If you want to save money on your building project in Ghana this list might help. Saving money on building project is every prospective home owner’s dream.
Some of the ideas you will learn in this article are:
1. Choosing The Right Location
Secondly, every house is part of a neighborhood. So the neighborhood where you will build your home will have an important effect on its permanent value and re-saleability and upon your family’s enjoyment of “home.”
Neighborhoods change. Try to build in one that shows no signs of deterioration, that seems to be on the upgrade or at least static. Avoid neighborhoods that are unrestricted or zoned to permit businesses or industries to enter.
Seek to locate in a neighborhood that has a good street plan restricted to local traffic; that has also good schools, parks, and playgrounds, a pleasant view of some other attractive natural feature. This will help you save money in the long run
Avoid lots located on roads with fast, heavy traffic.
2. Choosing The Right Neighbourhood
Thirdly,neighbors are important to a neighborhood too.
This makes the adjustment to a new neighborhood easier and pleasanter if you already have a few friends there to help you get acquainted.
Do the majority of your future neighbors look like people you would like to live near?
Are they more or less in the same general economic or earning class as yourself?
There are many exceptions, of course, but generally speaking, a neighborhood that is fairly homogenious both as to type and cost of homes and type of residents is most inclined to be stable.
Do the residents seem to have a pride of ownership? The way they keep up their houses and grounds and perhaps the existence of an active civic association will help you decide.
This isn’t snobbery. It’s self-protection, for what your neighbors do with their property inevitably affects the value of your home.
3. Assessing The Nature of Your Building Plot
Having determined a satisfactory neighborhood, the next step is to weigh the advantages and disadvantages of the available building plots.
Consider each plot in the light of the type of house you want to build on it. The smaller the lot, the more restricted you are in your house design.
A sloping lot may involve expensive grading or a two-level custom design to take advantage of the existing contours.
A rambling ranch house or Cape Cod requires a larger plot than does a more compact two-story plan.
Avoid filled land that may settle, causing the house to settle with it.
Avoid wet, low-lying lots.
A good time to inspect sites is during or after a heavy rain. Rock out-croppings may indicate the need for extensive rock excavation—a costly process.
If you have any doubts, a test pit to ascertain the true underground condition is recommended. Good trees that don’t fall within the house area are assets.
5. Know The Zoning Regulations
Check the town or city zoning ordinance. Zoning has the weight of law behind it.
It is the means whereby the use to which an owner may put his property is limited, in certain specified instances, for the welfare and protection of the community as a whole.
A residential neighborhood protected by zoning will prove safer and more stable than an unprotected neighborhood.
Build your home in a residential zone, restricted against the business (except local convenience shopping center) and against the industry.
Zoning ordinances usually also establish required minimum plot areas as well as the proportion of the plot that may be covered by the house.
They establish required setbacks; i.e., how far your house must stand from the street, from plot sidelines, and possibly from the rear line.
What is left within setback lines is the area you may build on. Make sure the house of your choice will fit within it.
6. Check The Restrictions Of Use in The Property Deed
Restrictions on property use may also be written into deeds. They need not be set forth in full in your deed.
Previous owners impose it to control the character of his development.
This may restrict future owners.
Some deed restrictions run “forever.” Others more wisely expire after a specified term of years but beware of the property where deed restrictions are about to expire.
If the deed offered you contain an innocent-sounding phrase, “subject to restrictions imposed in earlier deeds,” stop everything until you find out exactly what those restrictions are.
They may restrict your property more highly than the zoning ordinance does and may prevent your building as you wish.
Deed restrictions may be more severe than zoning limitations on
They cannot weaken nor subtract from zoning limitations.
7. Get to Know the Buidling Code Of The Community
Building codes, by means of which the community exercises more or less control over types of materials and methods of construction, are in effect in most large cities and towns and in many small ones as well.
Codes are enforced by the municipal building department.
Usually, plans of a house must be filed with the building department and a permit obtained before construction may begin.
Codes vary greatly from town to town. It is highly advisable to find out in advance of letting a contract whether any particular materials, such as non-fire resistant roofings for instance, are
prohibited in your neighborhood.
If you build in an area where a code exists you must conform to its requirements. For that reason, your agreement with a builder should contain the condition that he obtain all necessary permits and that he build in accordance with the requirements of all codes that have jurisdiction.
8. Check The Availability of Adequately Services
Be sure that electricity and water are available to the lot, and, if possible, sewers, gas, and telephone as well.
Electricity and water are vital, the latter for fire protection and for low suburban insurance rates as well as for domestic purposes.
Look for a fire hydrant within five hundred feet of any lot you consider.
