What you need to know before building a custom home in Williamsburg VA

I have worked with many home buyers who want to build new homes over the years. My role is essentially a building consultant working towards picking a lot/ designing a home and then building it. It can be as easy or as complex as you want. Some of the homes were simply modified designs of existing homes. Others were designed from inspiration drawn from online plan websites like William Poole or Frank Betz

The process of building a custom home is often the most misunderstood segment of housing hunting. Said differently, a high percentage of prospective home buyers start out thinking they may want to build a custom home but then end up buying an already built “spec” home or working directly with a builder to modify a home that is in the process of being built.

The reason for the confusion is that most would-be “custom home buyers” have the basic sequencing wrong. They think that they will be able to find and buy a perfect lot, then hire an architect to design their dream home, then take the architect’s plans to a handful of builders who will eagerly bid out the project, then pick the builder with the lowest bid. The reality is that the order is usually reversed. That is, a home buyer ends up choosing a builder, and then together they identify the lot and build the house. The process is usually faster, smoother, and less expensive for the buyer.

Costs for building can vary widely depending on factors like lot conditions, shape and style of home, level of finish, energy efficiency options, etc. So, there really is no generic pricing based on cost per foot.

Having said that, here are some general guidelines that are helpful for considering the question of cost in a very ballpark manner:

Cost per square foot
Generally, when we speak of cost per square foot, we are talking about finished square footage. However, it is important to consider that unfinished square footage is not free.

Factors to Keep in Mind
Average price per square foot described here will allow for a typical house that might include a porch, garage, and some sort of outdoor living area like a deck or patio. If we use more custom finishes like natural stone flooring and siding, synthetic decking, pavers, larger garages, lots of outdoor living space, screened in porches, basements, etc. additional costs will apply. And, obviously if the unfinished footage is large compared to finished footage, this causes the overall cost per finished foot to be higher. Single story homes can be $15-20 more than an efficient two story. And, smaller houses will tend to cost more per foot than larger homes. So, there are a lot of factors that make that a complex issue to address.

There are also lot site-specific costs like permit fees, clearing, driveways, etc.. that can make prices vary by many tens of thousands from one lot to the next with no change in actual footage.

We don’t typically do a lot of homes that would be defined as “starter homes” which have very basic levels of finish in them. So, I will speak mostly to more custom situations like we normally encounter.

Rule of Thumb
Generally, turnkey costs will start at around the low $185 a square foot. If you look at the average house in our gallery you will see a pretty high-end level of finish.

Are Custom Builds Right for You?
It is worth saying that there is an entry point for a custom built, scattered site home. While it can vary, it is unusual to see houses that are under the 400k mark. (not including lot) By the time you consider the site costs, the unfinished spaces, and the basic features you see inside an average home, it tends to be hard to produce anything of a custom level for much lower than that.

For customers whose price point is below that level, they may find they can be served better by a builder who has a production style business model and builds the same houses over and over again in controlled conditions and with designs, finishes, etc… that are very focused on value rather than aesthetics.

Shape/style of house
While the above price information is meant to be helpful, many factors can skew the price significantly. One of those is certainly the efficiency of shape of the plan.

Multi-Story Homes
A two-story house will save approximately 10% compared with a ranch that has the exact same square footage. This is because large structural elements such as the footing, foundation, framing, roof, insulation, etc. can be used to cover twice the square footage without increasing their costs.

Similar economies can be found with the use of basements and finished attic spaces. These areas are often constructed unfinished and then finished later. This allows us to meet your budget now but allow you to have more space later without moving to a new house or performing expensive additions. While not exactly true, you can sort of figure half the cost of finished space when considering unfinished space that has a roof over it.

Overall Size
The overall size of the house will also affect the cost per foot. The larger a home, the lower the cost per square foot. This is because some “fixed” costs such as water source, sewer, driveway, garage, clearing, etc. will generally be the same or close to the same but if those costs are averaged into a larger house, the overall cost is lower.

Designing with Us
You can come to us with a ready-to-build set of plans if you have one. Or, if you prefer, we can put you together with our in-house draftsman and custom draw a set of plans to meet your requirements. If you can dream it, we can design and build it.

Typically we do not end up using the stock plans from plan-based web sites, but they are a great place to find ideas.

Send us an idea of what you are looking for and we will search our plan archives to see if we have one that might fit your needs. We can put together a design process that suites virtually any specific situation.

Another disadvantage to a buyer is what we affectionately call “lack of vision.” Frankly, it’s difficult for a typical buyer to look at a lot and see the potential. For example, most buyers look for a lot that is perfectly flat. Some of the best lots, in our opinion, have a gentle slope up to the house front and then a gentle slope toward the back lot line, and from one side to the other. That lot tends to be better for drainage, allows for the entrance for the house to be at (or slightly above) street level, and may even allow for walkouts on main and lower levels. Some lots that appear to have topography issues (for instance, too sloped) may in fact be great lots. Builders can also do wonders with regrading and retaining walls. As an FYI there are lots currently for sale in both James City County and New Kent County. Click here to search

Cost & Financing
Every Virginia homeowner will need a permanent mortgage unless they are prepared to pay cash for their home. We do not offer in-house financing, but we have relationships with several Williamsburg area lenders who can help you with this part of the process.

The main question customers seem to want to be answered is “How much is my home going to cost?” lp you understand potential costs. However, to really give you specific information that pertains to your situation, preferences, etc… we will need to meet with you and collect some additional information.

As you probably expect, there are a few different ways to finance the construction of your new home. We can connect you with our construction lender who can give you additional guidance and a more thorough explanation of your options.

When you are building a new home you want to look for custom home construction loans. This gives you up to 12 months of construction financing, and when the home is complete you can convert the loan into a permanent mortgage.

You also want to understand the down payment requirements for your custom home. When purchasing land most common practice is to purchase the lot with cash and then expect to put down about 20% of the total amount required. The lot can be part of the down payment though

When financing a custom home you also want to understand how payments get authorized during construction. Construction loans are never paid out in a lump sum. As steps in the construction process are completed your builder will request “draws” from the lender to pay for these expenses. Banks need to approve these draws, a process typically done by sending out a bank authorized representative to review and approve the work.

Building lots for sale-James City, New Kent County