There’s an old real estate saying “location, location, location,” and it’s timelessly true. Land comes in many locations, from rural acreages to waterfront properties and subdivision lots in planned communities. Often, homeowners purchase a ready-built home, constructed on land supplied by a builder or developer. The home may be complete and ready to move in, or may be planned for construction with customization and option selections offered by the builder.
However, buying a subdivision home isn’t for everyone. Maybe you already have property in mind, or are looking to build a house on your own land. You may already own the land and need someone to build on your lot. Or you may be looking for information on the process of how to build a house on your own lot and finding builders that build on your land, not just on lots already owned by the builder.
Whatever your situation, working through the home building process should always be a team approach, and the best results come from having the best members on your team. At SK Builders, we have over two decades of experience in building homes in South Carolina, and specialize in building on your own land. We construct homes literally from the ground up, with one construction step sequentially following another. Planning a home follows a step-by-step process as well, and the planning stage is equally important to bring your dream home vision to reality as is the physical construction.
At SK Builders and McAlister Realty, we work with you at every stage of the process. That includes helping to find the right land to build your home, choosing your floor plan, customizing your home, acquiring financing, writing contracts, understanding the building timeline and assisting in many of the small but vital steps in between.
By choosing SK Builders to build a house on your land, you get all the benefits of volume building including better price, easier selections and faster build time, plus the benefits of custom building such as flexibility, customization and attentive service. We deliver the best of both worlds so you never have to compromise when making your vision of a dream home a reality.
With over 20 years of experience, we have put together our top tips and guide to our process of having a home built on your own land.
Many factors enter your land selection equation. Location, size and price are the biggest considerations. The slope of the land is vital. That can be a back-to-front slope or side-to-side and will determine the design of at least the foundation outside of the floor plan or façade. Your home’s situation to nature’s elements is also important. This includes sun pattern, shading, windbreaks and watercourses.
Here are additional factors to consider when selecting the right land.
Due diligence is a common term in any business transaction and it’s vital to do your homework in selecting a lot to build your house on. The following resources are helpful and necessary to avoiding any surprises:
The more due diligence you do in selecting your land, the more assured you’ll be in making the right choice. The same applies to selecting your builder. The right builder can also help walk you through this process as well.
Not every contractor will build a house on your land, also referred to as “Build on Your Lot” or “BOYL”. Some builders, usually small volume constructors, specialize in custom homes and exclusively build only on owner-held land while other builders will only construct on lots supplied by them as part of a package.
At SK Builders, we are able to accommodate more customization than a regular production builder. This allows us to work with you in building a home to your specific needs while maintaining enough volume to generate greater buying power than most custom builders are able to offer. This provides the best of both worlds especially if you want some customization but without the higher fully custom price tag.
Our process includes weekly updates on building progress to keep you informed. We also make sure to review all details thoroughly with you during the initial planning phase to help avoid costly change orders later in the process, especially during the construction phase when they can cost more money and have a bigger impact on the schedule.
Here are some additional questions to consider when selecting a builder:
If you conduct due diligence on your prospective builder and they prove positive to these questions, you can be assured the builder will be the right fit to build on your land.
Once you have your lot picked out (and purchased, unless you’re going to handle the property and the construction loan in one closing), contact SK Builders and McAlister Realty to plan next steps. In this phase, discussions will take place regarding the following
Once you have selected your lot, finalized your plans, selected your customization and options then the next step in the building process is acquiring the right financing.
Working out an accurate budget that can be transferred through to a guaranteed price is a time-consuming venture and it a vital part of having a home built on your own lot. The budgeting phase starts with the base price of the home, and then adds on upgrades and custom features.
Allowances are usually made for certain parts of the construction process, such as flooring, lighting and cabinetry, which allow the client sufficient time to shop and decide on the visual aspects of their home’s interior during the construction phase. These are set as cash allowances so that if the client makes the conscious decision to upgrade during the process, then the additional charges are billed as part of the construction phase.
We also make allowances for areas of construction that cannot be accurately projected, such as excavation and site work. These may include the water and sewage systems, utility connections and even driveways and landscaping. Preparing for these unknown costs is a vital part of the building process, and there should always be a contingency budget set aside for cost overruns and additional expenses. We recommend setting aside at least ten percent of the budget for unforeseen expenses.
Construction financing is different from conventional mortgage financing, and not all banks provide construction loans. In a case where SK Builders builds on your land, you are required to obtain title to the property and retain it while construction takes place. Financing for the purchase of your land and paying for construction is done in progressive stages, or “progress draws,” which are advanced by the bank according to milestones where the value of works is in place. This can be at the foundation stage, the “lock-up” stage, the drywall stage and the final completion stage.
During a construction loan, payments are made as interest only and nothing is put towards the principal until completion of construction, an occupancy certificate is issued and the loan is converted into a regular mortgage, whether it be Conventional, FHA or USDA programs.
Usually, a banker wants to see what contract is being used for before approving funding for a home construction and land purchase home. Contracts are the documents that tie the building process together and are critical components of construction.
