We’ve all dreamed of building a home—well, having someone else build it for most of us, that is!—and currently in Lincoln there are really great options available in newly developing neighborhoods all across town. Building a dream home is a chance to customize everything, from the floor plan that suits you best to the materials and color palettes you prefer all the way down to where the outlets are placed in the bathroom (it’s important!) and the accent hardware. Choosing the right professionals will ensure that at the end of the journey, you are living in the new home of your dreams!

Finding the Right Builder for the Job

You’ll want to start out by doing your research as to exactly what you are looking for, what matters most to you and what can be sacrificed, your budget, and you’ll also want to check out the work of the various architects, general contractors and home builders that can be found all around town. This way, when you narrow it down to who you will meet with, you’ll be better able to discern who will be the best fit for the job.

jeff mann mann customs-Dream Home lincoln nebraska“When we first meet with client(s) or potential client(s) we discuss their family and lifestyle, how they live now and how they see things changing in the future,” says Jeff Mann, owner of Mann Customs Inc. “We discuss the process of building and every custom home is different. Some clients foresee everything they want in their new home while others are at the point of just knowing they want a new home.  Our job is to guide them through the process; to use our experience to make the building of their new home a fun and rewarding experience.  We start the process with the land as the lot will dictate a lot of what the home will become—the size, walk-out basement or not, window placement and again, back to how they want to live in the home. We then help design the plan around it all.  If you were to ask me what the most important thing in building is for the client, I’d always say it is to have confidence in the builder and to connect with the builder so the entire process is enjoyable, rewarding, and you end up loving your new home.

At Mann Customs Inc. we are primarily a custom home builder and remodeler. We focus on the needs, wants and desires of our clients while keeping the project focused on the budget and what is best for their investment, Building with Meaning. The home building industry is always changing, but for me the main features of the home remain as they have for years.  Open floor plans, kitchens as the heart of the home, ensuite bathrooms and outdoor living spaces are at the top of the list. Modern design also continues to make an appearance here in the Midwest and that is opening up all types of new materials and features. This includes innovative siding, glass garage doors, more commercial cooking appliances in the kitchens, green products and building practices, energy efficiency, and more ways to include technology in your home now that you can control almost everything from your iPhone.

I tell my clients what will add the most value to their new home is to build the home for themselves; to build it for their lifestyle and needs and it will be the best investment they have made.  Don’t build your own custom home with the thought of what other people may want in it but to what you want in it.  As it turns out, most people will probably want that too. Above all, choose people to work with who will make building your dream home a wonderful experience! We want you to have fun with the process and love your new home.”

Checking out model homes is a great way to get a feel for each of the local builders as far as their style and what they have to offer. You can choose to tour model homes, or you can take advantage of the bi-annual Parade of Homes hosted by the Home Builders Association of Lincoln (HBAL).

mike benker home builders association of lincoln nebraska dream homeMike Benker, Executive Vice President of the Home Builders Association of Lincoln, offers a few tips for those who are leaning towards building a home as opposed to buying:

“When looking for a home whether new or existing, the choice often comes down to one’s vision or desires for their home and location. Although the new home may not have mature trees, fully developed parks or an established neighborhood hang-out already, these items can come with time and you may have the opportunity to create the memories in developing them. The new home however will include the latest structural and life safety code requirements, energy efficiency standards and design for today’s lifestyles. Other opportunities may include selection of the exterior or interior design of the home, sustainability features, recreational spaces, color schemes, the inclusion of custom finishes or a family heirloom. Today’s technological advances are not only found in electronics, but also with the drought and disease resistance landscape and available extended life products for siding, roofing and decks. All of these items make the new home more affordable and better for our environment.

Attending an event such as the Parade of Homes, meeting the perfect builder, stumbling upon the perfect location or house plan can all trigger the start of the process to building or purchasing a new home. Alternatively the process could begin simply from a solid family decision or necessity. In these cases, attend the previously mentioned events to view homes and speak with builders or their representatives. For those who are considering building a home, you are about to become a part of a team. Each team member has a responsibility to deliver on their commitment. Communication is a key factor and vitally important in successfully building a new home.  If you are not familiar with today’s high performance homes, finding a builder with an already assembled team makes the process much easier. Before signing a written contract, visit one of their projects, ask for references and make sure details are clearly spelled out. A little due diligence up front will make the process and move-in much more enjoyable.

There are multiple sources of advice when building or remodeling, but ultimately you need to be comfortable with your decision. One of your best decisions may be to hire a professional! The magazines, do-it-yourself or design shows, family and friends are great, but they can be confusing, frustrating and overwhelming too. Knowing your budget, expectations and life of the project all help with the design and construction process. It’s a lot easier to update by adding a little color here and there to keep the interior fresh and new rather than having to replace expensive components of the home such as carpeting, tile or countertops. If you don’t know your budget, expectation or exactly what you are looking for, many professionals are able to assist by asking questions and making suggestions to learn your taste, desires and comfort level. Whether your dream home is large or small, striving for a goal is the first step in making it a reality!