Many fine homes are built in areas that do not have sewers. But private sewage disposal plants (septic tank and drain field) add to the cost of building and they need space to operate efficiently.
They are not recommended for closely built-up neighborhoods of small building plots.
Check the depth of the sewer. Do this at the town or city engineer’s office, especially if the lot you are considering slopes down from the street.
Your house drain exit must be above the level of the street sewer.
9. Be Aware of Access Roads
The type of street improvements will vary greatly from one neighborhood to the next.
The improvements should conform to the neighborhood.
Early land developers often scraped out dirt roads, installed cement sidewalks and called their lots “improved.”
A serviceable all-weather pavement has been made necessary by the universal use of the automobile.
The road width should be not less than 50 ft. on the map.
A satisfactory paving width is 18 or 20 ft.
One of the most important facts to check is whether the streets are public roads, dedicated to and accepted by the municipality.
The great danger of private streets is the question
of repair and maintenance.
Who will keep them in condition once the developer has sold all his lots?
Furthermore, a private road seldom receives municipal services such as ash and garbage collection, snow removal, etc.
10. Know the Status of Neighbourhood Utilities
Even if the street is a public road with all improvements
actually installed, it is wise to check at the tax office to make
certain that they are paid for.
Frequently, to ease the burden on property owners, payment is spread over a term of years and collected annually like taxes.
The unpaid installments remain liens against the property until paid.
One risk when buying a plot in a neighborhood without sewers (or other municipal improvements) is that they may be installed at some future time, either as the result of petition by a majority of property owners or by order of health authorities.
In most communities the cost is assessed against all the
lots, vacant or improved, that benefit.
Even if you do not connect to the sewer, a pro-rata share is assessed against your property.
It is wise, therefore, not only to check for any unpaid assessments for improvements already installed but also on the
likelihood of any new assessable improvements being started
within the foreseeable future.
11. Plan the Timing of Your Building Project Properly
When you start to build may have a very considerable effect upon cost.
Everyone knows that building costs fluctuate. Since World War II the trend has been constantly upward.
The popular expectation of a drastic post-war fall in building
costs failed to develop.
Many housing experts and economists now hold the opinion that, short of a substantial depression, there is little likelihood of any early reversal of the upward trend.
Another, and more controllable factor of timing affects building cost. Bad weather conditions may increase the cost of building by slowing up the rate of construction.
In the North, for instance, more people start to build in spring or early summer than in the autumn, on the theory that the house will be finished before winter delays the work.
But because more people start in the spring, that is the busy time of the year for the industry.
You might get a better bid by starting in the fall, when your
builder’s work is beginning to slack off.
If the house can be enclosed and roofed before bad weather,
inside work can proceed smoothly through the winter.
12. Plan Your Home Building Budget Critically
How much money can you afford to spend on your home?
That is perhaps the most perplexing problem of homebuilding.
Generally speaking, it is better to build too little than too much house.
You want the new home to prove a source of happiness and contentment.
There is no surer way of causing the dreamhouse to turn into a nightmare than to bite off more than you can chew.
The mortgage banker is an excellent source of expert advice.
His opinions of what is sound, what is unwise, are based on the experiences of thousands of families like your own.
There are two generally held beliefs.
First, a family should not spend for a house more than two and one-half times its annual income.
Thus $12,500. is just about tops for a family making $5,000.
Second, the total carrying costs of the house (interest, taxes, insurance, and amortization of mortgage) should not exceed twenty-five percent of family income.
13. Know the Total Cost Of The Building Project
Anticipate and add up every cost item involved in building.
It is not enough merely to add the cost of the house to the cost of the lot and say, “that’s it.”
There are other items of the expense involved in building and often when these are not anticipated budgets are thrown out of gear.
While the individual items are not large they do add up to a considerable total.You may not have to pay for all of the following but make sure which ones you will have to pay and how much they come to:
- Title search or guaranty policy
- Attorney’s fees
- House connections to utilities
- Recording of deed and mortgage
- Revenue stamps on bond
- Mortgage tax
- Plot survey Appraisal fee
- Cost of blueprints
- Special assessments for street improvements
- Driveway and walks
14. Borrow Wisely For Your Home Building Project
In the past it was considered something of a family disgrace to have a mortgage
on the homestead.
Now it is a rare house that is held “free and clear.”
Modern mortgage financing has made us a nation of home owners but the fact still remains that a mortgage is a debt.
If we remember this we will be more apt to apply to our mortgage borrowing the same sound rules of common sense that we apply to other debts.
We won’t borrow more than we need just because we might be able to get it.
