Building your own home isn’t for the faint of heart, but for those brave enough to take on the task, the rewards are beyond measure. It gives you the opportunity to tailor your home to suit your tastes and needs for both now and in the future. It’s also an extensive process with plenty of room for error! Going into the process with your eyes open and a firm plan can save you heartache along the way. Before embarking on your own custom home journey, here are some key points to remember.
What’s Involved Before Construction?
Is your lot an approved building site? Where and what you can build on your property is mostly governed by zoning setbacks, location of easements and zoning district guidelines. Therefore, you’ll need to find out which zoning your lot falls under and talk to your local Planning, Zoning and Development municipal office to find out how the use of your property is regulated.
You’ll need to pay special attention to two major regulatory items, namely zoning or planning regulations and building codes. Zoning regulations dictate what type of house you can build; building codes control the details of actual construction itself. One thing to note is it’s important to plan that the house you are building will actually fit on the lot.
It can be beneficial to hire a land surveyor to identify the boundaries and any potential restrictions with your lot. For example, some lots have a right-of-way, allowing neighbouring property owners to utilize a portion of your land to access their homes. A surveyor identifies these issues beforehand so that the planned location of your new home complies with regulations.
You’ll need to develop an accurate home building budget that not only takes into consideration your finances but priorities, needs and future goals. It’s essential that you know how much it will cost to build your new home as well as the operational costs once it’s built.
Budget more than you expect. No matter how much you think the building process is likely to cost, it’s likely going to cost more. There could be any number of items that aren’t included in the estimate your builder gives you. For instance, your builder is unlikely to include costs such as electrical and gas meters, or internet and cable hookups. Items such as landscaping and outdoor concrete, fences and gates, decking and letterboxes might also not be included in the estimate. These are known as finishing costs, and could run anywhere from 15-25% of your budget. You’ll also need to take into account site costs and zoning fees, which are the costs associated with preparing your site for construction, and you may also have to pay for planning application fees.
In addition to add-ons you might not have considered, you need to budget for unforeseen circumstances. For instance, you might want the luxury of changing your mind should any of the fittings or materials not match your expectations. Keep around 10% of your budget for unexpected expenses.
A mortgage calculator can help you make an accurate estimate of what your monthly payments will be and how much you should finance. Once you have a solid estimate, you can begin shopping around for the best loan options.
You will be expected to have a larger down payment that can range anywhere between 20–30%. Your construction mortgage is then used to cover the building costs. These mortgages vary in interest rates and terms from lender to lender. There are basically two types of construction mortgages:
1. Completion mortgage.
In this case, the loan isn’t transferred until construction is complete.
2. Draw or a progress-draw mortgage.
The builder draws money in increments as the home is built. According to loanscanada.ca, this is where the homebuyer will be granted the funds from their lender in installments throughout the various stages of the build until the project is completed or close to completion. During each of these phases, the lender will send a home inspector to the property to review the building progress and make sure that everything is going according to schedule. After each visit, the inspector will submit a progress report to the lender who will grant more funds accordingly.
These loans can get complicated, so speak to a mortgage broker or your bank to discuss your options so that you make the right choice for your needs.
Planning is the most important part of the construction process. Make sure you meticulously plan the details of your house. Your personal style and taste will influence your preference for the interior layout. Do you want an open floor plan? Do you want flexible/bonus spaces? Do you need a large gourmet kitchen or pampering master suite? What direction will it face on the lot? What will the layout and flow of the rooms be? What kind of lighting will you use, and how many power outlets will you install?
There are a number of useful tools for planning out the design of your home. Sites like Floorplanner and RoomSketcher let you create mock floor plans. You can also choose an existing home design from a library of designs offered by experienced home builders.
Select a Reputable Architect and Builder
Your architect and builder will be two of your most important team members, so you’ll want to make sure they’re reputable and professional.
Your architect will help you refine your vision into an actionable blueprint. Search the Royal Architectural Institute of Canada to find a reputable architect in your area. Or even better, word of mouth is invaluable — ask around for respected architects in the area.
Your builder is your general contractor. He will submit your final plans to the city and obtain the building permits, supervise the construction of the home, handle the cost breakdown and deal with any subcontracting issues that may arise. Make sure that the builder you select is a member of the Canadian Home Builders’ Association and that they hold a license for the province where you plan to build. Always ask to see examples of homes and developments they have completed. Check out their work and references; get feedback from their clients on how they operate, and crucially, whether or not the clients are happy with the finished product.
Another Option: Being Your Own General Contractor
Hiring a builder costs money, but it certainly makes the process of building your own home easier to deal with. If you’re feeling particularly ambitious and you have time on your hands, you can choose to act as your own builder. You’ll need to manage your costs carefully, and there’s always the risk that you’ll have to deal with unscrupulous subcontractors.
The difference between hiring a contractor and being your own general contractor could mean thousands of dollars. Depending on the size of the job, there are many opportunities where you can step in and supply material or help with the grunt work to move the project along faster.
Being your own contractor means taking on the role of management to cut costs — hiring subcontractors, supplying materials and setting a timeline.