Although the Home Builders Association of Lincoln (HBAL) may be best known for events such as the Nebraska Builders Home and Garden Show, Spring & Fall Parade of Homes and Tour of Remodeled Homes, others will visit the www.hbal.org website to access our ‘Find A Pro’ page to search for builders, remodelers, various trades or suppliers. Additionally, resources such as ‘Tips on Choosing a Contractor,’ ‘Benefits of Using a Professional’ and other helpful links can be found. Homes today can be built more safely, more efficiently and with greater performance features than any time in history.”

Utilizing a Real Estate Agent

Real estate agents are very educated on the current local housing market, making them another great resource that can provide helpful advice and answer any questions you might have if you are making the choice between building a home or buying one. They are also well connected in the industry and can provide great referrals or may often times also represent a local builder.

Photo-Beth-Scholz-Woods-Bros-Realty-Dream Home-Lincoln-Nebraska“When considering building a new home, start with finding an agent and/or builder you are comfortable with,” emphasizes Beth Scholz, a real estate agent with Woods Bros Realty. “Let them know what your budget is, and your agent will help you set reasonable expectations on what kind of home and where you can build to stay within that budget. It’s important to consider what area you wish to live in–do you want to be close to work, in a certain school district or a small town?  Sometimes area will dictate the builder, and other times you will be able to interview and choose your builder.

Next, have your agent show you different styles of homes. When you know what you’re looking for, have your agent request floor plans or bring in your own plan to be priced out. When pricing out a new home remember to compare apples to apples and look through the spec sheets. This document will detail allowances regarding countertops, carpet, appliances, etc. as well as what is included in your contract. I personally like to do a worksheet that shows the base price of the home (all base prices are figured on a flat lot, but walk-out and daylight homes do have an upcharge), the lot cost, and then any extras you think you want such as a fireplace, underground sprinkler system, 9’ basement ceilings, or a third stall garage, just to name a few.

Once you have found the floor plan, lot and builder, the builder will purchase the lot and price out your home with the lot included. Your agent will then write a contract that includes the total price of the home to be built. A non-refundable deposit will be given to the builder to start construction on your home—the amount varies among builders and price of the home. The builder will pull permits and start construction on your home. Your job is to stay on schedule when making your selections for your new home.

She continues, “Real estate agents are there to help you understand the process step by step. They work evenings and weekends and are a very good buffer between the builder and the client. Builders are on the phone nonstop through the day, making sure things are getting done. What you feel is an emergency, the builder may not. This is their job and they do it every day, while it is a new experience for you. The agent can answer 95 percent of your questions or concerns. They are also available to answer those questions for you right away and let you know what to expect as you’re through the process. If the agent does not have the answer, they can get ahold of the builder and get back to you right away.

Building a new home is great—you get the floorplan you want, and the roof, siding, cabinets, countertops, and everything is new. Or you might find that in order to get everything you want in a home, with the room you need, an existing home that is a few years older may fit your needs better at this time. Your agent can help you weigh the pros and cons. It is a great experience to watch your home become a reality, to visit your jobsite and see the progression as your home is being built. Your choices all come together as you prepare to move in.”

Joanne McCoy Woods Bros Realty Dream Home Lincoln Nebraska“Deciding to build a home is very exciting but can also be overwhelming,” adds Joanne McCoy, a real estate agent with Woods Bros Realty. “There are several ways to go about building. You can decide to meet with a builder and design a custom home. Or you can meet with numerous builders who have existing plans and choose to go with one of those plans. This way the builders can make revisions if needed without designing home from scratch. So, how do you find a builder? My first suggestion is to ask friends and family. But if you don’t know anyone to ask, then you can go around town on a Sunday and visit some open houses. Most builders in Lincoln don’t always have ‘model’ homes available to tour. However, many builders have ‘spec’ homes that you can see. These ‘specs’ are homes that are completed and ready to sell but can also give you an idea of a particular builder’s quality of workmanship. I often suggest a buyer meet with several builders in person to get a sense of how they work and what they can offer. After all, you will be working closely with that builder for up to 6-8 months (if not longer), so you probably want to make sure you can get along with them.

The next step is finding a lot on which to build. That could prove to be a little more difficult as Lincoln is in short supply now for residential lots. You will want to identify the area of town, the kind of lot (flat, daylight, walk-out) and any covenants for the area that would restrict the size and style of homes allowed in the area.

As for financing, this can be handled in several ways. If you find a buildable lot, you can buy it or ask the builder to buy the lot. My preference is to have the builder buy the lot. As part of the purchase contract, buyers will typically make a down payment to start the process but the builder carries the construction loan. The buyer then takes out the permanent financing to be put in place on the ‘closing date’, or the date when the house is completed and ready for the buyer to move in. In some instances, buyers will pay for upgrades or changes out-of-pocket rather than having those expenses added to the overall cost of the home. Local lenders are very experienced in loans for new construction.

