What an exciting time, you’ve decided to build a new home. There are so many things to think about, so many lists to compile and check off; sometimes, it gets overwhelming. If you have a trusted builder, such as Revere Homes, they will walk you through all the steps and stay with you until you move into the new places and for years after. So, you’re covered.
However, if you don’t have a trusted builder or you’re seeking one, you may need some help. And, even if your builder is Revere Homes, you may want to have a little information under your belt when you start the building process. With that in mind, we’ve compiled this list of 25 terms you’ll want to know when you go into building a house.
Keep in mind that there are literally hundreds of terms you’re likely to encounter for the first time in this situation, and you’re not going to be able to know them all. That’s okay; no one is expecting you to. However, if you don’t know something, ask. Always ask. You’re building a home, and you want it to be perfect, so ask questions. Unless you’re a professional builder, you’re not going to know all this stuff so, ask questions. Don’t be timid; if something makes no sense to you or you’ve never heard of it before, ask your builder. It’s why they are working for you.
But, to get you started, we have this little list of terms you should be familiar with during this new home process. Here we go…
First off, let’s talk about the types of new construction homes. So that you know what you’re buying or what you’re not interested in buying.
1: Speculative or Spec Homes
Commonly referred to as a “spec” home, this is when a builder buys property and builds homes that are not under any contract. Their goal is to then sell the home for profit. Spec homes are fully complete when they go up for sale. Now, you can find a spec home that is under construction and buy it. The advantage here is that you can pick fixtures and features that fit closely with your personal style.
2: Semi-Custom Home
These are homes constructed by production builders. Buyers are free to modify the house structure and then select and personalize interior and exterior finishes.
3: Custom Home
This is a one-of-a-kind, built to the new buyer’s specifications. The advantage here is that the buyer has control over everything: layout, lot size. Fixtures, style – all of it being exactly what the buyers want, and the home is unique.
4: Allowance
This is not what you get each week for doing your chores. An allowance is a specific amount of money set aside in the builder’s contract for items that the home buyer will select. The list of items may include flooring, light fixtures, kitchen, and bathroom fixtures, tile, and more.
5: Appraisal
This is an estimated value of the property done by a professional appraiser. Why is this important? Well, the appraisal is one of the critical components a bank will look at when considering your purchase for a mortgage. Also, it lets you know if you’re getting a good deal on the house.
6: Blue Print
This is a technical drawing of a floor plan used to design, plan, and build the home. Builders also use it to estimate the price of the house and when requesting permits.
7: Builder’s Warranty
This you must read carefully. A Builder’s Warranty specifies the period in which a builder is responsible for repairing or replacing certain elements in your new home. It is crucial to read this document carefully, so you know exactly what is covered. These warranties usually last one to two years for materials and ten years for structural components. Again, we stress, read it carefully, so you know what is and isn’t covered.
8: Building Codes
These are the set of rules established by local or state governments that regulate how a house is built.
9: Certificate of Occupancy
Issued by the local jurisdiction, this certificate is granted after all inspections are complete, passed, and all codes are met. The home cannot be occupied until this certificate is issued.
10: Change Order
The home buyer usually issues these. It is a written document requesting a change or modification in the original plan. A change order may include the floor, adding a feature to the home, a change in some of the finishes, etc. Be aware here, depending on the request; a change order can affect the home’s price and the completion time.
11: Closing
This is the final step in the real estate process. In this stage, the ownership of the property is transferred to the home buyer.
12: Closing Cost
These are fees that occur at ownership transferral. They may include title insurance, lender fees, prorated property taxes, prorated HOA dues and transfer fees, etc…
13: Conditions, Covenants, & Restrictions
These are a set of rules developed and issued by a developer or a Homeowners Association (HOA). These rules are set up to oversee the residents of a particular community and are commonly known as CC&Rs. The can include restrictions on pets, pools, paint colors, on-street parking, and noise levels or quiet hours.
14: Deposit
This is the sum of money due at the time you sign your contract. The amount will vary depending on your home’s cost and whether you’re working with a production or custom builder.
15: Elevation
This is a two-dimensional drawing of the exterior faces of the home. At times it may also include features of the house that project flat surfaces such as cabinets or fireplaces.
16: Extras
This refers to work that you asked the builder to do that was not included in the original contract. The builder has the right to refuse to do this work; however, if they take it on, it will, wait for it, cost you extra. You can also expect a separate bill for the extra work.
17: Floor Plan
This is a visual representation of a home as viewed from above and drawn to scale. It’s ideal for gauging the relationships between rooms in the house, sizes of rooms as well as the home’s overall flow.
18: HERS index
The Home Energy Rating Standard (HERS) index. This was developed by the Residential Energy Services Network and was established in 2006. Builders use it to indicate a home’s level of energy efficiency. A low score represents a higher level of energy efficiency in the house.
19: Land Survey
This is basically a map of a property that outlines its physical boundaries.
20: Permit
It is also known as a building permit; it is a legal document issued by a governing body before constructing a new home or making significant additions to an existing home. Builders cannot start the construction process unless this permit is present.
21: Plat
This is an official map that defines the boundaries between different parcels—drawn to scale and extremely important. It shows all the features of the property and its full boundaries.
22: Plot Plan
This shows the location of the house on the lot. It also includes easements, property lines, required setbacks, and legal descriptions.
23: Punch List
This is the list of items that need addressing or fixing before the closing on the property. The homebuyer creates this list in the final stages of construction or during the walk-through. The list can contain anything from leaky plumbing and bad electricals to wrong fixtures and spotty painting.
24: Title
The formal document that proves ownership of the property.
25: Walk-Through
This takes place before the closing. It is a final inspection by the homebuyer to spot any last-minute problems that need addressing.
These are what you should be asking all the time. There is this stigma that you shouldn’t ask questions because you don’t want to appear stupid. You know when you seem stupid when the house is collapsing, and you’re saying to yourself, hmmm, I should have asked about this.
No one expects you to know everything about building a house; that’s why you hire a professional builder like Revere Homes. Before, during, and even after the construction of your new home, keep a pen and pad with you at all times and when those questions pop into your head, write them down. And then, ask them.
If your builder treats you like you’re stupid, you’ve got the wrong builder. A good builder will patiently answer all your questions and quell your concerns. If you’re building a new home, then you expect to be in it for a long time, make sure it’s exactly what you want, and don’t settle for less.
So, now you have a bit of a glossary to build upon; keep going. And, again, never be afraid to ask questions about what’s going on or not going with your new home construction.
If you have any questions about terms or just want to talk to experts about building a home, give us a call. At Revere Homes, we’re always happy to help folks who are looking to build or buy a new home.
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