Custom Home Survival Guide : Building: One couple managed to build their first custom house without harm to their marriage. The key to success is having a good general contractor.

Just mention that you’re thinking of building a new house, and watch the Dear Abbys of the construction world line up to offer all manner of advice, most of it portending grave disaster. We know. It happened to us.

“One house, one marriage,” reminded one divorcee, who knew whereof she spoke. Another friend taught us the “double” theory: no matter what the experts say, you can expect to double the cost, double the time and double the trouble.

And a neighbor, addicted to reading the legal notices in small-town newspapers, remarked on the amazing coincidence between custom home completions and personal bankruptcy filings.

But nearly three years after our adventure began, we can honestly say that we survived, and perhaps more importantly, that we’d do it all over again.

In the end, and despite all the tales of horror and mounds of litigation to the contrary, we found that it is possible to build a custom house and live to offer home tours to anyone expressing even the slightest interest.

However, like other first-timers at this, we don’t for a minute pretend that we built the dream house we could have if we had known what we were doing from the outset.

“You learn on the first one. The second one is the one you get just the way you want,” said Riverside resident Judy Dunbar, echoing a common refrain among the owner-builder crowd. If there is a next time for her, Dunbar, who completed her first home four years ago, already knows what she would do differently.

“I would be more adventuresome and creative. I’d take risks,” she said. “We were too conservative, too afraid of making a mistake. We were rookies.”

Although errors, omissions and poor choices are unavoidable, building your house--or, more precisely, hiring trained professionals to do it for you--can be an exciting and ultimately rewarding project, both emotionally and, if you’re smart and lucky, financially.

In fact, the National Assn. of Home Builders reports that 360,000, or 34%, of the nearly 1.1 million homes started in 1988 were built on land already owned by the homeowner-to-be, a percentage that holds fairly steady year to year.

The association’s chief of research, Gopal Ahluwalia, estimates that about half of the homes built on the owners’ lots are custom or semi-custom houses.

Having a home built precisely to your tastes is clearly a luxury. In its most recent study, based on 1987 nationwide home sale prices, the NAHB reports that the average custom house sold for $283,000, while a semi-custom home, where a buyer is allowed to make optional additions to a basic upscale tract design, cost $145,800, and a tract house cost $110,000.

Another nationwide study that same year by the association shows that the average per-square-foot cost, including land, for a custom home was $86.68, while the cost for a semi-custom home was $63.45, and $58.55 for a tract house.

Let’s say one thing very clearly at the outset: Even beyond the cost, building your own home is not for everyone. It takes patience, the ability to make decisions and a willingness to compromise.

Mike Ashley, a custom home builder for the past 20 years in the San Fernando Valley community of Hidden Hills, has a simple three-part test he uses to screen prospective clients.

“If they can’t make a decision, if their wants greatly outstrip what they can afford and if they don’t have the time to give the project, then they aren’t the right types to build,” he said. “It’s really just about that simple.”

But even if you pass Ashley’s test, building your own home is still no cakewalk.

“The biggest sin in home building is not enough up-front planning,” said Rick Morrall, the building editor of Sunset magazine.

According to Morrall, you have to know what you want in a house, what’s available on the market, what you can afford and how all the hundreds and thousands of pieces of the project fit together.

The best place to start is with basic research.

Home remodeling and construction books, interior decorating and design magazines, and regular tours of model subdivision homes and houses on the resale market provide an excellent and inexpensive introduction to the project.

Visit building supply stores, tile showrooms, carpet emporiums and other retail outlets to see what’s available, how it’s being used and how much it costs.

And, by all means, talk to people who have done this before. They can be a valuable and experienced source of advice and recommendations on labor and materials.

Don’t be surprised if the research phase takes a year or more. Spent wisely, this period can save you valuable time and money later when the meter is running on your construction loan, your contractor is yelling for a decision on some detail or other and you’re anxious to wrap up the project.

“After construction starts is too late to begin figuring out what it is that you really want,” said Burton Fohrman, a Los Angeles attorney who has built five houses over the years, including his current home in Brentwood.

