contract will be terminated, and the home will be sold to someone else.

All information included here is believed to be reliable but is not warranted.

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