How To Build Your Dream Home: Everything You Need To Know

You’ve fantasized for years about how you could build your dream home. 

You’ve subscribed to House&Home Magazine, created a Pinterest board of inspirational photos, use Houzz every chance you get, and find yourself driving through new developments daydreaming about which custom homes you love the best.

Make 2022 the year you stop dreaming and start building. 

We’ve put together a guide of everything you need to know to make your property dreams come true in 2022. 

What to Consider Before You Build Your Dream Home

One way to make your dream home a reality is to work with an experienced real estate agency. Real estate agents are experts at navigating your local property market. They can help streamline the process of finding an existing property you can make your own. 

Another is to design and build a home from scratch with the help of a custom builder.

Both approaches have benefits and drawbacks you should consider before settling on one. 

Should You Buy or Build Your Dream Home?

When you buy a pre-existing home the purchase tends to be faster. You can then put your extra time, energy, and focus into renovating it. 

With an inspection and with the expert guidance of your real estate agent, you’ll have a better idea of what to expect when it comes to the area, the reputation of the original builder, environmental concerns (for example, is the area prone to flooding?), and the like.

The role of the home inspections 

Home inspections are a necessary investment when purchasing a pre-built home. 

The cost of having a professional look over your home before the deal is finalized could save you tens of thousands of dollars down the road in unforeseen renovation expenses. 

The limitations of a home inspection

Inspections can’t discover every building concern, however. 

There is always the possibility that once you start tearing down walls and pulling up floorboards you’ll find you bought more than you bargained for, like mold and asbestos. 

The limitations of buying an existing home

Even if the home inspection goes swimmingly and there aren’t any surprises when you start renovating, there will be limits to what you can change. 

A huge downside of buying a pre-made home is that you won’t be able to customize whatever you want. A two-story home will always be a two-story home unless you can and want to dish out the heavy amount of money it will take to add or take away a floor. 

The benefits of building new

When choosing to work with a builder, buyers have a say in every detail of their new home including:

• Location and lot,
• Overall square footage,
• Layout, 
• Room size, 
• Ceiling height,
• Lighting and electrical,
• Audio visual and security system pre-wiring,
• Materials,
• Interior design, 
• Landscaping, and 
• Budget allocation. 

The ability to choose isn’t all positive, however. It comes with having to be more hands-on throughout the building process. Having said that, with the proper preparation, the rewards of going custom can be well-worth the extra effort. 

Steps to Building Your Dream Home

A custom home build can seem daunting. 

By breaking down the building process into simpler, more manageable, and more actionable steps, we’ve taken the guesswork out of where to start, outlined which steps to take and when, and given you a list of things to consider along the way.

Here are 9 steps to take when building your dream home. 

1. Create a budget

Before you start picking out tile and carpet samples for your fantasy abode, it’s important to know how much money you have to spend to build it. 

The cost of a custom home varies widely depending on:

• Location (province, city, proximity to the city centre, rural vs urban, etc.),
• Grade and other characteristics of the plot of land,
• Ease of access,
• Size,
• Materials, and
• Customization

It’s best to figure out your budget before you go looking for a plot of land or contact a builder. 

How to know what you can afford

The best way to determine what you can afford is to crunch the numbers yourself using an online mortgage calculator and by contacting a loan or mortgage specialist.

You’ll need to know details like:

• The balance on your mortgage,
• The amount of home equity you have (if you currently own a property valued at more than you owe on it),
• How much savings you have,
• How much consumer debt you have,
• Any loans or lines of credit secured by your mortgage, and
• Current interest rates (variable and fixed).

2.  Get a loan

When it comes to loan and mortgage specialists, you’ll need to contact one about getting a special type of loan to finance your dream home. 

Why? 

When you buy a pre-existing property, the banks and lenders have something to work with in terms of collateral. They’ll happily let you finance it with a conventional mortgage as long as you meet approval criteria.

When a residence doesn’t already exist, a traditional mortgage won’t cut it. 

Lenders instead need to ensure you can cover the cost of a larger loan should something with the land purchase or home build fall through. 

Types of land and construction loans

There are two main types of construction loans:

1. A loan that can be converted into a conventional mortgage once the property is built and re-assessed,
2. A loan that must be paid back as soon as the property is complete and the buyer takes possession. 

Option 1 is the more popular, and often more affordable, choice for the average home buyer. 

A 2-step loan process

Keep in mind when applying for a home build loan, the lender will want to see copies of the architectural plans. 