Exactly where and how you are going to build is an obvious part of your research. Consider your choices carefully; your selection will play a huge role in the outcome.

Will your lot be in a so-called “custom home” subdivision, and if so, will the project’s developer provide the basic house plans and contract for the construction labor? This is a popular choice, in part because most of the basic design decisions are made for you, leaving you with selecting just the final touches, such as the cabinets, tile and flooring. Further, this option tends to be a less expensive alternative than starting from scratch with your own architect and contractor.

However, there are important trade-offs. Generally speaking, your house will not be unique and may not contain all the features you want. Further, you may not have much choice in selecting the construction materials and supplies.

Another popular choice is to buy a lot and use a home plan provided by your contractor. Still other owner-builders purchase one of the thousands of ready-made plans available through mail order outlets and book publishers and then hire a general contractor or a series of subcontractors for the actual construction.

All are valid choices, but nevertheless, when most people think of building a custom house, they think of three separate steps: buying a lot, hiring an architect to draw them a unique set of plans and then retaining a general contractor to oversee construction.

Although this approach can give you a home custom-tailored to your family’s activities and needs, it is generally the most expensive alternative.

Figure a minimum of $10,000 to $20,000 for architectural plans and blueprints, and the fees will be higher if your architect provides inspection and oversight services during construction. Your general contractor will get a percentage of the total construction cost for his services, plus a profit, an amount that can add at least 10% to 15% of the actual costs of supplies and labor.

Of course, you can save money by acting as the general contractor yourself. It’s a somewhat risky undertaking and not usually recommended unless you’re familiar with construction work, building codes and the building trades labor pool in your area.

If you decide to work through a general contractor, choosing that person is arguably the most important decision you will make during the entire building process. And except for the most extraordinary circumstances, you will want to make your selection after soliciting bids.

But don’t be fooled into thinking you have to select the lowest bidder. Price is just one important issue you should consider; reputation and client recommendations should also be very important factors in your choice.

Interview other owners who have used the contractors you are considering and listen carefully to what they say about the highs and lows of their experiences.

Ask for a list of the subcontractors used by your prospective general contractor and then talk to these craftsmen, advises Gregory Roberson, of HMC Architects in Ontario.

Ask if they’re paid on time, how well the general contractor organizes and supervises his jobs and whether there have ever been any serious problems on a job.

These are the fellows who will be pounding the nails, pouring the concrete and installing the dry wall, so the quality of their workmanship is important to you too. If you have any questions, ask to see jobs they have completed.

Talk to each of the contractors extensively before making your selection to see if you can communicate effectively with them.

Remember, you will be entrusting this individual with a project that will cost hundreds of thousands of dollars and will probably be your single largest asset on this planet. Protect it from the outset by selecting someone you can trust and easily talk to.

Preparing your project to go to bid is an art form unto itself. Your architect can, and should, help you. But there are many things you should do for yourself too. And almost all of them require you to know what you want, and to clearly specify it in your bid package.

Which grade of insulation material and lumber, which style moldings, doors and windows, what type of plumbing fixtures, appliances and cabinets are just a few of the details you should clearly spell out to ensure that the bid you get covers the materials you want.

“There’s not a lot in a house you can’t decide in advance,” said Jeff Thompson, a Riverside contractor for the last 15 years and the contractor we chose for our project.

“All decisions have to be made at some point, so why not before you start? It makes everyone’s life so much easier.”

And if you can’t pick the bathroom tile you want in the guest powder room, the drawer pulls for the kitchen or the style of recessed lighting in the family room, put an “allowance” for these items in the contract.

Allowances are specified dollar amounts to cover various finishing touches, such as flooring, countertops, hardware and lighting that are built into the contract. As the owner makes the necessary decisions, the costs of the selections are deducted from the allowances. At the end of the project, the contractor provides a full accounting of the allowance budgets.

For example, we had $5,000 allowances for kitchen and bathroom tile, hardware, carpeting and lighting and a $10,000 allowance for hardwood flooring. We overspent the tile allowance and were billed extra for it; we underspent in a few other accounts and were given refunds.