We’ll pay off the borrowed money as fast as possible to keep our interest cost down.
There are several sources of mortgage money; among them,
- Building and loan associations,
- Federal savings and loan associations,
- Mortgage companies and insurance companies.
It pays to shop around for mortgage money just as it pays to shop for anything else.
Some lenders charge more fees of one kind or another than others.
Some will make loans at lower rates or for longer periods of time.
In every case find out exactly how much money you will get after all fees and expenses are deducted from the amount of the loan.
The mortgage that calls for a fixed monthly installment is now preferred by most families.
Out of this single monthly payment, the lender takes care of interest, taxes and insurance, and credits the remainder toward reduction of the principal.
The monthly payment is calculated to pay the mortgage off in full usually in twelve, fifteen or twenty years.
Naturally, the larger the monthly payment, the shorter is the term of the mortgage for there is more left over after payment of the
15. Understand Clearly The Complexities Of Using A Building Loan
A building loan or construction loan is a device by which money is advanced as construction proceeds toward completion, at which time it is supplanted by or merged into the permanent bond and mortgage.
Usually, the building loan agreement and the subsequent bond and mortgage papers are signed simultaneously, for building loan advances are almost invariably made only by the lender who will hold the final mortgage on the completed house.
In effect, the building loan agreement mortgages the entire property to the extent of the advanced amount actually made.
At no time will the advances amount to the total value of the work actually done.
The agreement will contain every possible clause to protect the lender, for the reason that advancing money on a construction job is much riskier than lending on the security of a finished house.
The lender strives to keep himself always in the position where he may, if the builder falls down, complete the job within the limits of the permanent mortgage.
Not all lending institutions make building loans.
If you are not able to finance progress payments to your builder (or if he will not finance the job for you until completion, when
a permanent mortgage may be placed) your problem is to find a lender who will make building loans.
16. Do Critical Accounting with Your Builder
You need not worry about avoiding mechanic’s liens if you build under a construction loan agreement.
The lender will take all necessary precautions. (See building tip No. 15)
But, if you are financing construction until completion, you should be as careful as a lender would be. The law seeks to protect the workman, the sub-contractor, and the supplier of materials.
Even if you make full payment to your builder, mechanic’s liens may be filed against your property by anyone who rendered services or supplied materials which the builder failed to pay for.
Before you make partial payments to the builder he should furnish you with receipts or ‘releases from liens’ from his subcontractors totaling at least the amount of your partial
And before you make your final payment he should furnish receipts from all subcontractors as well as evidence that he has met
his own labor payrolls.
You are justified in withholding payments if your builder fails to pay sub-contractors for either labor or materials, if any claims against him are filed, if defective work is not promptly
remedied, or if at any time there develops doubt that the house can be finished for the amount of the unpaid portion of the contract price.
17. Before You Sign A Purchasing Agreement
Before you sign a purchase agreement for a building lot make sure you have satisfied yourself on Building Tips Nos. 1 to 10 inclusive, and it is suggested that you re-read them.
Before you sign is also the time to consult your attorney for legal advice.
A verbal assurance by a broker or salesman that is not incorporated in the written contract is valueless.
The purchase agreement is presumed to be complete; to represent the full ‘meeting of the minds’ of seller and buyer, and the seller may enforce fulfillment by you if he does only Hide things that he agrees to do in the written agreement.
Whereas verbal contracts may be enforceable in many lines of business, the real estate laws of most states specify that contracts for real estate are enforceable only when reduced to writing.
The purchase agreement should recite not only price but exactly how it will be paid, when and where the title will be passed and by what type of deed; it should define the property exactly; it should specify existing restrictions and easements.
Any unspecified condition that makes it impossible for the seller to deliver a “good and marketable title” gives you good cause for rejecting the deed.
18. Secure The Correct Title Deed
The deed is the instrument by which title actually passes from seller to buyer, usually thirty or more days after the signing of the purchase agreement.
There are four major types of deeds:
- Quit claim deed
- Bargain and sale deed
- Bargain and sale with covenants against grantor’s acts
- Full covenant and warranty deed
The full covenant and warranty deed are best from the buyer’s standpoint, but the bargain and sale deed with covenants against grantors acts is becoming accepted, especially in purchases from responsible subdividers to whom a title company has insured the title.
(See Building Tip No. 19.) Avoid types 1 and 2.
The former is usually used only to transfer a questionable title or to correct an error in an earlier deed; neither contain any possibility of redress against the seller.
The type of deed should be stated in the purchase agreement.
Record your deed immediately at the County Clerk’s office.
