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How To Build Your Custom Dream Home

As Anne and Kevin Boyce’s children grew, the Falls Church couple recognized that their beloved home seemed to shrink and their hilly, nearly nonexistent yard didn’t offer space for outdoor play.

Like many local buyers, they wanted to stay in their neighborhood, where they have friends and participate in community activities throughout the year, but they couldn’t find a home to match their wish list.

“We were so lucky because a woman who owned a home on a nice half-acre lot around the corner from us wanted to move to Leesburg to be closer to her grandchildren,” Anne Boyce says. “We bought the house as a teardown and then were initially overwhelmed at the idea of designing a custom home.”

Building such a home requires a vision and patience as well as an experienced team of professionals who can provide buyers with advice throughout the process, which can take more than a year, depending on the condition of the lot and the architecture of the home. The design and permitting phase generally takes six months, and building can take 10 months to a year; the Boyces’ home took approximately 16 months to design and build.

Although custom homes often are among the more-expensive dwellings in the Washington region, they can be built to meet the budget needs of people seeking to spend a lot less than $1 million. Some smaller, simpler homes can be built to a buyer’s specification for as little as $400,000, depending on the cost of the lot and materials chosen.

“You can do a $5,000 Ikea kitchen in a custom home or spend $60,000 on just the cabinets,” says George Myers, who is president of GTM Architects in Bethesda and who built the Boyces’ home. “It’s important to be upfront about this from the start and show buyers a high, middle and low option so they decide where they want to spend their money.”

Myers says a 4,000-square-foot custom home, with a 1,500-square-foot finished basement, in the D.C. area is typically priced in the $800,000 to $1.2 million range.

“We draw up plans based on a wish list and come up with a price,” Myers says. “If it needs to be 15 percent less, then we start to look at which materials to swap out to reduce the cost.”

To minimize sticker shock, says Jonathan Lerner, chief executive of Meridian Homes in Bethesda, it’s best to have the builder involved during the design process to talk about what different choices will cost.
Start with the land

Some custom-home buyers already own a lot, but many rely on a builder or realty agent to help them find one.

“The choice of lot needs to take into consideration the neighborhood where you want to live, the size of the lot and the home you want to build, whether it has trees or a stream and whether it’s hilly or flat,” says Joshua Baker, founder and co-chairman of BOWA Builders in McLean. “We do a feasibility study to determine the ramifications of a particular lot for construction purposes and research any governmental and deed restrictions that could impact the project.”

Builders often have an easier time finding a lot because they hear about the ones that have yet to be put on the public market, Lerner says.

“We know about local regulations and we hire a civil engineer, so we know before we start building if there are site-specific issues or impact fees,” he says.

Sometimes zoning restrictions on the configuration of a site won’t allow for a three-car garage or a home with a large footprint.

John Joy, owner of Joy Custom Design Build in McLean, says he and his wife, Lisa Joy, a real estate agent with McEnearney Associates, find the lot for 90 percent of their customers. Home sellers and their agents often contact them directly when they anticipate that their home will be a teardown, one that’s more valuable for the land than the home.

“It’s much less costly to tear down a home and start from scratch rather than try to save part of the home,” Lisa Joy says.

While tearing down a home to start fresh is cost-effective for the buyers and, Lisa Joy says, fine with sellers who want the best price for their home, sometimes neighbors are less enthusiastic about teardowns. In neighborhoods across the area — including Bethesda and Chevy Chase in Maryland; Forest Hills, Wesley Heights and Massachusetts Avenue Heights in Washington; and Arlington, McLean and Falls Church in Virginia — neighbors have occasionally banded together to stop a builder from tearing down a home, but they rarely are able to prevent that from happening.

“Teardowns are so common in most neighborhoods inside the Beltway that we haven’t had very many complaints,” Lisa Joy says. “We put our phone number right on our signs so that neighbors can contact us directly with concerns or complaints, and we’re very responsive.”

Lisa Joy says that they talk to the neighbors personally and explain what will be built. Most people understand that today’s buyers want high ceilings, large windows and open floor plans, which are hard to get by simply remodeling, she says.

“The more people realize that a new, custom home in their neighborhood raises everyone’s property values, the more accepting they are of a teardown,” she says.

Financing the home…

John Joy says their custom homes cost an average of $3.5 million but can cost as much as $8 million. He says that about half of their customers pays cash, a fourth pays cash for the lot and finances the construction of the home, and the other fourth finances the entire purchase with a down payment of 20 to 25 percent.

“Few lenders offer construction loans because they aren’t sold to Fannie Mae or Freddie Mac,” says Michael Johnston, vice president and branch manager of Howard Bank in Timonium, Md. “The lender needs to understand the construction process and communicate with an appraiser about the value of the land and the future home.”