Although allowances can be a real blessing, they carry a few risks. First, they can be abused by unscrupulous contractors. Further, they can allow owners to procrastinate on decision-making chores and then suffer potential construction delays when their selections are out of stock.

Remember, the whole purpose of a highly specific, tightly drawn bid proposal and contract is to minimize problems and unnecessary expenses once construction begins.

And this brings us to the all-important subject of cost overruns and contingency accounts.

I remember bringing up this subject with a Santa Ana woman who was in the middle of her home building project. She said she had already spent about $50,000 above and beyond the contract amount and expected the final extra charges to total $100,000, or about 20% of the contract. And she didn’t seem upset!

I chalked it off to her having too much money, not enough intelligence--or both. And I lived to regret the hasty and unfair assessment.

Although Thompson argues that an owner with a set of thoroughly researched contract specifications can complete the home building process within $5,000 of the bid, we ran about 10% over the $250,000 specified in our contract with him, a level he and other home builders say is typical.

Why?

Well, we wanted dry wall in the garage, the plans didn’t specify it and he didn’t include it in the contract. It was added.

The hot water heater had to be moved to meet the building codes, a requirement not detected until the inspector showed up. The result: an extra few thousand dollars.

A last-minute change in the driveway required additional used bricks, about $2,000 worth.

A sink was added in the garage, fans were added in the attic, a bookcase was added in the family room and a few windows were moved.

Get the picture? Individually, they were not terribly important or costly items, but they added up, and we were glad we had set aside a contingency account at the bank, and would recommend that anyone building have at least 10% above and beyond the contract amount readily available for emergencies.

Once construction begins, you should be prepared to inspect the project daily, or at least talk to your contractor by phone. This is not a time for extensive vacations or other time-consuming activities.

Many owner-builders want to participate directly in the construction phase, and they usually offer to complete one of the finishing touches, such as staining the cabinets or painting.

Sunset building editor Morrall says it’s a big mistake to tackle the project as it nears completion.

If there’s an overwhelming desire to get personally involved in the house, Morrall suggests that it be done at the beginning when the laborers are digging trenches or stringing wire or nailing wallboard. These are the steps that form the backbone of the house and are covered by the finishing touches.

“Let the pros do the stuff that shows,” Morrall advises.

As the house grows from its foundation and you begin to see your blueprints transformed into three dimensions, you will probably discover any number of reasons to tinker with the plans. Try to resist the impulse in all but the most important instances, because changes at this point are costly.

However, no matter how thorough your plans or how well you did your research, changes are inevitable. And so are problems.

As we walked through the house, for example, we found that we had not planned for enough telephone jacks and had failed to coordinate the light switching from room to room and at each doorway. The result--and our contractor still laughs about it--was a $1,000 change order from the electrician.

Once the exterior walls were framed, we could begin to see the precise views each window would have, a perspective significantly different from both viewing the house on a set of blueprints and seeing the overall panorama from the lot. As a result, we moved a window to capture a view that would have been lost.

These construction-phase walk-throughs also give you a good sense of what light you will have in your house and how strong that light will be at different times of the year. Maybe you will need to add some awnings or other “instant shade” such as a patio cover. Or maybe you will need to add windows.

The point is that unless you visit the house regularly and inspect it carefully and critically, you can lose prime opportunities to make important adjustments and spot potential and actual problems.

Besides construction problems, you can expect a few surprises too.

Contractors run into granite boulders while bulldozing; subcontractors quit in mid-job; suppliers can’t deliver materials; the blueprints that were presumably drawn by a professional architect and checked by a local government planning official suddenly “don’t work.”

No matter what happens, the bottom line is that it will cost the homeowner extra money, either directly in cold, hard cash or indirectly, because the project is delayed and your construction loan is still outstanding.

“The process is frustrating to a perfectionist because things don’t always work out,” said Rosemary Rodriguez, a San Clemente real estate broker who has built four houses and remodeled five others. “You have to be easygoing about it or you’ll have a nervous breakdown.”