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Construction

The Appraisal Process

By | Construction, Financing, How It Works, Learning Center | No Comments

In the residential construction home business, one of the more trickier things to make sure sufficient funds are available for your project is the appraisal. Essentially, once a client orders their home and your custom home plans have been drawn up, we send the contract along with the blue prints to the lender. Of course the lender needs to place a value on the structure and the only way to do that is to get an appraiser to determine its value. This cost is passed along to you the client and it typically runs around $450-600. Depending on how busy things are in the real-estate world, appraisals can take up to 3 weeks.

Appraisers use a software program where values are placed on such things as square footage, sizes of garage space, quality of products, such as granite or Formica. Where you build is perhaps the largest contributing factor because they will pull values from other homes in the area that recently sold or were constructed. View lots, homes on acreage, existing structures, all play a role in determining worth of the project.

After the appraisal is completed, the lender will set in motion what is referred to in the business as “funding the project”. If the value of the project, cost of construction or acquisition cost is more than the appraised value, the client(s) will have to bring “money to the table” to cover the difference. If your appraised value is more than the acquisition cost, depending on how long you have owned the land, a down payment will be determined to fund the loan. Most construction loan programs that banks use take into consideration the length that you have been on title with the land; if over a year, known in the business as “seasoning”, you can obtain 100% financing. You will have to confirm of course if your lender offers this. If, though, you are negotiating on land, then banks offer different programs that will require as little down as 5% up to 20%. For the most part, rates are similar, but “closing cost” can often be different. Closing cost is margin that in essence means the cost of doing the business of getting the loan in place. Say a bank says they have a 3% closing cost. If your loan is $300,000 then it would equate to roughly $9,000 dollars. That money can be for the loan agent, but mostly it’s what the bank is making off the sale of the money it uses to loan to you. A strong word of caution here: when they say 3%, it does not always mean 3%. They still have junk fees. A junk fee might be “courier service”, “Administrative Services”, “Pen Use”… Not to be funny, but when you read some of the fees, you might want to chuckle to keep from crying. We did mention 3% closing cost but others can be 2% and some higher if your credit worthiness and or FICO scores are difficult. You might be able to negotiate some of the junk fees, but I have found it almost impossible to negotiate the closing cost fee unless it is for a large sum of money. At this point it’s time for a review:

Let’s reflect on what we have learned

  • Select a builder to build your home (True Built Home should be your logical choice)
  • Select the home you want
  • Order your home-processing payment from $2500-3500 will be required
  • Get your custom plans completed by our excellent design team-depending on work load and any changes you make it can take up to 2 weeks
  • At this point we can send the blueprints to the lender along with on the other important paper work for appraisal, 1-2 weeks. We also send the plans out to get engineering if needed-1-2 weeks
  • Once appraisal has been completed, the lender normally collects all the bids and estimates for the project and “runs” the numbers
  • Once engineering is done and all the financials look good, client submits for building permit
  • Once the permit is completed-4-6 weeks for most counties/city, you’ll want to call your local True Built Home Branch and request your pre-con meeting
  • You’ll want to bring all county/city paper work, along with your plans stamped from the county/city to the per-con meeting
  • Under normal construction times, we should be able to get a foundation crew to your site within 2 weeks. During especially busy times, it may take longer
  • The pre-con meeting finalizes all selection and any last-minute changes to standard or upgraded items
  • Depending on cost of the project and whether or not you own your land, a down payment maybe require to the lender to fund the project
  • True Built Home is given an escrow number and we verify funds are available. If you are a cash deal, we collect a percentage of the first payment at the pre-con meeting

Granted, all the above things are not “inspired”, it typically flows this way.

One of the fundamental things the owner of True Built Home, Lewis D Mann, wanted when he started the company was to impart as much knowledge about the products he puts in the homes; the process that True Built Home uses to construct their beautiful house and the transparency of the process to you. We hope you find this article informative.

For more information regarding appraisals, you might find this article interesting as well.

If you do happen to come across a dead link, please notify us. Thank you.

