Monday, November 8, 2010

Residential Construction Contract

Construction Contract - Does Your Residential Construction Agreement Protect You?

A contract is nothing more than an agreement between two or more parties that is enforceable by law. Regardless of your age or your level of income, most adults have entered into hundreds and perhaps thousands of contracts in their lifetime. When you apply for your first library card, purchase a concert ticket, install a new software program, open a charge account, or place your signature on the paperwork that allows you to drive off the lot in a brand new car, you are signing your name and agreeing to abide by the terms and conditions of a legally binding document.
Since the purchase of a new home is typically the largest investment that most people will make, it would stand to reason that the number of legal documents associated with that purchase would also be of a substantial nature. Additionally, since a new home contract is first and foremost a legally binding agreement, it is very important that you retain a lawyer to review and modify the agreement so that it is complete, accurate, fair, and enforceable, for all parties.
Typical Content of a Home Building Contract
Names of all parties

Addresses of all parties

Phone, fax, email contacts and procedures

Date of contract

Property description

Street address

Subdivision

Homeowners association

Amount of contract

Terms of financing

Construction draw schedule

Construction draw procedure

Insurance requirements

Start date and definition

Substantial completion date and definition

Plans, drawings, blueprints, sketches

Specifications - as complete as possible

Substitution policy

Allowances - including labor and/or material

Change order procedures and pricing

Exclusions to the contract

Authorized delay conditions

Penalties or fines

Access to the construction site

Owner, lender, and third party inspection procedures

Methods to solve disputes

Arbitration clause

Settlement terms

Formal notification times and procedures

Warranties and service policies

Any documents required by state or local laws

Signatures and dates of all parties on every page of every document with original copies for all signing parties

Witness to all signatures

And anything else about which two or more people can disagree, misunderstand, fail to do, install improperly, overlook, ignore, or that otherwise might create a problem between any or all of the aforementioned parties.

WITNESSETH, the party of the first part hereafter known as owner, and the party of the second part, hereafter known as contractor that have here today placed their hands and seals on this document have hereby agreed to just be friends, get along nicely with each other at all times, expect only what is reasonable of each other, neither charge too much nor pay too little for services rendered, and build the perfect house on schedule and under budget.

OK, the last one is a little too much to ask under even the best of circumstances. However, the point we are hoping to make is that without a good set of documents, on which everyone has agreed, you can almost be assured of a bad experience. Do not sign any agreement with which you are not completely comfortable. If there is any part of a contract that does not make sense to you or with which you do not agree, you should clarify and/or change it so that it accurately reflects your understanding of the agreement. So, take the time to thoroughly read the entire contract, be sure youunderstand what you are reading, speak up and make changes and additions where you feel they are necessary, and above all, seek competent legal advice, before you build!

In the meantime, here are a few other construction contract links:
Maine Attorney General's Consumer Law Guide - look specifically at items #17 and #18 by using the links on the right side of the page.

Links to other online legal resources.

Links to legal books, forms, and contract documents.

Sample construction schedule for a large custom home.

Contract specifications and square foot costs.

Monday, October 25, 2010

Put www.FromYourDesign.com To Work For You !

If you have an idea for a dream home, email your sketch to CustomerSupport@FromYourDesign.com and we will draw it for you.

Check it out at http://www.FromYourDesign.com

Tuesday, October 19, 2010

Cut costs when you build or remodel your home

How much will your building or remodeling project cost? Maybe less than you think! Here's how to cut costs without compromising comfort and beauty.

1. Estimate Early

Before you get far in the planning process, start collecting estimates. These early estimates will be approximate, but they can help you make important building decisions. Once you know the likely costs, you can modify your plans to meet your budget.
Building Ideas: "Guesstimate" Your Building Costs

2. Beware Budget Building Lots

The cheapest building lot might not be the most affordable. Your costs will soar if your builders have to blast through rock, clear away trees, or provide extensive drainage. Also be sure to factor in the cost of installing public services. The most economical building lots are often in developments with access to electricity, gas, and public water lines.
Building Ideas: Find the Best Building Lot

3. Choose Simple Shapes

Triangles, trapezoids, and other complex shapes are difficult and expensive to build. To save costs, choose square or rectangular floor plans. Avoid cathedral ceilings and complicated roof-lines. Best yet? Forget the box and opt for an ultra-affordable dome home.
Building Ideas: Monolithic Dome Homes

4. Build Small

When you compare costs per square foot, a big house can seem like a bargain. After all, even the smallest house will need high-ticket items like plumbing and heating. But check the bottom line. In most cases, smaller houses are more affordable to build and more economical to maintain. Also, a house that is deeper than 32 feet may require specially-designed roof trusses, which will make your costs go through the roof.
Building Ideas: Find Plans for Small Houses

5. Build Tall

The most affordable houses are compact. Instead of building a single story house that sprawls across the lot, consider a house with two or three stories. The taller house will have the same amount of living space, but the roof and foundation will be smaller. Plumbing and ventilation are also less expensive in multi-story homes.