If you choose to work with a real estate agent who represents a builder, you need to remember the builder is the REALTOR’s client first and foremost. They will be working to get the best terms for their client (the builder). The REALTOR is obligated to be fair and honest when helping you. However, you do have the option of having your own real estate agent represent you in the process. In just about all instances the commission for your own agent is covered in the purchase price of the home. Your agent will help set up the meetings with a builder, help you find a lot, negotiate the price of the home, offer suggestions to you about selections, help navigate through the other aspects such as finding a lender and getting title work prepared, and be there as a mediator in case of any disputes with the builder.”

She continues, “In today’s market with so few existing homes available for sale, many buyers are considering building mainly because they can’t find an existing home to buy. However, that’s also a challenge because there are so few lots left. If you do find an existing home, you can lock in on today’s low interest rates. Moreover, there are the benefits of buying a home that most likely has been enhanced by the previous owner with landscaping and window treatments. If you build a new home…well, you are getting a new home: new appliances, new roof, new furnace and a/c, new everything. It will be a longer time before you have to worry about repairing or replacing these items. Plus no one else has lived in the home. And you get to make all the selections. Once a builder agrees on a price, that won’t change (other than any upgrades or changes you make along the way). However, you typically can’t lock into an interest rate until about 60 days before closing. If rates go up, then your mortgage payment will also go up. You will also be spending money on window treatments, usually a refrigerator, a fence if you want one, and extra landscaping.

Building your dream home is an exciting process that often goes great but can also be challenging, overwhelming, exhausting, frustrating and sometimes disappointing. Do your homework. Be prepared to be available for making many decisions. Understand you might not get everything you want. And stick to your budget or be prepared to spend more than you first planned. I would be happy to help anyone interested in the home building process, and can be reached at (402) 613-0613.”

Photo_Derek_Kats_Real_Estates_Avenues_The_Brokerage_LLC_Dream Home_Lincoln_Nebraska“Existing home inventory in Lincoln is incredibly low, so many of my buyer clients are finding that new construction is the only way to find a home that meets their needs,” explains Derek J Kats, Brokerage Owner/Realtor at Real Estate Avenues: The Brokerage, LLC. “Similar to a new car versus a used car, a new home will typically be priced higher than a similar existing home. If you are a buyer looking for a value-buy, then new construction is not the way to go as most new construction home builders are reluctant to negotiate their prices. The other primary factor to consider when deciding whether to build or buy existing is the amount of time needed to build the home. Most new construction homes will take six months to build. If you have the time to wait, ability to visualize, and are willing to pay a slight premium for ‘brand new’ built to suit, then new construction is the way to go.

A Realtor who represents a residential home builder (a Listing Agent) can be a good asset as they are aware of the lots owned by the Builder, home specs, materials used, and base pricing. That being said, a qualified Buyer’s Agent Realtor may be a better option as they would be willing to show you a variety of local home builders from all ends of the spectrum, instead of just the Builder represented by the Listing Agent.  A buyer’s agent can provide an unbiased look into each builder and the homes they have on market or could build, and in most cases, a Buyer’s Agent Realtor can assist you at no additional cost.

As a Realtor at Real Estate Avenues: The Brokerage, I currently represent Stephanie Krueger of Third Generation Builder as her exclusive Listing Agent and have also been ranked as Lincoln’s top Buyer’s Agent so I have the unique perspective of understanding the building process from both the Buyer’s and the Seller’s viewpoints. With this experience it is easy to identify that the most important aspect to consider when building a new home is choosing which Builder best meets your home building needs and customer service expectations. Most Buyers are aware that the quality of materials and labor provided by the Builder is of utmost importance, but many do not consider or put a value on the overall customer service experience from the beginning negotiations, during the building process, and the warranty work after the sale as well. Many builders acceptably cut corners on materials and labor, but cutting corners on customer service can lead to an overall bad experience even if the home was quality built. Shopping around to evaluate builders is crucial when doing proper due diligence prior to building a home, and speaking with a Realtor is the best way to start that builder evaluation process.

I would be happy to arrange a new construction tour for you to help identify the correct builder for your needs and lifestyle. Please feel free to contact me directly at (402) 770-5021.”

When building a home, although you may be planning to live in it well into the future and will want it to fit your specifications, you will also want to consider what will hold the most value in the re-sale market.

Brock Owens RE/Max Real Estate Concepts Dream Home Lincoln Nebraska“It’s important to consider where you will fall in the neighborhood with regards to value,” adds RE/MAX Real Estate Concepts agent Brock Owens. “When it comes time to sell, some homeowners find out that they are at the top end of the value range in the neighborhood which can lead to much longer marking times. If you are building in an area where the homes are already established, try to stay as close to the median price range as possible when you are finalizing the budget for the project.

When buying a home it’s also important to consider the different financing options from one loan program to another–there could be a considerable amount of savings not just monthly but over the life of the loan. For those who are on the fence between building and buying, I offer a buyer’s counseling session. It’s a good starting point and an opportunity for me to answer any questions and lay out what to expect throughout the transaction on each side.”