 

Reflecting on the 2016 revised Washington State Energy Code

By | Construction, Learning Center, News & Info, Products | No Comments

As of July 1, 2016 all Washington State home builders are subject to new energy codes that have resulted in state-wide price increases. In a nutshell, builder receives credits when they use energy saving methods in the home construction process. In the past, the number of credits required for a medium dwelling unit (1501 – 5000 sf.) were 1.5 and could be met in a variety of methods. A hybrid hot water tank could get you 1.5 credits and it still can, but the state has moved the proverbial bar higher and now all builders have to get 3.5 credits for medium dwelling units. How we obtain those credits can be either good or bad for both builders and those desiring to build. How so? It’s imperative that you understand what you are building into your home and that the credits the builder is offering is economical for you, not just the builder. Adding these energy saving items is obviously good for you and the environment in the end. Will you have to purchase additional things for your home to make it comfortable? Let us explain.

Some builders are offering standard ductless units on all their homes to obtain 1.0 credit, and then obtaining the other 2.5 in a variety of means. Ductless units by-the-way were invented as demand for cheap A/C and heat were needed for older homes. It is minimally invasive because it literally is like a wall A/C unit that hung out of the window. They are in demand for retro-homes or remodels. Granted, for homes 1500 square feet and smaller, these units with one head for both heat and cooling may indeed be sufficient. We ourselves take this approach for all of our homes 1500 sf. and smaller. However, on a two story or a large rambler, if you want to get cooling and heat in all areas of the home, more heads are needed. Imagine while ordering your home from other builders and you are told that if you want sufficient cooling and heat in other areas of your 2,500 sf. home, you have to pay an additional $2-3-4k more!  Why would the builder offer the home in such a way? Because it’s their least expensive means to obtain the credits needed. This will put the client in an awkward position if you want even heating and cooling in the whole house. How so?  Because the builder will offer you an upgrade for extra heads for the ductless unit or offer the option/upgrade that True Built Home does standard-the furnace and heat pump! True Built Home has taken a completely different approach.

Ductless units have their place. However, on larger single-story homes and two-story homes, they make little sense. In this regard, True Built Home offers a high efficient electric furnace and heat pump system standard on all homes 1500 square feet and larger. This gives us 1.0 credit, just like a ductless unit, without the additional expense to the homeowner of adding more heads to sufficiently cool and heat the rest of the home. Let that sink in a bit. Because, when company personnel sit down to discuss these very things, some companies think, “how can we make more money”, while we always take the approach, “how can we add value to our homes”.

In the end, don’t be fooled by some who say that ductless are the “only” way to go. They indeed do have a purpose, but not when you have to pay more for some that could have simply been addressed the right way to begin with.

True Built Home – How we purpose to meet the new Washington Energy Codes

  1. High efficient electric furnace package along with high efficient heat pump system
  2. Low-flow Moen faucets-rated #1 JD Powers
  3. R38 under the floor
  4. LowE .28 windows
  5. Heat pump (hybrid) electric water heater

*Where natural gas can be substituted, an additional up-charge will apply for additional venting and piping.

9 Tips for Hassle-Free Home Construction

By | Construction, How It Works | No Comments

Find out how to build your home with as little difficulty as possible!

If it’s your first time buying a custom built home, it can be difficult to know what to do. HGTV has compiled a list of 9 tips to guide you through the home buying process at: http://www.hgtv.com/design/decorating/clean-and-organize/9-tips-for-hassle-free-home-construction. Whether this is your first or fifth home construction project, True Built Home is there to help you create your dream home. http://truebuilthome.com/.

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How can True Built Home SAVE you thousands of dollars!

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I have 23,000 reason why you should build a True Built Home

When comparing home builders side by side, it can really be tough for you the buyer. Why? Because not all apples are built the same.

As an illustration, consider if you were buying a new car. Sure, it comes with wheels, engine and transmission. However, if it was say an automatic transmission instead of manual, leather seats instead of cloth, nice rims instead of hub caps, it becomes apparently clear that you are buying a nicer vehicle than the plain-jane. However, you should expect or demand that the cheaper car should also be priced cheaper right? If then you bought the cheaper car, but paid the same price as the nicer car then yahoo for the dealer, but shame on the consumer for not doing their homework.

It’s similar with our homes compared to others. For instance, I have shouted this from the roof tops, but it’s so important that I am going to stress it in another way. I am going to compare a top-selling floor plan by one of our major competitors to our top-selling home just to show you how much more money you are wasting by ordering my competitors house and THEN, explaining why we can build for less money with more quality features than builder “X”. After which if you choose to literally “throw your money away”, it’s on you.

