Homes Custom Builders

How much of a deposit do home builders require?

I am going to build a custom home (approximately 2 500 to 3 000 sq. ft.) that would end up costing approximately $400 000 for the lot, and approximately another $400 000 in the end when the dust clears, and financing is not a problem whatsoever. So I would like to know how much of a deposit would a builder require? $200 000? $300 000? Also, are there any other deposits/fees, etc (ie some sort of building fees, city/town fees and deposits, taxes…)?

Take the $400,000 for the land out of your equasion… Your going to need to have purchased this before the builder really is involved.

For the rest… Your going to pay permit fee’s to the city/town for your building permits, design review etc… Your going to need to have paid your architech and structural engineer for the plans they are going to draw for you which you will be turning over to the city for approval as well…

Once you get to the builder the deposits may have to go through your lender if your doing a construction or construction to permanate loan for the property purchase and building.

When doing a construction loan usually there are draws spelled out in the loan. Draw one maybe for the land purchase, architech/engineer and permits. Draw 2 would be for the builders deposits based on the materials needs for the first phase of construction and so on…

If your financing this yourself then check with your states contractors licensing entinity… There are specific percentages a contractor can take as deposits based on the work to be performed and this will vary greatly by state. I would check with the state anyway just to verify the builder is licensed, does he/she have any complaints on their license? How were those complaints resolved? Check on their insurance as well. If they are on your property and the insurance is not in place or is not up to snuff you may have to pay a claim out of pocket or against your own insurance.

Good Luck

Whitney Blair Inc. Home Builder New Home Slide Show, 2008 Southern Living Custom Builder of the Year

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