It’s a chicken-and-egg situation; you need pre-approval of a loan to let the builder know what you can afford and you need a construction blueprint to show the lender so they know what they’re financing. 

Consider this step really 2 steps: 

1. One where you get a loan for the land, and 
2. One another where you get a loan for the construction. 

Depending on your financial situation these two steps can go together. Your lender and your real estate agent can help you navigate the in’s and out’s of securing financing for your dream property. 

3. Buy land

Once you’ve secured your loan, it’s time to start looking for a place to build your dream home.

An experienced real estate agent can help you locate the perfect spot for your new build. Throughout the purchasing process, an agent will ensure the parcel of land meets the following conditions:

• it is zoned for residential construction, 
• is safe to build on (by helping to arrange environmental testing such as soil and water), and,
• has no liens attached to it.

A real estate professional will also connect you with an attorney to ensure the land purchase goes smoothly.  

Where permits are concerned, that’s the responsibility of the home builder, which brings up to our next step. 

4.  Find a builder

What is the best way to decide on a builder? 

We highly recommend booking consultations with several highly regarded custom home builders before you settle on one.

Any reputable contractor will be more than happy to meet with you before signing an agreement. In fact, they’ll insist on it.

How a custom home consultation is like a job interview

Like a job interview, both parties can use a consultation to establish whether it’s the right fit. 

A reputable home builder will want to know you’re financially ready to undergo a custom build just as much as you’ll want to decide whether or not you want to work with them. 

When choosing a home builder, ask them the following questions:

• Can they offer references from previous clients?
• Are they able to arrange tours of previous custom homes they’ve built?
• Does the builder work closely with equally-reputable professionals such as an architect, a landscape architect, and an interior designer?
• Are they familiar zoning requirements, local building codes, and building permits? Do they cover acquiring permits (they should)?
• What is their overage clause? In other words, what do they offer as a guarantee for the estimate? 

An experienced builder will offer an overage clause between 5-10% to cover unforeseen costs. Meaning, worse case scenario, you’ll pay no more than 5-10% of the originally quoted price for your custom home.

5. Design your new home

Congratulations! You’ve chosen a home builder you trust. It’s time to start designing your fantasy pad. 

While the builder consultation is free, the design phase is not. They are a necessary step in the building process and one that can’t be avoided.

The cost of the design phase

The creation of architectural plans will cost approximately 5% of the final price of the home. If your budget is $900,000, for example, expect the blueprints to run you $45,000. 

If we continue with the job interview metaphor, the blueprints are like the probationary period for a new employee; you invest in hiring them but you can still go another direction if it ultimately isn’t a good fit.

For instance, you can pay the 5% to have plans drafted and then choose not to go ahead with the build. You haven’t lost anything and can use the plans at a later date or, hypothetically, with another builder.

What to consider when designing your dream home

The biggest tip when designing your custom home is this: be realistic. 

Ask yourself:

• Do you have caviar taste on a pasta primavera budget? If so, which choices can you cut or change to still get what you need without feeling like you’re sacrificing your vision? 

• What things should you build now and which can wait and be added on in the future? Perhaps you rough in a bathroom in the basement that you outfit later. 

Then, consider the following 4 areas to streamline the design process. 

1. Create a floor plan

Consider the flow you’d like in your new home, then ask yourself the following questions: 

• How many square feet would you like?
• How many floors would you like it to have?
• How many bedrooms would you like to have? How many bathrooms? Will these be full or half-baths? Where and on which floors? 
• Would you like a walk-out basement, or a finished basement where you can have, potentially, a live-in suite?
• Do you have an special requests when it comes to rooms, e.g., a fitness studio, bar area, second kitchen, sunroom, etc?
• What about outdoor areas, decks, and patio spaces? 

Once you have an overall feel of the floor plan, then you can start assigning rooms. 

2. Assign room usage

When figuring out how many rooms your new pad should have, look to where you’re currently living for inspiration.

• Do you currently have rooms or space in your existing home that you don’t use? Why, then, would you want to build bigger? 

• How can you combine ideas to cut down costs? For example, if you want a movie room and a family room but only have space for one, can you combine them?

• What are the headaches with your current room layout that you’d like to fix in the new home? Is your laundry room off the main bedroom or combined with the mudroom, dog cleaning area, and bike storage space?

3. Pay attention to the details

In an age of the internet, inspiration for home design abounds. 

The sheer amount of choice can be overwhelming and confusing, and can slow down the design process. 