Being discreet I will simply say one our largest competitor sells a home that is 2576 sqft, 2 car garage 2 bath in Washington for $158,900 or roughly 61.68 psf. We’ll compare that home to our best seller the Juniper Ridge which is 2527 sqft with two car garage 2.5 bath for $155,900 or 61.69 psf. nearly the same square footage price right? So you would think it should have pretty much the same features, correct? It’s important to compare apples to apples so you the consumer can have a clearer idea of what you are getting in your home or what you may want to add to get a nicer home. I am going to point out only where glaring differences exist. For starters let’s go to the foundation because, you should have noted that you already get an extra bathroom with our TBH house (about $3500);

Foundation – They have a 22’’ foundation, True Built Home (TBH) offers a 24’’ foundation. Why shorter? Obviously to save money. In addition, they do a hung joist floor where we do a rim joist floor. That essentially cost the builder more but the reason being is we need that extra space because we often run all the HVAC plenum under the house, but the real benefit is almost all clients want access to the crawl space for future use. They do not offer the electric furnace package standard, their standard heat source are wall units. So, between the two items mentioned here, you are looking at about a 10k dollar upgrade. Get out your wallet.

Next; their garage space is 22×22, where ours is 22×24 or 44 more sqft. To add 44 more sqft to their garage you’ll likely be charged 1600 dollars. Oh BTW, your TBH home will come with a freezer jack, and 2 outlets in the garage and a plug-in the ceiling because we do a garage door opener standard (we mention later in this article) – put your hands up with our competitor because they are going to charge you another $500-600 dollars for those items.

Fascia board – If you look at their product, they attach the gutters right to the truss tails. However, a True Built Home comes with fascia board. The cost to add to our competitor’s house add $700-800, and the peace of mind that the truss tails won’t rot! As you look up under the overhang of the roof, with their home you will see oriented strain board or better known as OSB. While this is a great product and we use it too on our homes, we don’t use it for the overhang of the roof. There is a debate on whether or not to allow this to be exposed to the constant weather. Builder “X” will tell you that the paint you put on it will be just fine, however, it still is unsightly and will it hold up under Washington mood swings with our rain and sun?? TBH only installs CDX plywood. It’s smooth, can be painted and durable. It looks great and last for years when used properly. If they offer it, you might pay as much as $500-600 extra dollars for this True Built Home standard feature.

Let’s move inside where the costs are really going to go up.

Carpet pad – We do an 8lb pad, they list “carpet pad” as their standard and one would only guess that it’s a 6lb because if it were 8lb, they would mention it. Upgrade cost-around $700 dollars

Our hemlock solid wood trim stained to match your cabinets is by far a step up from what our competitor offers. Their standard trim is an embossed (plastic) coated finger jointed wood trim. Obviously much less expensive and it shows but the real problem is when you damage it. You see, because it’s embossed you can repair it to make it look right again. With a true wood trim, when it gets nicked or damaged it’s an easy fix. Do you desire that TBH standard? It will cost you about $1800.

If you get rid of the cheap trim, you’ll have to upgrade their door package because they are an embossed flat photo finish door to match the plastic coated trim. When will it stop, right? Add roughly $2000 dollars because our interior doors come painted as well! We offer 5 different whites as standard. However, if you have a different color in mind, we charge a bit more outside of our standard white.

All of our cabinets come standard as a 36’’. Add $800 dollars for that change. Are you yelling for mercy yet?

Back to the garage – We include the opener. However, if you are their client you may want to open it on a rainy day, right! Add $400-550 dollars.
We use only Moen faucets throughout all of our branches-Not sure what they use, they don’t list it but if they don’t you could be looking at around $900-1100 dollars to have installed a nationally recognized and award-winning faucet. We offer both the Brantford and the Eva standard in chrome. Satin and ORB are an upgrade. Keep in mind the deep kitchen sink and we hope you’ll be pleasantly surprised by our faucet as well.

We really could mention more like HD Formica counter tops, a better selection of standard vinyl and carpet, door hardware, bathroom hardware; all of which are upgrades by others. So, if you walked into builder “X and wanted the “Standard” True Built Home, how much more would you have to spend? Sit down.
You would spend north of twenty-two thousand dollars, that’s right $22,450 dollars, and we are being conservative!