Your New Home’s Exterior Features

The ability to customize everything about a home when building also extends outdoors to the landscape of the property, which will transform from a blank slate to a beautiful, established landscape with the help of the professionals

Ken Svoboda Rays Lawn and Home Care Dream Home Lincoln Nebraska“Especially in the case of new home or property owners, it’s no surprise that you may know little of landscape installation or its future maintenance requirements,” says Ken Svoboda, co-owner of Ray’s Lawn & Home Care. “After all, most first-time home buyers often are moving into their first house from an apartment or a landlord maintained house. My first instinct is to relieve any anxiety the new homeowners have regarding planning and maintenance. Once they’re convinced that the task ahead of them is obtainable with some forethought and planning, we get to work. We first develop a priority list of their needs and wants. We discuss a low maintenance option or a more hands-on approach. The curb appeal of the front of the new home, both short-term and long-term, is also taken into consideration.

Whether it’s renovating an existing landscape or starting with a blank slate, the landscape should reflect the home owners personality; lots of color with a free-flowing landscape or a structured formal landscape. When considering a new landscape I always have the home owners look at least ten years into the future. If they have a young family or planning a family, should we leave a large play area on the property for that impromptu neighborhood football scrimmage? If not, I direct the homeowners towards establishing their tree placement. Since the growth of a tree to maturity may take several decades, the proper placement of trees is very important. Once the priorities are set, a budget is discussed and the work begins.

The strong trend toward outdoor living spaces continues to grow every year, with the addition of outdoor kitchens with pizza ovens, fireplaces and grill inserts, and so on. The other popular trend is outdoor lighting.   Architecturally designed cast aluminum path lights and spots with a variety of finishes can enhance the nightscaping of any landscape. Like the modular constructed kitchens and fireplaces, lighting systems have been transformed from the do-it-yourself plastic fixtures whose bulbs burn out what seemed like weekly to attractive LED units whose bulbs last fifteen to twenty years with a properly designed system. Of course when starting with a blank canvas, as a new home, these features can be planned in advanced, budgeted as necessary and constructed as needs and budgets allow.”

In fact, nearly every home built today has some type of outdoor living area. Unfortunately, most decks and patios are under-used because they’re not comfortable. Excessive heat, wind, lack of privacy and just plain boring areas are to blame. Proper use of exterior shading can make these areas both beautiful and comfortable, whether it’s a temporary fix (if you’re waiting for the trees to grow, for example) or are looking for a permanent solution. Studies have shown that a properly installed shade can reduce the ambient temperature by 20 degrees or more! Modern retractable screen systems block the sun, keep out the bugs and tame the wind. Of course a pergola helps define the space and adds a real touch of elegance. When combined with a shade a pergola becomes much more than an architectural feature, they become comfortably practical.

“The most popular outdoor living products today are the retractable solar screen, pergolas with retractable overhead shade and the NEW Nebraska retractable awning,” explains Bill Budler of Nebraska Outdoor Living. “As you can see ‘retractable’ is the keyword–having the ability to open and close your shade product is a huge plus. These give you the option of shade when you need it and sun when you want it. Being able to retract the shades when not in use greatly extends their lifespan, especially during the winter. The versatility of our Side Retention System (SRS) solar screens allows homeowners to block the sun (without blocking their view), keeps out the bugs, and tames the wind–all at the touch of a button!

To judge the comfort level of an outdoor living area we suggest evaluating it at the time of day that you’re most likely to be using it. If you work during the day and will most likely want to enjoy that deck or patio during early evening for dinner and such, you’ll want to assess the area during that time frame. This will give you a good idea of how the sun will impact your outdoor living time once your home is built.

If you enjoy spending time in your outdoor living space, be sure to make it comfortable. Proper shade can reduce the summer heat by 20 degrees or more. Quality patio furniture will last longer and is more comfortable. Your deck or patio really can be the coolest room of your home with the right ‘comfort’ items.”

When considering the overall curb appeal of your home, there are other exterior features of the home itself that should be taken into account during the planning stages of the build.

Jason Olberding J-Tech Construction Dream Home Lincoln Nebraska“I would say the products that most highlight the curb appeal of a new home would be really nice triple pane windows,” notes Jason Olberding, owner of J-Tech Construction. “An example of this would be a half round window that accentuates operating casement windows below it. At J-Tech we can even compliment such a window with different styles of grid patterns or beveled glass features. Not only does a brilliant window accent the aesthetics of a newly built home but it can add value by making your dream home as energy efficient as possible!

Seamless siding has also become a very popular exterior project in Nebraska. At J-Tech we even possess our own siding machine, which is rare here in Nebraska. This allows us to be able to job site manufacture the siding to custom fit the home so there is no wasted materials and the client gets a first class product. Although some products claim to be maintenance free, that is not always the case. For instance, J-Tech Construction would recommend going with a seamless metal alloy siding as opposed to vinyl or pre-painted cement board. This will prove as a better investment down the road and you will be thankful for it in the long run.”

He further advises, “Always be aware of the contractors you hire to complete your job. Start with trust! Check accreditations, certifications and be sure to go with someone you generally feel comfortable doing business with. J-Tech Construction has a staff that lives up to those standards, which is the reason we are so successful. The installers employed by us have all successfully completed the certification courses and have received updated trainings throughout the year. Also, when building your new home, make sure the products being used are warrantied. All of our products, especially our Triple Pane Windows and our Seamless Metal Alloy Siding, come with ample material and labor warranties.