Recording the deed constitutes the filing of the public notice that ownership has changed.
19. Do a Title Search Of The Property You Are Buying
The period of thirty or more days between the signing of the purchase agreement and the delivery of the deed is chiefly to permit the purchaser to satisfy himself, by a search of the
public records, that the seller has a ‘good and marketable title to the land in question.
This is the time to pay a reasonable fee for expert advice.
Sometimes, title companies will search the records for you and when satisfied that the seller has good title to the property, will issue an insurance policy guarantying to indemnify you up to the amount of the purchase price only, if any flaw ever develops.In the first case you get an abstract of title plus insurance.
Otherwise, your attorney will search the records and give you an “abstract of title.”In this case, you rely upon the knowledge, experience, and care of the attorney.
Never fail to have the title searched.
Title flaws may exist in the property of a perfectly honest seller who may not even know of the flaws till your search shows them up.
Clearing such flaws is often a difficult and expensive process; sometimes impossible. Always have the title searched or insured!
20. Get a Professional Surveyor to Document Your Land Legally
A physical survey of your building plot by a licensed land surveyor costs little and may save you much.
The surveyor will actually mark out the corners of your plot by
sinking iron pipes or preferably concrete markers.
These are permanent. Do not settle for wooden stakes that get pulled out or rot away.
The surveyor will also give you a blueprint of your property, showing every angle and dimension.
It will show whether a neighbor’s fence or driveway infringes on your property.
It should also show the location of good trees and any outcroppings of rock, the utility lines to which your house will connect, and, if the plot is not level, surface contour lines that will be of great help in placing the house so as to avoid
excessive terracing or grading.
If you build on another man’s property you are just out of luck.
What you build belongs to him. It has happened more often than you think!
If your neighbor’s driveway remains unchallenged on your property, he acquires “squatter’s rights” to it after a term of years.
21. Research Your Prospective Building Company Thoroughly
Choosing the builder who will erect your home for you is one of the most difficult and critical steps that confront the prospective homeowner.
The whole success of your thrilling adventure into homeownership depends upon picking a builder with technical “know-how”; with the experience, integrity, and financial resources that will ensure satisfactory performance.
To prospective home builders who come into the offices of the House-of-the-Month seeking advice, we give several practical suggestions.
- Ask the leading lumber yard in your town for the names of several recommended builders. Inasmuch as the yard usually extends considerable credit to builders as the jobs progress, they will not suggest any fly-by-night operators.
Every yard in your area knows who are the good builders, who are the mediocre ones, and which ones shouldn’t be in the business at all.
- Ask the mortgage lending institutions the same question. You may be surprised how much information they will have as to the type of work of the various builders. Why? Because they have probably made loans on houses built by all of them.
The mortgage lender is also in a position to check their financial responsibility.
- Also, inspect both past and present jobs of the several builders to whom you have been recommended.
Finally, ask the owners living in houses that were finished several years ago. Several years allow plenty of time for the results of poor workmanship to show up.
When inspecting jobs under construction, size up things for yourself.
Do the workmen seem careful and interested?
Is the material awaiting use protected against the weather?
Is there evidence of excessive waste?
Having signed an agreement with a builder, give him a chance.
Your home is the adventure of a lifetime to you. To him it’s routine business.
Don’t bother him with phone calls every day. Delays cost contractors more than they do you. He can’t control the weather.
Make complaints to him personally, not to sub-contractors or workmen.
Visit the job, especially if you have a large group of admiring friends with you, after hours or on Sunday, so as not to interfere with the work.
Avoid ‘extras’! Get everything in the original contract. Some builders bid low on the original job hoping to ‘sell’ a lot of profitable extras.
If you do authorize an extra agree on the price in writing.
And never pay him the full value of the work done;
Hold back at least 40 percent to complete the job with another contractor if need be.
22. Consider Doing It Yourself Where Possible
Should you attempt to build your own home with your own hands without the benefit of a professional builder?
It’s a tough question to answer! Half of the homes under construction have some owner-labor going into them.
It is an excellent way to save money on your building project in Ghana.
Many factors enter into the decision include;
- the amount of free time at your disposal,
- how handy you may be with tools of any sort,
- how much help you may get from experienced friends or relatives.
Some of the activities you may safely undertake are: excavation, foundation, application of exterior walls, interior partitions, and finishing, roofing (after the roof rafters are in place.)
Where the average owner is wise to take experienced help is in: erection of the structural frame including roof rafters, electrical work, plumbing, and heating.
Naturally the particular skills of the owner-builder will vary the above-average pattern.
Do you have any tips that helped you save money on your home building project? Please share them if you do.
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