Here’s how to stay on track in the design phase:

• Keep referring to your budget
• Create a list of priorities, must-haves, like-to-haves, and non-negotiables
• Be honest about what you really want and need
• Keep a Pinterest board of design inspiration

Your builder and design team are excellent resources. It’s their job to help you stay on budget and schedule. They will work with you to avoid excessive costs, incorporate your lifestyle needs, and stay realistic and practical about what can and can’t be done with your custom home build. 

4. Focus on your lifestyle

Concrete stairs may look slick but aren’t ideal with little ones in the house. Light-coloured carpeting is divine but not if you’re always cleaning it post-muddy dog walk. A large outdoor patio space may seem necessary but not if you’re away most weekends in the summer.

Consider your lifestyle when designing your new home. What looks good on Houzz may not be practical for how you and your family live day-to-day.

6. Build your dream home

Finally! It’s time to break ground on your dream home.

Your builder will take the lead here as the general contractor, program manager, and liaison between you, the client, and the tradespeople. This doesn’t mean you should sit back and show up on site only when your house is finished.

Be hands-on when you build your dream home

Mistakes can be made in the building process. It’s crucial that, as the home buyer, you stay present throughout the build.

Request on-site tours at various stages of construction:

• Before the foundation is poured
• Once the basement walls are erected; same goes for subsequent floors
• As electrical, audio, and other are added
• As the windows and doors go in
• Once the wall colours are painted and floors are installed

The idea with staying on top of construction is you’ll be able to pick out mistakes before they become unchangeable things you’ll have to live with, or costly fixes. You’ll also be able to change your mind before, say, a room size is set in stone.

7. Stay flexible

When you build a new home, there are bound to be delays, unforeseen issues, and hiccups. 

Bad weather, permit, supplies, and inspection delays, material cost increases, and subcontractor setbacks can make the process longer than expected. 

Be ready to compromise

Especially where materials are concerned, be ready to compromise

If your dream backsplash tile ends up backordered for 8 months, find another option. If you have to live with family until your new home is ready, get comfortable with the thought of sleeping on a Murphy bed.  

The upsides to building your own dream home far outweighs the costs. You’ll learn a huge amount from the entire design process and you’ll have a distinctive home that represents you and serves your family. 

8. Inspection Day

Congratulations—the build of your dream home is done!

It’s almost time to move in. Before you step aside to let the movers unpack your things, there are a few more things you should be prepared to do. 

We’ll begin with the inspection.

Possession day inspection

On possession day, your builder will do a walk-through with you of your new home. 

The purpose of the walk-through is to give them both of you the opportunity to ensure a proper clean-up has been done and to find any last fixes required by the builder. 

What to look for on inspection day

When you do the inspection, pay special attention to the following:

On the outside …

• Roofs, especially around chimneys and along roof seems
• Siding or other exterior wall finishes
• Eavestroughs and downspouts 
• Windows and doors, especially to ensure they’re sealed correctly 
• Driveways, walkways, and garden 
• Landscaping

On the inside …

• Overall temperature and airflow
• Wall finishes especially looking for cuffs that will require a touchup
• Floor install and transitions from room-to-room, around kitchen appliances, and in tight spaces
• Door, crown, kitchen, and other moldings for poorly finished seams
• Countertops for proper seam caulking and finishing
• Lighting fixtures, including pot lights, for proper install
• Hardware, including cabinet handles and bathroom towel rods, for secure install
• Caulking around sinks, showers, and bathtubs
• Electric heat registries and air intakes for proper install and finishing
• Electrical outlets and light switches
• Window coverings (if applicable) for correct installation

9. Move in after you build your dream home!

Welcome to your brand new dream home!

You’ve put in the hard work, money, time, and due diligence, it’s time to enjoy the end result. Once the inspection is done, the last fixes have been made and the final cleaning has been done, collect your keys and make way for the movers.

We recommend you pour yourself a drink, put up your feet, and take it all—you’ve made your home dreams come true! 

Build Your Dream Home: Next Steps To Making It a Reality

Whether you’re looking to purchase land, find a property to renovate, or build your dream home from scratch, Century 21 Poirier can help.

With decades of real estate experience, the team at Century 21 Poirier will guide you through the home sale and purchase process, assist you in finding answers to questions you didn’t think to ask, and decipher the local real estate market for you. 

Contact us if you have any questions about what you’ve read—or if you’re ready to start building your dream home. We’ll sell your current property and support you in the purchase of your next one.

Visit our resources page for more information on current real estate trends in Northeastern Alberta.