- Save Money — Avoid price mark-ups on materials and labour (could be anywhere from 15% to 30% extra). Save money by taking care of simpler projects yourself, like painting and keeping the worksite clean
- Save Time — Keep the progress of the project on track
- Complete Control — Hire subcontractors you see fit for the job
- Faulty workmanship— As you may be unskilled in a particular trade or area of the project this will affect the quality of the finish. You may also struggle to coordinate and give instructions to tradesmen that require details.
- Lack of construction knowledge— If you have zero practical skills, man management, and time management skills then this will be a problem. You need to learn the processes of what needs to happen and when.
- Timeframe — If you need the project to be completed at its earliest possible time, then a builder will be more likely to finish the project before you will be able to.
- Cost could increase— Costs will increase if you don’t plan properly and schedule the works on time. They may increase through a variety of areas. For example, if you are constantly repairing faulty work, you hire poor tradesmen, you take longer to complete the project and you probably won’t get the same discounts as builders do with suppliers.
- Tradesmen— You could find it difficult to find good reliable tradesmen rather than a builder who has established contacts.
- Accountability— No one else is accountable but you. If something goes wrong or needs fixing you will have to resolve it.
Knowing a professional builder is controlling the process for you and managing all the work could give you peace of mind.
Before the building can commence, you must obtain a building permit. These permits are the official go-ahead to break land, and are issued by your municipal Planning and Development office. The permit has a unique number on it, and the document must be clearly visible on the construction site. Typically, the builder or architect will take care of this, but if you are taking the project on yourself, it’s up to you.
When applying, you must submit all plans and designs for the work – the more complicated the designs, the longer it will take for the permit to come through. Note that applying for the permit will cost you, but there is no guarantee it will be issued. Permits tend to range in cost from $360-$1,730.
Words of caution — Municipal building inspectors can drop by the site any time. Should your permit not be displayed correctly, you will foot the bill, even if the builder or architect is the one who applied for the permit in the first place.
How Much does it Cost to Build a New House?
According to the Altus Group, the average cost (per square foot) of building a custom built single family detached home in Canada’s most popular cities is as follows.
- Vancouver $430 – $1090
- Toronto $400 – $900
- Calgary $405 – $860
- Montreal $390 – $800
- Halifax $250 – $500
How Long Does It Take to Build a House?
Time is tricky to predict as there are so many working parts. That being said, on average it takes from 10 to 16 months, assuming everything goes as planned. That doesn’t include the many issues that can arise from bad weather to lack of manpower and delays on materials, to challenges with you being able to make decisions in a timely manner.
The Construction Phases
Below is a breakdown of the main construction phases you can expect for your project:
Prepare construction site and pour the foundation
Your house is staked out and the land is prepared. Often, the topsoil is removed and piled elsewhere for later use. Excavation is done, and the footings (concrete slabs to support the foundation walls) are formed and poured. Water, electricity, telephone and cable services may be brought in at this time. The foundation walls are erected. The foundation may be insulated and damp-proofed. Drainage is installed to keep ground moisture away from the house.
Construct rough framing
Exterior walls, interior partitions and the roof are assembled. Once the house is fully framed, windows and doors are installed. The builder’s aim is to get to “lock-up” where it is closed as quickly as possible to protect the structure from the elements.
Complete rough plumbing, electrical and HVAC
The basement floor is installed. Electrical and plumbing services are roughed in, and ducting for heating, cooling and ventilation is put in place.
The exterior walls and the roof are insulated, and a vapour barrier is applied.
Interior work and finishing
Drywall is hung. Heating and cooling systems are installed, including fireplaces. Walls and ceilings are painted, flooring is laid, and kitchen and bathroom cabinets are installed. Plumbing and electrical fixtures are put in, trim is applied, and interior doors are hung.
Exterior work and finishing
Siding is applied on the outside, along with eavestroughing, and porches and decks are installed. Final lot grading is done, and the driveway and walkways are put in.
Final walkthrough with the builder
Your builder is completing the final touches and cleaning up. You will be asked to do a walk-through of your home with the builder. Any last-minute touch-ups will be done. The house keys will be handed to you on your possession date.
What about New Home Warranty?
In Ontario, according to Tarion, if you are building your own home in one of the municipalities listed below, you are required to obtain a Letter of Confirmation prior to obtaining a building permit:
|· Barrie||· Midland|
|· Belleville||· Newmarket|
|· Brampton||· Niagara Falls|
|· Collingwood||· Oakville|
|· Greater Sudbury||· Sarnia|
|· London||· Penetanguishene|
|· Markham||· Stratford|
|· Middlesex Centre||· Wasaga Beach|
The purpose of obtaining a Letter of Confirmation is to protect new home buyers from potentially entering into a contract with an illegal builder. All builders in Ontario must provide a seven year statutory warranty on every home they build. Click here to find out more about the new home warranty.
If a homeowner builds his/her own home, the home is exempt from the warranty. This means that by building your own home, you are responsible for defects in construction that may arise when building your own home. Owner-builders are not required to register with Tarion. However, before obtaining a building permit, they must receive a Letter of Confirmation from Tarion.