New Home financing; Finding Land and Their Order of Importance
Getting pre-approved is one of the most important components of building your home because it's the starting point. I've spoken to so many people who have the greatest of ideas and the biggest of dreams, but without knowing how much you can spend... well, you know where I'm going with that. It's very easy to spend loads of money buying plans, looking for lots and even buying or putting money down on lots only to find out that your approval amount is low or maybe worse.
So number one: Get pre-approved so you know what you can spend, then you can decide what you want to spend. When getting that pre-approval, some financial institutions will need a loan dollar amount to start the process. You can find an approximate number by looking at homes comparable to what you want to build. Many builders have homes on the market with flyers readily available. Another easy way is to go on zillow.com or realtor.com. The important thing to remember when doing so is to look for the price per square foot (sale price divided by square foot) of many homes to get a good average. This may not be the number you want to spend or the number that accurately represents what your cost will be. The goal is to find a worst case scenario number, for the type of home you want, to take to the bank for your pre-approval.
Step 2: Finding Land
If you already have it then great, you're ahead of the game! Finding land is number two on the list and it is not an easy task, especially in the DFW metroplex. The silver lining is, there is always something new on the market. The reason it's done before finding a plan is because it's important to know how wide and how deep your house can be, and your lot will determine that. It's always fun to look at plans, and appeal to your creative side, but once you're done, then you'll have to hit the spotty land market and turn down all of your opportunities just to unsuccessfully find the land that fits your house. So in short, "find a house that fits the lot" not "find a lot that fits the house". In addition, you want to "build a house where you want to live", not "live where you built the house".
When it comes to the search, you may need the assistance of your builder because there are a lot of things that can really drive the construction cost beyond the point of feasibility if not totally kill your project. However, this may incur some fees, and it will be well worth it! Generally you won't find the best one on the first try. but consulting your builder will help you understand what to look for and what to avoid. Once you get that information and find a good prospect, then you can meet your builder there for further confirmation and move on to customizing your plan.