People building a custom home, whether acting as an owner builder or hiring a licensed general contractor, often have to be reminded of one simple, vital point: look at the big picture.
Owner builders, especially, have a chance to save tens of thousands of dollars being their own general contractor and managing the construction project themselves. In fact, avoiding the builder's markup is the true secret to saving. Owner builders who try to do everything by themselves or save a few pennies on every aspect of the project will end up losing more time and money overall. And, there will be a greater potential for a failed project.
Instead, everyone building a home should step back and focus on the big picture.
Focusing on the big picture means an owner builder should not try to nickel and dime every aspect of the project. You should definitely not skimp on the quality of the project, and you should not sacrifice the quality of the professionals you hire in an effort to save a few bucks.
This means both sub-contractors and loan professionals - these are the two sets of people who will help insure your success.
For owner builder construction, the big picture does not involve trying to find the cheapest sub-contractor, just for the sake of price - it means finding the best value, which is the right combination of price and quality labor. You will pay dearly for the mistakes made by lower quality sub-contractors. Owner builders, especially, need to locate and hire the right sub-contractors for the job. You will be glad you did when your home is built with quality material and quality labor.
The same principle is true for who you choose to work with for financing, whether you need an owner builder construction loan or just a standard construction loan for a custom home. For example, if you are an owner builder, do not try to save a few pennies by working with someone who does not have expertise specifically in owner builder loan financing.
If your brother in law, the mortgage broker, does not close dozens of these exact kinds of loans each year, go elsewhere. You will spend more in the long run - in both time and in real dollars lost to ineptness and incompetence.
Not all loan programs
are created equal, and not all loan officers are either. Remember the big picture and be sure to work only with people who understand your unique construction program needs, especially if you are going to be an owner builder to manage your own construction process.
In fact, in this case, you may want to ask your loan officer if he or she has built his or her own home before. This will be a sure sign of someone who understands your needs throughout the project.
Owner builders who lose sight of the big picture, because they get caught up in the small details of trying to pinch pennies, are the ones who end up using cheap materials, low quality labor, and low quality financing. Unfortunately, when this happens, it is the owner builder who suffers and loses both time and money.