6. Don't Pay for Phantom Space

Before you choose a plan for your new home, you'll want to know how much space you're paying for. Find out how much of the total area represents actual living space, and how much represents "empty" spaces such as garages, attics, and wall insulation.
Building Ideas: How to Compare House Plans

7. Reconsider Your Cabinets

Solid wood cabinets are elegant, but there are less expensive ways to give kitchens, bathrooms, and home offices a sleek, designer look. Consider open shelving or stainless steel cabinets with frosted glass doors.
Building Ideas: How to Choose Kitchen Cabinets for Home Renovation

8. Use Recycled Materials

Recycled construction materials are earth-friendly and can also help take the bite out of building costs. Look for products like recycled steel, pressed straw paneling, and sawdust and cement composites. Also browse architectural salvage warehouses for doors, windows, lumber, light fixtures, plumbing fixtures, fireplace mantels, and assorted architectural details.
Building Ideas: Find Architectural Salvage

9. Postpone the Frills

While your budget is tight, opt for door hardware, faucets, and light fixtures from your local home improvement store. Items like these can be easily changed, and you can always upgrade later on.

10. Invest in Quality

While you can postpone frills like fancy doorknobs, it doesn't pay to scrimp when it comes to features that can't be easily changed. Forget the tacky vinyl siding. Invest your homebuilding dollars in construction materials that will bear the test of time.
Building Ideas: Exterior Siding Options

Wednesday, October 13, 2010

You Don't Have To Know Construction To Design

Many people have the mistaken idea that you have to know all about construction to design a home. Not True. Much of the detail about how the house will be constructed will be left to FromYourDesign.com's Design Experts and your contractor. You don't really need to memorize all the specifications about structure or code.

At the same time, it's important to realize that limitations do exist. If your design calls for a 50 foot wide opening in the middle of a living room with no supports, doing so may be very expensive.

Another consideration is the kind of construction you want, along with the advantages and disadvantages of each. Framed homes are the most popular in the United States. They are affordable to build and allow for adequate insulation. Block construction has also been popular for its low cost and durability. However, until recent innovations in insulation, block homes lacked efficient thermal properties.

Costs
There is another matter to consider concerning the structure and materials: costs. Many people, including contractors, try to skimp and save by using the cheapest materials. This is rarely a good idea. More often than not, the effort to save money will end up costing more in the long run.

This consideration can become even more important m the long run. A good example is the kind and quality of roofing materials. Try to save money on the roof, and the $500 you save now could quite easily cost you $3000 in five years.

There are times to save, and times to get the best available. When it comes to structural soundness, never skimp. Fortunately, building codes exist to help you and protect you here. At least they will in the major sense; the house won't fall down around your ears, anyway. But those codes won't protect you from having to pay thousands of dollars in maintenance over the long run.

Monday, October 11, 2010

Can Architecture Help Prevent Obesity? | News | Architectural Record

Can Architecture Help Prevent Obesity?

To combat obesity and related illnesses, New York City rolled out a first-of-its-kind guide this year to help designers create buildings and public spaces that encourage exercise.

Called “Active Design Guidelines: Promoting Physical Activity and Health in Design,” the 135-page document details how to get people walking more by encouraging the use of stairs or by adding parks outside buildings.

Though the guidelines are only advisory, they could still “really help us become healthier, to make sure that are cities are more livable, beautiful and sustainable,” said New York-based architect George Miller, president of the American Institute of Architects (AIA).

The result of a two-year collaboration between seven city agencies, in addition to the AIA, the guidelines were officially released on January 27. The book is $35 for a hard copy or free online.

Thursday, October 7, 2010

This Months Amateur Architect's Book Club Go-Tos

This Months Amateur Architect's BOOK CLUB is reading:

"How to Plan, Contract and Build Your Own Home"
"The Farmhouse: New Inspiration for the Classic American Home"
"New Rooms for Old Houses: Beautiful Additions for the Traditional Home"
"Creating a New Old House: Yesterday's Character for Today's Home"

Some are available for download at Amazon.com.

