Pre-construction checklist
It took nine months from application date to get the land use and construction permits for my new home. The architect handled queries from the city and I paid permit fees online, so, although the process was long, it didn’t take up much of my time. The date the permits were issued also dovetailed nicely with my builder’s schedule, who was completing another project.
Soon after the permits were issued, I signed a construction agreement with the builder. I engaged a real estate lawyer to draft an agreement, which I strongly recommend. The builder had proposed a more rudimentary contract, which my lawyer felt didn’t fully represent the intent for a lump sum (fixed price) construction contract. The agreement also contains a deadline for completing construction (one year from start), after which the builder will be liable for $500 per day of liquidated damages.
Getting the permits and construction agreement in place completed the checklist for the construction loan, which closed a few weeks after permit issuance. The loan will finance the entire cost of construction, though any additional costs from change requests will be funded by me. Because the lender doesn’t intend to hold back any amounts from the builder except the final ten percent of the construction cost, my lawyer and I asked if the builder would cut me a check for five percent of each of his drawdowns on the loan, which he agreed to. This would result in me retaining a portion of the construction cost earlier than the lender would.
With the permits, agreement with the builder and construction loan in place, we were finally in a position to break ground, 22 months after I purchased the vacant lot.
The Bespoke Home 