Just remember: It’s your dream home! Make sure that when you enter into contracts you are aware of all the aspects of the construction. Do your research on the General Contractor and the subcontractors that they will be using. It is not micromanaging if you pay many visits to the job site throughout the entire process. Keep in mind it is your new home and ultimately your biggest investment. Be sure to choose a company that is as dedicated to seeing your dreams come to life as you are!”

Your New Home’s Interior Features

Selecting your home’s interior features is just as important as the exterior, for both design and function. There are a lot of new trends and technology that can be incorporated into new homes that are currently being built, including more options to go green and to remotely control your home’s systems.

Photo_Lindsey_Reinke_John_Henry's_Plumbing_Heating_and_Air_Conditioning_Dream Home_Lincoln_Nebraska“Before building a new home it’s important to understand all of the new technology available that can protect your health and provide efficient heating or cooling,” emphasizes Lindsey Reinke of John Henry’s Plumbing, Heating & Air Conditioning. “There is so much information available online and from other sources. The key things to look for are quality equipment, air filtration, humidification, and controls/thermostats. My favorite customers are the ones that have a solid understanding of new technology and know what they want. They value their health and comfort. When in doubt, always ask for expert advice from the true professionals.

It’s just as important that your heating and cooling system is sized properly so that it provides efficient operation as well as comfortable temperatures. A heat load analysis is necessary to size the heating and cooling equipment. One of the better methods of sizing this equipment is using a Manual J procedure that evaluates heat loss or gain from various areas. Examples are the direction the home faces, size and location of windows, etc.  The Manual J procedure evaluates basically anything that will affect heating and cooling. The right size of equipment can only be known after fully understanding the heat load.

There are also two ongoing trends in the HVAC industry that are important for those who are building a house to understand. One trend to avoid is taking the cheap route and going with the low bid. The end result of going the cheap route typically is poor quality equipment that fails to provide ultimate comfort. There is so much to say about the cheap route, but let’s stop there!

The other trend is going with quality HVAC equipment that promotes your health comfort, and energy efficiency. You will pay more initially for better HVAC equipment, but there typically is a shorter payback that results in an overall lower cost.

It’s also easy to fall into the trap of trying to hurry up and get it done. Why not take enough time to design the perfect ‘dream home’ that will meet all of your needs? When construction begins, go every day and closely examine the progress. Take pictures and document the quality of the work. Make sure all of the details are getting taken care of properly. Even look for the smaller details like the positioning of light switches and verify they are in the best locations. Then finally, enjoy your dream home–you deserve it!”

Photo_Pat_Killeen_Engineered_Controls_Control_Depot_Dream Home-Lincoln_NebraskaPat Killeen, owner of Engineered Controls, offered his expertise on incorporating technology to control your home’s systems: “When it comes to building a new home, Engineered Controls has plenty of expertise to assist homeowners and residential HVAC and Electrical contractors with products/systems that will meet their comfort and energy needs, their security and video security needs and finally their home automation, or otherwise referred to as Connected Home, needs for today and well beyond into the future.

By partnering with a home heating and cooling technology partner like Honeywell, Engineered Controls has the ability to assist in the selection, design and installation of the home technology products that fit your needs. From award-winning wireless thermostats and zoning systems to control your home heating and cooling comfort system, to whole-home humidification and air filtration systems to improve a home’s indoor air quality.

When a homeowner is looking to enter into the security and home monitoring services arena, Engineered Controls is prepared to assist homeowners with proven security and monitoring technology to give them the peace of mind they are looking for. From state-of-the-art wired or wireless sensors that detect movement indoors by unwanted intruders, to digital video security where you can view live, streaming video in and around your home.

Furthermore, when a homeowner has their sights set on a having a complete home automation system or Connected Home, Engineered Controls has the customer technology know-how to package the best-in-class products/systems that will bring your home to life with a customized solution that allows you to take control of your entire home. In addition to the previously mentioned home heating and cooling comfort controls and in-home security systems that provide peace of mind, Engineered Controls can show homeowners how to control home lighting systems; control the access in and out of their home with wireless lock control; operate the window shades in their home for optimum ambiance, privacy and security by raising and lowering shades at specified times; and add home entertainment options to provide high quality home theater with a touch of a button. All of these home automation systems can be viewed and controlled in your home on touchscreens, televisions, tablets, smartphones or PCs.

Finally, Engineered Controls can offer unique service to pull this all together called Total Connect. Total Connect is an amazing interactive program or app that allows the homeowner to monitor and control their home automation system from a free web based account designed for a PC, tablet or smartphone. The Total Connect service essentially gives the homeowner a wireless virtual keypad that you can take anywhere. Some of the system functions available with Total Connect are remote access to home automation features to control Z-Wave® technology for lighting control and scene selection, wireless locks and thermostats. With a Total Connect account you can view full digital video of your home’s activities when you are away from home at work, on vacation or where ever you are!