So, you should be asking yourself why and how. Why do they do that, and how can TBH offer more for less? The big secret is they are franchises. Yep, they have to pay the mother corporation for each home sold and they make the majority of their money on upgrades, and you pay out the nose to make their business model work. True Built Home is owned by only one person; not like a franchise and not like another competitor of ours which is owned by three families. When compared to them as well, you end up funding their checking and saving account, not yours.

So the question we want to ask is when a company offers a product but does not list the items that go into the home… why not? The other is, if a company does not list the price of their homes, why not? When you the buyers are kept in the dark from the start, how might you be treated during the process and at the end of the process?

Our standard home, is our competitors upgraded home.

Obviously it’s your money and you can spend it how you like, but nearly $23K is a LOT of lattes and movies. Or, as we stated at the front of this article, a car with leather seats, nice rims and an automatic transmission!

Building a Custom Dream Home: Advantages and Disadvantages

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Custom Dream Homes

To build or not to build?

Building your dream home could easily be the best decision you ever make, but it is a big commitment and should only be entered into after you’ve considered the advantages and disadvantages of building your own home: http://www.builddirect.com/blog/building-a-custom-dream-home-advantages-and-disadvantages/. At True Built Home, we work to make sure that the advantages of building always far outweigh the disadvantages for our customers: http://truebuilthome.com/.

Add a Covered Porch Upgrade to your Home Plan!

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Covered Porch Upgrade

Add a covered porch to your new home.

A covered porch is the perfect place for throwing a party or for relaxing after a hard day. If you wait until your home is built to add a covered porch, it can be difficult and expensive to get all of the matching materials and reconfigure your home so that it can accommodate a new porch. It is much easier to plan for the porch at the outset of building your home. Learn about the True Built Home covered porch upgrade here.

 

Own Your Own Piece of Wine Country

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Oct-27

Prosser, right in the heart of Washington’s Wine Country, is an excellent place to stake a claim and settle down into one of the country’s most beautiful areas. With a relaxed small town feel but also as a hub of culture, living in Prosser may be your dream come true. Prosser, Washington may be the ideal place to live for you and your family.

Just a short drive from Yakima or the Tri-Cities, Prosser is also noted as having one of the best school districts in the region. The Prosser School District includes the following schools, all with an outstanding reputation for excellence:  Keene-Riverview Elementary School, Whitstran Elementary School, Prosser Heights Elementary School, Housel Middle School, Prosser Falls High School, and Prosser High School.

In Prosser you will delight in the tree-lined streets, landmark buildings, historic museum, city parks, the river shore, and tremendous agricultural bounty. Walking and cycling are made very comfortable by the gentle terrain. Challenging climbs and majestic vistas are offered at the Horse Heaven Hills. Many wineries are located in and around the Prosser area, with the Tri-Cities, Yakima Valley, Horse Heaven Hills, and Red Mountain wineries all within a short 30 to 45 mile scenic drive.

Blessed with the nurturing of over 300 days of sunshine each year, Prosser stands among the country’s richest regions of agriculture with ever abundant fruit, orchards, vineyards, produce, livestock, and wheat fields which surround the community. The area’s many hop growers help to supply nearly 80% of the United States’ and over 20% of the world’s most crucial ingredient for brewing.

An eclectic mix of art galleries, specialty shops, tasting rooms and restaurants are to be found in Prosser and the surrounding area. The Princess Theatre regularly comes alive with music, dance, theater, and film. Many events and festivals help to celebrate the region’s collective heritage, and there are ample sports and holiday celebrations to enjoy. The Prosser Aquatic Center is a great place to spend a day with the family. Prosser may be the perfect place for you to enjoy the good life with its long summer evenings, amazing sunsets and spectacular mountain views.

More information about Prosser, Washington can be found at: http://www.tourprosser.com/. We can help you to build your dream home in Prosser or any location in our building area that you desire.  http://truebuilthome.com/

Big Rambler, large covered porch and why wouldn’t you add the covered porch?

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I often wonder why folks don’t upgrade to a large covered porch when ordering a home. Having the space on the lot makes it easy. Adding the covered area in essence increases your living space. Add a fan, TV jack, lights, and you’ll enjoy the space often year round. Here is a house we finished in the Spokane area some time back and a few other covered porch ideas.

 

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