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Twitter: @FromYourDesign

Tuesday, October 5, 2010

Build Your Own House Series - Financing

As you know, Loans for Owner Builder Construction have become difficult to find.

In answer to many of your questions as to where to find Owner Builder Construction Loans, the companies below still have them available (as of this post date).

"The information posted below is from the lenders' web sites and may change without notice, as well as the availability of their loans. So, check their web sites and/or call them, Carl."

NORMANDY CORPORATION
SELF BUILD CONSTRUCTION LOAN

This program is designed for Borrowers who are acting as their own general contractor to construct a residential property. Upon completion, the loan may be converted at no cost to a permanent loan with Normandy.
The Normandy Advantage:
• Borrower acts as own General Contractor (No site supervisor required)
• Loan amounts from $75,000 to $2,000,000
• Loan amounts of up to 90% of the appraised value on single family, owner occupied, full income documentation, conforming loan amounts. Otherwise, up to 85% loan to value (up to 80% of appraised value on 2 to 4 family owner occupied and non-owner occupied homes)
• Land purchase may be included in the loan, up to 75% of the lot purchase price
• 12 month construction term (up to 18 months on an exception basis)
• Rates start at 7.95% during construction (requires “One Close” Construction/Permanent Loan with Normandy)
• Fast pre-qualification, typically within 3 to 5 business days
• Deal directly with the Loan Officer/Underwriter
• Flexible draw schedules
• Interest only payments with flexible payment options
• Loan programs available to Borrowers with less than perfect credit
Loans available currently in the following states: AK, AL, CA, CO, CT, DE, FL, GA, HI, ID, IL, IN, IA, KS, KY, MA, MD, ME, MI, MT, NH, NJ, NY, OH, OK, PA, RI, SC, TN, UT, VA, WA, WY
Check their web site to verify!
Normandy deals directly with you the Owner Builder.
Normandy
46 Prince Street
Rochester, New York 14607
Toll Free (800) 390-7536Phone (585) 256-2600Fax (585) 256-2836
Email: info@normandy.com

Bismark Mortgage is a private Portfolio Lender that allows you to be the General Contractor. They work only through licensed Mortgage Brokers in the states indicated on their FAQ page. Have your Mortgage Broker contact Bismark at: loans@bismarkmortgage.com or 425-283-5000.

Owner Builder Loan Services offers short-term construction loans for conventional framed homes, log homes, timber frame homes, kit homes, modular* homes and dome homes. You can build a home for your own use or you can build a rental property. You can hire a contractor or you can act as your own contractor. (* Some restrictions may apply.)(800) 543-5600 or E-mail: loan@ownerbuilderloan.com

If you find other lenders, let me know and I’ll spread the word.

Understanding Construction Loans

f you are planning on building a house, you are going to need to obtain a construction loan first. Construction loans work differently than a traditional mortgage. Here are the basics of the construction loan and how they work.

Periodic Withdrawals

One of the biggest differences between a mortgage and a construction loan is in the way that you are going to receive your money from the lender. With a traditional mortgage, the lender can give you the entire amount of the money upfront to purchase a property. They can do this because if you do not make your payments, they can simply take back the house and sell it. With a construction loan, this is not the case. Whenever you are building a house, there is not much for the lender to foreclose on if you start making your payments. Because of this, the lender is going to make periodic payments to you for the entire amount of the loan.

Typically, with a construction loan, you can expect to get four different payments for the balance of the loan. You will start out with 25 percent of the loan amount so that you can get started with construction. After you have completed 25 percent of the construction of the property, you can get another 25 percent. In order to determine how much of the project has been completed, you will typically have to work with a real estate appraiser so that they can verify how much was done. In this way, the lender can protect themselves and prevent people from taking the money and running.

Interest-Only Payments

With this type of loan, it is very common for the lender to require interest-only payments by the borrower. This means that you are only going to be paying the amount of interest that is accruing on the loan while you are in the construction phase. In addition to this, you do not have to pay interest on the entire amount of the loan. You are only going to pay interest on the amount that has been disbursed by the lender. This means that at the beginning of the loan, you are only going to be paying interest on the first 25 percent of the money. Your payment is going to continually increase as you get further along in the building process.

Completing Construction

At the end of the construction phase, the loan is going to be altered again. The lender is going to require full payment on the original construction loan. This means that you will most likely need to get a traditional mortgage to pay off the construction loan. In most cases, it is going to be in your best interests to secure the mortgage before you even start building. This way, you know that you will be able to qualify for the loan before you get involved with the construction of a house.