When considering trends in our industry, two things are developing. From the narrowed perspective of just the new home market, it would be the Connected Home concept. From a wider perspective, the next mega-trend is the Internet of Things or simply IoT.

Connected Home Concept

In the not-too-distant future, homes around the world are going to become smarter and more and more connected places to live. This was evidenced in January (2015) at the Consumer Electronics Show in Las Vegas, where the Connected Home was one of the hottest topics discussed at the show. Although the drive to create a smarter and more efficient home increases daily, it is driven by mobile devices interacting with numerous connected objects and devices, the momentum to building (creating) home devices to appeal to more than just the high-income market.

Home automation devices such as smart thermostats and WiFi-enabled lightbulbs, home monitoring devices such as digital security camera that broadcasts to a person’s smart device and home security systems that connects to a central monitoring station. There is a high demand for connected devices like thermostats, light switches, door locks, light bulbs, sprinklers, washers, refrigerators and beyond. Studies show that about 70% of Americans want to control something via their mobile devices at home without getting out of bed. Research indicates that the Connected Home device sales are expected to drive over $61 billion in revenue this year alone.

Besides major technology companies like Honeywell, other scrambling to enter the Connect Home market are Apple, on their iOS platform of customers, Phillips, Samsung, GE, Google and many more.

The Internet of Things (IoT) Concept

On a broader perspective, The Internet of Things (IoT) is a term the technology industry has given to the network of physical objects or ‘things’ that have embedded electronics, software and connectivity to enable it to achieve greater value and service by exchanging data with the manufacturer, operator and/or other connected devices. In the Home Automation market, the IoT devices are typically used to control lighting, heating, ventilation, air conditioning, home appliances, communication systems, entertainment and home security devices to improve convenience, comfort, energy efficiency, and security.

In the Energy Management market, it is expected that IoT devices will be integrated into all forms of energy consuming devices (switches, power outlets, bulbs, televisions, etc.) and be able to communicate with the utility supply company in order to effectively balance power generation and energy usage. According to Gartner, Inc., a technology research corporation, by 2020 there will be nearly 26 billion devices on the Internet of Things.

For the average homeowner looking to build a new home that is interested in some aspect of home automation or Connected Home, my advice is to do your research. There is plenty of information on the internet today that will make the average homeowner much more knowledgeable about what is available in the home automation market than anyone realizes.

Furthermore, make sure to contact home technology contractors and distributors that are in the home automation business. They can help answer questions about which products will integrate on the same networks as others. And finally, make sure when you are building a new home that you use cutting edge HVAC and Electrical contractors who are involved with cutting edge products and systems on a day-to-day basis.”

Financing Your New Dream Home

When planning to build a home, you’ll also be working closely with an experienced financial professional who will lead you through the financing process each step of the way.

Matt Gutschenritter Cornhusker Bank Dream Home Lincoln Nebraska“The process of obtaining financing to build a new home is not much different than the process of obtaining financing for an existing home,” explains Matt Gutschenritter, Assistant Vice President of Mortgage Lending at Cornhusker Bank. “Basically, at the end of the construction, all parties involved including the borrower, the builder, the realtors, the bank, etc. will want to have the peace of mind that new owners have their long term financing in place and ready to go.  The process starts with getting pre-approved for long term financing.  Once we have that in place, it’s a matter of having the discussion with the builder to determine who will be taking out the financing for the new construction, and putting together a contract.  If the builder takes out the construction loan, then we work with the buyer in getting them approved for a purchase transaction once the house is completed.  If the buyer/borrower takes out the construction loan, we work with them during the construction process, and get them prepared to have their long term financing set up as soon as their house is built.  Upon completion of the construction, we would set up their long term financing and payoff their construction loan.

At the start of the process when we are getting the client pre-qualified for their financing, we look at credit, down payment, monthly obligations, income, etc.  This will allow us to determine not only if we can get the client approved for financing, but even more importantly, to make sure that the client is comfortable with their new house payment obligation.  This is essential since this monthly payment will likely be around for about the next 15 to 30 years.

Furthermore, mortgage rates continue to be at or near record lows.  It seems most of the talk around the industry is that the Federal Prime Interest rate may soon be increasing.  While not directly linked to long term mortgage type rates, this will usually coincide with mortgage rates increasing at some point in the near future.  As far as resources go, usually we take out an interest rate ‘lock’ around 60 days prior to the completion of a newly constructed home.  However, with the threat of rates going higher in the near future, if someone is losing sleep over these interest rates, at Cornhusker Bank we offer a six month ‘lock’ program to help eliminate this issue.

There are benefits to both building a new home as well as buying an established one.  The most obvious advantage to building is that you are assured to get the features, and floor plan that you want.  However, when it comes to building, you may not be able to build in a neighborhood that is close to the area of town that you want to be in based on location near schools, work, shopping, friends and family, etc.  As far as costs go, it can be more expensive to build than to buy, but not always.  The initial costs to get into a new construction may be higher, but chances are there should be minimal expenses when it comes to repairs, decorating, and general upkeep.  With an existing home there will likely be the need for replacing the roof, windows, utilities, etc.   With a newly built home, everything is built to current code, and therefore should be less expensive to heat and cool.  Most people do not realize that Homeowners Insurance is typically less expensive on a newly built home as well.