Johnston says a typical construction loan requires borrowers to pay interest only on the amount of the loan that covers the lot while the home is under construction. The lender lets builders draw on the loan at intervals to pay for the land preparation and building the home, with an inspection required after each draw to make sure the home is being built according to the specifications of the contract.

Qualifying for a construction loan usually requires a minimum credit score of at least 680, a down payment of at least 10 percent, and proof of income, assets and cash reserves to handle the costs of maintaining their current home while their new home is being built, Johnston says.

Most custom-home builders can recommend a local lender with experience in financing the construction of a home.

“The lender usually needs to see at least preliminary plans and the budget for a home in order to approve a loan,” Myers says.

The right team…

While a lender is an important part of your team if you need to finance your custom home, you also need an architect, a civil engineer, a landscape architect, and possibly even an arborist and an interior designer to partner with your builder, Baker says. He says the builder will typically manage that group for you.

Some design-build firms have in-house architects and designers, while other builders work with a variety of architects and designers. While most architects and builders will work on any style of home, it’s usually best to align your style preferences with the bulk of the work of your team. For example, if you prefer contemporary styles, choose an architect and builder with lots of experience designing those types of homes rather than someone who typically builds traditional ones.

“You need to check out the track record of an architect and a builder by asking around and doing some research on them,” Myers says.

Experts recommend reviewing a portfolio of a builder’s work and requesting a phone call with one or more recent buyers to find out about their experience. If a model or custom home is available, it’s also smart to tour the home in person.

“I asked friends who had built custom homes for recommendations and then took a lot of time looking at homes designed by the people I interviewed until I found someone I felt I could trust,” Anne Boyce, the custom-home owner of Falls Church, says. “We made a wish list of everything we might want in a home and then narrowed it down with our architect’s help. I showed them photos of homes that I like, and we worked with an interior designer who helped with all the decisions, too.”

Lerner says you can look online for local builders who do custom homes in the area you want to live. He recommends and, websites where custom builders often feature photos of their homes.

“We work with a handful of local architects who are experienced so we can help our customers find one who’s appropriate for their style and budget,” Lerner says.

Baker says that an important element of building a custom home is communication with your team.

“We have a weekly meeting with buyers during the design phase and then regular on-site meetings during the building phase to make sure they are getting exactly what they want,” ­Baker says.
Budget for design phase

“Most people come into the custom-home process with ideas and photos of what they like and some even have floor plans,” Lerner says. “It’s so much easier than it was 20 years ago when we had to interpret what our buyers wanted. Now people can quickly find an image of the staircase they love or the layout they want.”

Myers says that it can be more cost-effective to modify an existing floor plan, which can be fairly easy if you want something relatively simple such as a customized, center-hall, Colonial-style home.

“Most buyers want a particular style such as French country or contemporary or shingle-style for the outside and then about half of them work with an interior designer to pick the materials for the inside of the house,” Myers says. “Sometimes a builder will have a showroom, or you can look at other homes they’ve built to help make decisions. We show people photos of the most recent homes we’ve built and drive by them so they can see the different materials available and how they look.”

The owners requested a first floor master suite, which will allow them to live in the house as they age. Myers says the budget always has to be part of the process.

“One of the things that is so great about custom homes is that you can decide whether you want $100,000 worth of appliances or $20,000 worth,” Lerner says. “You can decide how much to spend on the level of finish inside and outside and whether you want to spend a lot or a little on your outdoor space.”

All homes today are built with higher levels of energy efficiency because of new building techniques and materials. But if you want to go a step further, you may want to meet with a builder who can design and construct a “net zero” home that will produce more energy than it uses.

After the home is designed to maximize efficiency, these homes are enhanced with a geothermal heating and cooling system, extra insulation, energy-efficient windows and appliances, and solar shingles.

No matter what your priority is, a custom home can be designed to match it, limited only by your imagination and your budget.

Tips on building a custom home…

●Get your financial plan in place first, otherwise you could run into limitations based on your budget.
●Look for a builder who works in the neighborhood where you want to live so they know about permitting and zoning issues.
●Finance your home with a lender who has construction-loan experience.
●Good communication between you and your builder is essential.
●Be prepared to spend a lot of time building a custom home and personally participating in a lot of decisions. The process typically takes a minimum of one year and often lasts 16 to 18 months.
●Involve a builder as well as an architect as early as possible to avoid designing a home that won’t work on your lot or will be too costly to complete.
●Make sure your design is appropriate for how long you plan to live in the home. If you anticipate staying forever, make sure the design is flexible to meet future needs.
●Once you’ve made a decision, try to move forward and not to rethink it. Change orders can be costly.