Being a first-time home buyer in today’s market is daunting in and of itself. Today’s buying power is noticeably less than 2 years or even a year ago. Supply of homes has dwindled to record lows and buyer demand seems to be ever so persistent no matter the area you are buying, no different when buying a home in North Port, FL. So, what does one do when they are ready to buy their first home, but are constantly getting outbid and driven out of the market? Consider building your first home!
With a family that has owned a new construction general contracting business, I have had the privilege of seeing behind the curtain of how the building process works from start to finish. My Mom and Uncle Co-Own WestShore Homes and primarily build new homes for customers that range from spec homes (homes built on speculation of sale) for investors, new families, first time builders, and more. Their client list also happens to include my wife and myself. We are building our first home in North Port this year. We bought our lot, created a floor plan and design Spring of 2022, so we are taking this adventure for the very first time ourselves. I think what we have learned, even thus far, can be very helpful to those who are considering building their first home themselves in the North Port area.
There is an array of different options to consider when selecting a builder that will work best for your situation. Things to consider that I will outline in this blog post are starting with a budget and lending requirements needed to begin the process, selecting a location of the lot you want to build on, creating and choosing a floorplan and design, choosing a builder and navigating the building process from start to finish. As deep and nuanced as the process can be, this post will cannot cover every single step in great detail, but rather a higher overview of the process. In the future, we will dive deeper into each step, so stay tuned!
Budget and Lending Requirements. This is the obvious step that is often overlooked until after the next step when a buyer falls in love with a floorplan or design when walking through a model home in the area just to be let down when they realize ultimately it won’t work. In today’s market of resale homes, new construction can be a more affordable option for many and a lot less competitive. When considering a budget, I always recommend considering a monthly payment including principal, interest, insurance, and taxes compared to your monthly income. For me, I am comfortable with 25% of our take home pay allocated to my mortgage with 10-20% as a down payment. The options available for new construction loans that I recommend all fall under the umbrella of one-time closing construction to permanent loans that automatically convert into the permanent loan once the building process is complete. These types of loans only have one set of closing costs vs. 2 separate closings. These types of loans only require the borrower to make interest only payments during the construction process. These loans typically allow as low as a 5% down payment and can convert to a fixed or variable rate over 15 to 30 years. It is important to consider that the builder you choose may have a selection of lenders they prefer and work with. My top recommendation is Drummond Community Bank.
Selecting a Lot Location. Depending on the location you want to build it is important to consider the local permitting process and fees. Hiring a Realtor to help you navigate what area will work best for your needs is a must! Once you are clear on a location and begin searching for a parcel, be on the look out for easements on the lot that could impede it’s buildability. When building in SWFL there are many potential obstacles that could impact costs and conservation efforts. Gopher tortoises and Scrub Jays are protected and you will want to verify the lot is not affected by those protected areas. If they are there will be additional costs when submitting your building application to have them relocated or to further conservation efforts. Also, trees need to be marked on your topographic survey to mark each tree that is protected and calculate costs for clearing the lot for your home. To see more on North Port’s development regulations visit their page here City of North Port.
Floorplan and Design. In my opinion, this is where the fun starts. For us, we choose to customize our floorplan with help from our builder and engineer. Things to consider when picking your floorplan are of course your budget. Cost can be simply applied to a livable sq/ft basis. Once you have a size range you can afford, other things to consider in your floor plan are the layout and your lot size. You will want to make sure the floorplan will be functional for you and your needs while allowing for you to have room to grow into one day. For us, we designed a 3-bedroom, 2-bathroom, 3 car side load garage with the front of the home facing the street on one corner and the driveway pull from the other street side around the corner. Clearly this type of floorplan wouldn’t be effective on an interior lot that isn’t on a corner. If your lot is skinnier and deeper this will open your options to many of the floorplans that accommodate those type of lots. Once you have the layout just right you can consider your design of the home. How do you want it to look, feel, flow? Do you want a kitchen island overlooking the living room, or less open home? Do you prefer a kitchen nook or dining room? Do you prefer starting with higher end finishes or does it make more sense to upgrade those later? These are all important considerations when moving to the next step and selecting a builder that can accommodate your needs. Consider this online floorplan search function. Floor Plan Search
Choosing a builder and the building process. Once you have your budget, pre-approval for the construction loan, a good sense of the lot, location, floorplan, and design you are looking for, it is time to start your research on a builder to work with. Make sure they do build in the exact area you are looking in, have a great team of customer support agents, great past client reviews, and can accomplish your goals! Some larger builders will not have much flexibility in their designs, while others give you complete autonomy in the process and design. I think somewhere in the middle is best in many cases, they can help guide you to the most cost-effective approach while still creating a beautiful plan. The downside of building, is the length of the process as compared to purchasing a pre-built home. In today’s market you can expect a 18-24 month build time from start to finish, so make sure you have living arrangements down for that time as it can vary from builder to builder. Consider a lease renewal on a rental if you are renting or a month-to-month option as the home gets closer to being completed to allow for flexibility. If you have a house to sell before moving in make sure you consult with a local Realtor on the time expected from listing to closing.
Building your first home can be a very stressful endeavor, but it the end I am sure it will be a rewarding and great learning process. Remember to try to enjoy the process! As always, if you need help navigating the new construction market or need real estate guidance, please reach out to schedule a consultation.