At Cornhusker Bank, not only do we provide financing for the construction project – whether it be the builder or the borrower taking out the construction loan – but in most cases (depending on the type of financing the borrower goes with) we continue serving the client by keeping the servicing of their new loan here at Cornhusker Bank.  Located right here in Lincoln, we are staffed to service our mortgage loans into the indefinite future rather than selling this servicing off immediately after closing on the loan.   This also means that we go the extra step to ensure a smooth transaction, because we know chances are we’ll be working with these same clients far into the future.

We have a lot of useful information on our web site, www.cornhuskerbank.com, where, amongst other features, a customer can complete a mortgage loan application or pre-qualification on line.  The application has worked well for many customers and their busy schedules.  It is streamlined and therefore eliminates a lot of the questions, based on the answers given, that the regular paper application presents.

Although construction loan rates will vary from one lender to another, usually the difference is minimal.  Always keep in mind that the typical construction loan process is approximately six months long and during this period the customer only pays interest on the balance that has been drawn upon.   Do not get overburdened with the construction loan itself–the bigger financial impact will come with the long term financing.  Look for a lender that has your best interests at hand for the long term.”

Bart Peters Security First Bank Dream Home Lincoln NebraskaWhile building a home can be done rather economically in current times, since the sky’s the limit when building a home, you may easily be looking at a large price tag if your budget allows. Bart Peters of Security First Bank, in conjunction with NerdWallet, provides the following information for those who may need to consider jumbo mortgage:

Securing a mortgage can be one of the more stressful aspects of buying a home. Buyers who need a larger mortgage have the added challenge of finding a lender that offers jumbo loans. Fortunately, more and more banks fall into that category and securing a jumbo mortgage is getting easier.

Do you need a jumbo mortgage?

In most markets, the limit for conventional mortgages is $417,000. Loans higher than that are in jumbo territory.

But a $417,000 loan won’t get you very far if you live in an area with high costs or if you want a big spread. That’s why the ceiling on conventional loans is adjusted upward if you’re buying a house in Maui, for example, where property values are higher than the rest of the country. Check the Federal Housing Finance Agency’s website to see whether the standard limit for conventional loans applies in a specific county. If you’ll need to borrow more, a lender such as Security First Bank that offers both conventional and jumbo home loans might be your best bet.

Some lenders shy away from what are sometimes called nonconforming loans because the debt can’t be sold to Fannie Mae or Freddie Mac. These government-sponsored companies buy mortgages from banks, allowing the lenders that originate the loans to recoup the capital and use it to make new loans to other borrowers. Lenders who focus on originating mortgages and then selling them quickly to Fannie or Freddie are more likely to steer clear of jumbos.

Historically, jumbos often carried higher interest rates and tighter lending restrictions than conventional mortgages. After all, banks are risking more if they loan you larger sums of money. But recently lenders have begun offering competitive terms in an effort to build strong long-term relationships with their customers, and it’s easier to get a jumbo loan with rates comparable to a conventional loan’s interest.

What do you need to get approved?

Like other mortgages, borrowers seeking jumbo loans need to demonstrate that they’re able to make the payments. Most banks like to see borrowers spend no more than 29% of their gross monthly income on a mortgage. But that includes all the things usually bundled into a typical monthly house payment — loan principal, interest, taxes and insurance, often abbreviated as PITI.

It’s best to bring a 20% down payment to the bargaining table, but some lenders  offer jumbo loans to buyers who put less money down. Be prepared to show that you have other assets in reserve in addition to the down payment. Even hard-to-access money such as retirement funds is usually acceptable, but lenders want to see that you have some money in reserve to pay your bills in case of a job loss.

As you prepare to apply for a mortgage, take steps to improve your credit score. Pay down debt, clean up errors on your credit report and avoid opening new credit accounts right before applying.

These days, outsize home loans are well within reach for buyers whose finances are in order, and you might get an interest rate as low as on a smaller loan. If you have the income, assets and credit to qualify, getting a jumbo mortgage should be no big deal.
(Source Credit: Virginia C. McGuire, NerdWallet)

Brett Sundberg West Gate Bank Dream Home Lincoln NebraskaBrett Sundberg, Loan Officer, Commercial and Residential Construction Lender for West Gate Bank ®, also offers the following tips for buyers who are looking into financing to build their own home: “It’s essential to find a good builder and get comfortable with their experience and also their banking relationship.  You want to make sure you are working with someone reputable and that has reasonable financial wherewithal. It can be beneficial to allow the builder to get the construction loan in their name, as most notably this increases their accountability to perform.  The downside to this is that you do not get to see the actual costs on a fixed price contract.  For this reason, you want to negotiate with the builder for transparency, when you have a cost plus a percentage contract.

