The Process of Building Your New Custom Home with Landsted

Good communication and realistic expectations are essential for a rewarding home building process. Please feel free to ask us to restate anything you do not understand. Much communication will be done by phone, fax and e-mail. It will help the process if you have access to a fax machine and/or e-mail.

TAKE THE TIME

Custom homes demand a significant time commitment on the part of the customer as well as the builder. Allotting enough time on your project up-front to get familiar with the products we are using and the features of your new home will pay big dividends in years to come. There are meetings with the designer, interior designer, kitchen designer, appliance and light vendors, job superintendents, lenders, etc. Planning enough time will make your home building process more enjoyable and rewarding.

FINANCING

There are a number of ways to finance your new home. Feel free to ask us about the possibilities. We can recommend several financial institutions if you do not already have one. Some institutions are well equipped to handle construction and permanent financing. Others are not (Also see #6 in the section labeled Common Questions About Building a New Home).

• Note: Landsted does not include the cost of financing during construction in the contract unless agreed to in writing.

ALLOWANCES

Items such as floor coverings, light fixtures, appliances, wells, septic systems, site work and landscaping are difficult to calculate exactly. Because of this, your contract price will include some “allowances”. We will reference one of our model homes in calculating your allowances. For instance, if a model home that you visited has carpet that sells for $27.00 per yard, our estimator will use $27.00 per yard in calculating your carpet allowance. That way, you are able to see the quality of the product we are including in your contract price.

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When building a custom home, it is inevitable that a few changes will be made. Changes are documented on attachments to the contract called “change orders". Any changes to the original contract specifications and/or reconciliation’s to allowance amounts are written on a change order form and signed by both parties. This way, both the customer and Landsted are always aware of the bottom line. We charge a nominal change order fee for changes made to plans and specs following the frame-start of your home.

• Note: It is important to remember that changes not only affect the price, but also the schedule. Please read your contract, specifications and change orders carefully. These documents are the final authority on what is or is not included in your new home.

DELAYS

Delays in construction can occur due to the following: delays in the selection process, slow processing of payments by the bank, design and specification changes, material backorders, building permit requirements, labor shortages, weather conditions, etc. We constantly monitor every home under construction to keep delays from occurring if possible. Please help us keep your home on schedule.

THE NATURE OF CONSTRUCTION

The construction of your home is scheduled. There may be times during the building process when there is no activity at your site. We may be waiting for materials to arrive, or it’s possible that a trade contractor is completed with his work and waiting for an inspection before the next trade contractor is even scheduled to arrive. Be assured that your home is being monitored and that it will be completed in a timely manner. Remember, it is to our advantage too to complete your project in a timely manner.

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It’s exciting to see a new home take shape. We understand that our customers generally like to visit the site and don’t discourage them from doing so. However, since the workers on site may not understand the full scope of the project, it is important that you direct questions and concerns to your Landsted job superintendent. Your job superintendent is responsible for your project; therefore, he or she needs to direct the on-site personnel. You will be provided with all the necessary phone numbers to stay in touch with us throughout the process.

Since the job site can be a dangerous place to visit, we recommend that children not accompany you when work is being performed. Be particularly cautious around stairways and openings. Temporary guardrails and handrails are for workers’ protection and not designed to the building codes prescription for occupancy. It can be slippery, particularly when it is wet out. Stay away from heaters and electrical connections. We make every attempt to keep the job sites safe, but, remember, this is a construction zone. Please be careful! It is not recommended to take pets to the construction site.

PRE-CLOSING LOCK-OUT

Following the pre-closing review meeting with clients, during which the final site allowances are reconciled, your project will enter the pre-closing tune-up period. During these last days and weeks before closing, our trade partners and closing team are working on the final details and finishing touches necessary before presenting you with a completed product at the customer walk-through presentation just prior to closing on your new home. During this short period we ask that clients not visit the jobsite. It is very important that we have complete control over access to the project during this critical period. This allows us to finish our work in an organized and systematic manner and exceed customer’s expectations by “wowing” them with the final product.

