10 Tips for Building Your Dream Home

Whether you're considering the perfect retirement castle or simply want to avoid the lingering odor of a previous owner's ferret, there's nothing like moving into a brand-new house, where nothing needs to be painted or repaired.

Dream homes don't come easy. When I worked in the loan servicing industry, countless borrowers called to express their dismay with the construction process. The most common complaint was "they never showed up." That's because, during the housing boom, builders were trying to simultaneously run as many projects as possible.

Now that the housing bubble has burst, borrowers have a different problem: many small builders are going out of business. If this happens before your home is completed, you're headed for trouble. You may have to hire someone to do work you've already paid for. You could also be on the hook if the builder failed to pay a subcontractor. Either way, your building costs are going to mount.

Here are some tips to help to limit your risk:

1. Choose a building site carefully. It may seem obvious, but there's usually a reason properties sell for bargain prices. For example, a lot abutting a highway may not actually be zoned for building. If you don't do your homework, you could be stuck with a useless lot. The real estate agent or seller didn't tell you? Tough luck. This may seem like a crazy example, but I've seen it happen!

Is the area mostly built up? If there are wide open spaces near your new home, you could be dealing with new commercial construction or a new school just around the corner from your new house. Enjoy the filth during the construction process. Then enjoy the traffic.