We can also line you up with a pre-qualification for the permanent mortgage and try to get your rate locked at the appropriate time.  The construction loan only lasts for 6-9 months and will be replaced by your long-term mortgage.  During this time you want someone watching mortgage rates with you and helping you lock the all-important mortgage rate.  The rate lock mitigates your exposure to the interest rate risk on your long term mortgage because while the home is being constructed, rates could climb. It remains a great time to buy or build due to the historically low mortgage rates.

Because of low rates housing prices are higher and supply is low.  Current supply of existing homes is very low, so if you are in a hurry to buy you may pay more.  You may consider looking at homes that are under construction but have not sold.  This shortens the time before you can move and mitigates the risk of interest rate changes.  There are always several homes under construction that are available for sale but may not be listed yet.  By driving through new housing developments you can possibly find a home that suits your needs.  Depending on the stage, you may be able to make some design or furnishing decisions.

It’s advantageous to talk to a construction and/or mortgage lender that is consultative versus someone who is simply trying to get a loan closed.  Be open to advice about what the banker is advocating for you.  Bankers are aware of many pitfalls and it is wise to take advantage of this free advice.  Look for a bank that will locally service your loan to avoid dealing with slow and poor service.  It is always nice to know the people who service your loan are right here in Lincoln. When your mortgage loan is with West Gate Bank®, we have something many banks can’t offer—local decision-making, local processing and local servicing.”

Protecting Your Investment

As such a major investment, it’s important to make sure your new dream home is protected. Homeowner’s insurance is a necessity, and while there are many similarities, there are certain differences that may apply to those who choose to build their dream home as opposed to buying an existing home.

Douglas Kruce LUTCF American Family Insurance Dream Home Lincoln Nebraska“Generally when building a house, nine out of ten people go with hiring a builder,” explains local American Family Insurance agent Douglas Kruce, LUTCF. “That one out of the ten will act as the builder themselves and then hire their own subcontractors as needed. In the latter case, American Family offers a special endorsement called Builder’s Risk Coverage that can save a person a great deal of money if they are comfortable with being their own general contractor.

For the other nine out of ten that hire a general contractor to build their houses the way they want it done, or even for those who buy spec homes, American Family has the largest discount for insuring a new construction home. In fact, if you’re buying a brand new home we offer the largest discounts in the state, and that applies to a home from 0-10 years old. By the time you combine that with the other discounts a prospective client can qualify for, it’s been possible in my experience to cut a premium in half on a new home, sometimes more. So no matter if you’re building or buying a newly built home, an American Family Insurance agent can be an excellent resource who will be able to help you find the right fit save you a great deal of money on your homeowner’s insurance.”

Kruce adds, “Over the last decade, storms have been noticeably stronger and the Midwest sees its fair share of inclement weather. As a general trend, many homeowners are choosing to purchase hail resistant roofing material, which also provides for another sizeable discount on home insurance. Make sure to talk to your agent about how the roof, siding, and gutters are treated because there can be subtle differences as to how different insurance companies handle these items. Also, make sure to talk about coverage of personal belongings. Whether it’s jewelry or just your lawn mower, there can be subtle differences on these items as well. Many times people find out at the wrong time that their insurance policy only covers personal belongings for the ‘actual value’, which is generally what they would be priced at a garage sale or on Craigslist. It is very important to have the ‘replacement cost’ covered, so that you can get your items replaced with new, comparable items. Overall, it’s always good to meet with an agent, lay everything out on the table, and then discuss and verify the ins and outs of your policy. Scenarios in our homes will change, so after the initial visit make sure to stay in contact with your agent to keep everything current—it’s always better to be proactive as opposed to reactive when it comes to having the proper insurance coverage.”

Randy King Kinds Home Inspections LLC Dream Home Lincoln NebraskaAt the completion of the build, a final walk-through of the home is advantageous to protect your best interests as the homeowner. This will ensure that everything is in working order and to your satisfaction as the buyer. “Most builders have a clean-up crew that does final detail cleaning before the home is occupied as well as a crew that goes through the house and tests all lights, outlets, appliances, fireplaces, sprinklers, and so on to ensure proper operation,” advises Randy King of King’s Home Inspections, LLC. “If a final walk-through isn’t set up with your general contractor, I highly recommend requesting one. In some instances I’ve had clients request a home inspection to have an independent set of eyes on the property, which ensures impartiality. However, as most builders offer at least a one year warranty, any issues that arise during the first year are addressed without any additional costs to the homeowner. A good builder spells out his warranty; exactly what is and is not covered. A booklet or workbook for the first time homebuilder to use as a guide is also a very valuable resource. While it’s fun to build your ‘dream home,’ it can be a lengthy and frustrating process, and that can be minimized with good, effective communication and by being an educated consumer.”

While building a home may present its host of challenges, there are also a lot of really nice perks. Be prepared to make a lot of decisions, and as such, ask a lot of questions and don’t hesitate to utilize all of the different resources that are available. Most importantly, make sure you are working with experienced professionals who you trust to turn your unique vision into a reality. Building a home isn’t for everyone, but it is the way to get exactly what you want for the largest investment you’ll likely make in your lifetime, and you can’t top that!