QUALITY

Landsted has a longstanding reputation as a quality customer homebuilder. We make every effort to achieve the highest quality by utilizing the finest products and craftsmen in our market. We can assure you that your home will be built to the same standards displayed in our model homes. Please visit our model homes to inspect our materials and craftsmanship.

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1. Who owns the plans?

Unless otherwise arranged, Landsted retains ownership of the plans. The customer will be supplied with a set of working drawings, but the plans may not be reused or reproduced without the written permission of Landsted.

2. How do we know we’re getting a fair price?

We recommend that our customers compare the quality and features of our models with others in the marketplace. Customers also need to compare the services that competing builders provide. Further, an appraisal will likely be conducted by the lender to assure that the home is a good value compared to similar homes in the marketplace.

REMEMBER: DESIGN + QUALITY + SERVICE = PRICE

3. Will Landsted work with my architect?

Yes. However, if budget is an issue, we recommend that Landsted begin dialogue with your architect early in the design process. Years of experience have taught us that design done apart from cost analysis almost always results in a plan that far exceeds the budget.

4. Will Landsted competitively “bid” my plans?

Usually not. Bidding is very common in commercial construction where the specifications are very consistent. Specifications and quality levels vary widely in residential construction. Again, experience has taught us that bidding rarely, if ever, produces an “apples to apples” comparison.

5. How long will it take to build my home?

Every home, site and customer is different. It simply takes a certain amount of time to complete each of the tasks in designing and building a new home. Our intention is to build the home as quickly as possible while maintaining quality. Once all decisions have been made a preliminary schedule for your home is generated, and a final one is generated once the home is closed in.

6. How will my new home be financed during construction?

Every customer has a different financial situation. Some customers pay cash, while others use some form of financing. If the home is being financed, most people find that a construction/permanent loan works best. This type of funding pays for the home as it’s being built through periodical “draws”. Landsted operates on a retainer plus monthly draw process. At the contract signing, we receive a retainer as compensation for design, bidding, asset allocation, and mobilization. Thereafter, at the end of each month the lender is invoiced for the amount of work completed that month. The lender typically inspects the home and forwards the appropriate amount to Landsted, who in turn pays each supplier and trade contractor by the 10th of the following month. Lien waivers are collected for each payment and are returned to the lender. By the time the home is completed, approximately 85% of the total contract amount will have been paid out. The balance is paid after the final walk-through. At that time, the construction/permanent loan simply converts into the long-term loan. The value of this type of loan is that there is one closing and one set of closing costs. In most cases, the customer pays interest monthly based on the amount of the loan that has been drawn from the lender. Because this is a home loan, the interest will likely be tax deductible. (Since each case is unique, we advise that you check with your tax advisor as to the deductibility of loan interest paid).

7. Do I need a real estate agent to buy a new home?

Landsted, LLC, is a real estate brokerage as well as a builder. If you have a real estate agent working with you when you contact Landsted, please let us know. We need to make sure that real estate agency guidelines are followed. If you don’t have a real estate agent, our staff will be able to assist you with the necessary documentation. The price of your home will be the same whether or not you have a real estate agent.

8. Can I do some of the work or provide some of the materials myself?

One of the advantages in purchasing a home from Landsted is that you will receive a completed home with a full warranty. Products and services supplied to the job outside of the contract are generally not warranted (see your Limited Warranty for more information). For our customer’s convenience, Landsted has made the investment to have virtually all of the products and services required to build a new home available in one location. Plus, the purchasing power we enjoy assures our customers that the products used in their home are provided at the best possible price. In addition, each home is scheduled to be built as quickly as possible. If the schedule is delayed by forces beyond our control, the closing date will likely be extended. The bottom line: it’s unlikely that you’ll save money by supplying your own labor or materials.

CONCLUSION

Whether you are currently building your home with us or are considering the possibility, we offer our sincere thanks. We are more than simply homebuilders; we are also homeowners, and as such appreciate the importance of making the right decision on this, your largest single purchase. This is a decision made on trust. It is through customers like you that we can pursue our passion of providing a clearly superior product through design, craftsmanship, and process. We will never take your trust lightly.

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