SK Builders and McAlister Realty work with several approved financial institutes in the Greenville, SC, area and we are able to assist with understanding what financial arrangements are available and how they apply to the process of building a home on your land.
We are proud to recommend the following approved financial institutions:
Park Sterling Bank (Featured Bank)
Contact: James Anderson
Address: 607 E. McBee Avenue, Suite 101, Greenville, SC 29601
Phone: (864) 603-5036
Fax: (864) 316-4038
First Piedmont Federal
Contact: Tim Smith
Address: 1510 John B. White Sr. Blvd, Spartanburg, SC 29301
Phone: (864) 576-4466
Contact: Sue Gaines
Address: 3501 Pelham Road, St 201, Greenville, SC 29615
Direct: (864) 331-2226
Office: (864) 234-5626
Will I need two closings?
Generally, you’ll just need one closing (with modification), however the two-time close option is also available when it makes sense. Park Sterling Bank only charges fees once either way.
What does "one closing with modification" mean?
The original Note and Mortgage survive the completion of the home, we just modify the terms after completion. Which means that your construction loan will be modified into a permanent loan of your choosing.
Is there a restriction on what kind of permanent loan I can acquire?
You can use any permanent loan product you qualify for—the most popular are Conventional, FHA and USDA programs.
What kind of payments will I be making during construction? How will they change as construction proceeds?
As the home is being built we advance money based on how much work has been completed, and the buyer makes interest-only payments. These payments start out small and grow as the home is being completed. The largest interest payment will be at the end when the home is closer to completion.
How much of a down payment will I need?
Park Sterling Bank requires a 10% down payment in the form of land equity or cash.
Using the equity in my lot as down payment—how does that work?
You give the land as collateral. If that value meets the 10% required, no additional down payment is needed.
Do I need a really high credit score to qualify for a construction loan?
The minimum score required is 680. Park Sterling Bank prefers 720.
Do I need insurance on the home during construction?
SK carries the required coverages during construction, and the buyer gets their own policy once the home is complete.
Do I approve each draw, or is that handled between the builder and the bank?
Each draw must be approved by the buyer and conform to the lender’s progress inspection report.
What is the timeline for financing? How long does it take to get the building permit?
Most homeowners should anticipate 45 days for financing, which is included within the 8 month complete build process. After the construction loan has closed following this 45 day period, SK Builders will apply for the building permit. It generally only takes 1 to 3 days to receive the building permit. This leaves approximately 6 months for construction.
By discussing and planning these elements during the site walk, it saves time and money when it comes to actually beginning construction.
The most exciting part of building on your own lot for any customer is the dreaming and designing phase. This starts by first choosing your floorplan and then building your design requests and specifications from there.
At SK Builders we offer a huge selection of unique floor plans to choose from and we work with our clients to ensure they get everything they need in a custom home, even when we are building a custom home on your own land. We have over 70 floor plans available, which we’re able to modify to suit your particular needs and location. Even better, we usually are able to show you a wide variety of completed homes featuring our floor plans by touring already built SK Builder homes that are for sale.
We’re happy to discuss special customizations, additions and changes that will make any of our floor plans into a custom home that’s truly yours.
The next step is to make sure your floor plan suits your particular lot. This may require designing the foundation to suit the slope of the lot, changing window locations to allow more sunlight, adding a porch, building a garage or even building an existing plan in “reverse” to make it work on your land.
Once the building plans are selected and customized to your preferences and to work with your land, the next step in the building process is to customize the features and options available from SK Builders to truly make your home your own.
With our twenty-plus years of experience building homes in Greenville, South Carolina and beyond, SK Builders has a well-earned reputation for expert craftsmanship, customer service and overall value.
A great deal of that value is in the standard features SK Builders offers to clients, which often are usually considered upgrades with other builders.
Some of the standard features in an SK home include:
For a list of additional included features, check out our standard features page.
SK Builders provides you with custom upgrades when we build a home on your land. There are no hidden surprises. We agree on all costs for customization and upgrades ahead of time, and guarantee the pricing. Some of the custom upgrades you may choose from include:
A full list of available upgrades can be found here.
When building on your own land, there may also be additional costs associated with a specific lot. We outline these during our initial walk through so you know these costs up front. These can include the following:
Building a home building follows a specific step-by-step process however most of the phases overlap each other. In order to understand how we’ll build your home and the time it will take, here is a general outline of what to expect:
Total Timeline: The complete process is 8 months with a 60-day builder extension. This adds a time buffer for unexpected delays such as weather, labor shortages, supply delays, and any change orders.
The team of SK Builders and McAlister Realty have collaborated to make the construction process as smooth and efficient as possible, whether you need help with finding the lot, or building a home on your own land. With an in-depth understanding of residential construction, our team can anticipate your concerns at every point during the process.
If you are looking to build or buy a home in the upstate South Carolina area, contact us today and we’ll be happy to answer any questions you have about building on your own land and making your home dreams a reality.