Building a custom home can be extremely satisfying, but only if you go into the process knowing what to expect and what to avoid. We recently caught up with construction executive Jonathan Hillert to get a few tips for people thinking about putting up a custom home:
1. Make sure you have enough cash. Some property owners think that if they own a fully paid off property, it will help them get a loan. That is often untrue. Banks maintain liquidity and reserve requirements for construction loans, and equity does not count toward either.
2. Build in the right neighborhood. If you build an expensive home in a modest neighborhood, you may have trouble getting the price you want for it when it comes time to sell. Conversely, if you plan to build an inexpensive home in a wealthy neighborhood, you may end up overpaying for the property.