Construction Loans for Homes

Finding construction loans for homes is not as easy as finding a regular home loan. This is because you are borrowing money for something that doesn’t exist yet. To find the right loan program you will need to shop around, and ask many potential lenders a lot of questions about loan terms, rates, and requirements.

After you find a lender that offers construction loans for homes it is a good idea to start the pre-approval process. This process is a short handed version of what you will need to go through to get officially approved for a construction loan. This process will usually involve the lender asking you questions about your credit history, your FICO score, what type of collateral you have, and what type of property you plan on building. The lender will then use this information to determine if you qualify for any of their loan programs. If you are pre-approved for a construction loan then the lender will give you a dollar range of what you are qualified to borrow for your project. They will also tell you what interest rates and terms are attached to the loan programs that you qualify for. You can then use this information to find a property, architect, and contractor. However, to actually get the money from a construction loan the information that you provided to the lender will need to be verified. This is the qualification process.

If you are interested in construction loans for homes for a commercial project then you will need to look for a lender that offers real estate development loans. These loans are specially designed for providing real estate developers with the capital needed to complete their real estate projects. The benefits of these loan types are that they offer flexible terms and rates. The drawbacks of these loan types are that they are difficult to find, they can take a long time to put together, and they may require a large amount of collateral to qualify for one.

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Home Buyer Beware - Who's Watching the Construction of Your Home?

In 2005, over 1.2 million new single family homes were built and sold in the U.S. That’s new houses being built by thousands of large and small contractors. And the number one complaint is that the quality of the work was less than satisfactory.

In fact, if you bring up the word “contractor” at any cocktail party, everyone has a horror story to tell. If you’re having a home built, you start to wonder, “Who’s watching the construction of my home? Who makes sure it’s built right?”

Most new homeowners I talk to say, “Well, isn’t the local building inspector taking care of that?” Yes, to some extent they make sure the house is built right - but only from a building code standpoint.

Remember that the building codes are minimum standards your builder must follow. For example, the code says that a bathroom exhaust fan must provide a given number of air changes per hour for a given size of bathroom. The code doesn’t care how noisy the exhaust fan is.

The codes cover design criteria that are intended to keep your house from failing structurally. Codes also emphasize life safety issues, to protect you if you are not smart enough to know that you shouldn’t use your hair dryer in the bathtub.

It’s what the building inspector does NOT inspect that you should be concerned about. Rarely do they climb onto your roof to see that the roofing shingles are installed properly to prevent them from blowing off in the first wind storm. I don’t recall ever seeing any local code inspector check to see that the tile around your shower has a moisture barrier to prevent mold problems later.

If the building inspector is not watching your house construction, then your builder must take responsibility for the other 10,000 opportunities to build things right (or wrong). Many of the biggest builders in the country have internal inspection systems to ensure their homes are built right, but many do not. Some builders use third-party inspection organizations to check some of the structural items that the code inspector does not check.

Chances are, your new house was not inspected to the extent that you will be satisfied. What can you do?

The number one solution is to educate yourself and don’t be afraid to ask questions if it looks like something is not right. One of the easiest ways to do this is to get copies of the installation instructions from the manufacturer of the products being installed on your house. Many are available on the Internet at the manufacturer’s Web site.

Another way you can protect your investment is to hire an independent inspector to periodically check the work in progress. This can be expensive, but it’s a bargain compared to what lawyers working on the problems that occur later may have to charge per hour. Check out the inspector’s qualifications; some home inspectors may be knowledgeable about new construction but may lack the experience needed to do a thorough examination.

People often hire inspectors after the house is built, just before they close on the sale. Houses must be inspected as they are built. Most inspection people are hired too late in the process, when the most important things are covered up or are difficult to fix.

Ask your builder if he uses an independent inspector. How often and at what milestones does he inspect the home? Are there inspection reports available for you to see?

Homeowner beware: don’t assume that your home is being built right. Take control of the outcome by educating yourself about construction practices and making sure your new home gets the quality focus you paid for.

Gary is an independent construction quality advisor. He visits hundreds of housing job sites a year, coaching, auditing and generally raising the bar on quality. Gary is also the primary author and producer of the website at http://qcfocus.com

Construction Industry: Women Armed and Dangerous Have Mediators Frustrated

In the recent years, women have transformed from homemaker to a builder and ultimate decision maker in hiring contractors. This trend has been caused because of the labor shortage in the construction field and increasing number of households headed by single women. The introduction of women into this field can be a barrier for the construction mediator in resolving disputes, where for years the field was dominated by men. Mediators have to recognize that men and women negotiate differently. If the mediator uses the ‘one size' fits all approach, his mediation will go down in defeat.

Research has shown that women out perform men when they are negotiating on behalf of someone else, such as a client or on behalf of an employer. Women more often than men take a ‘collaborative' or cooperative approach to negotiation that has been shown to produce agreements that are better for both sides. Women are more likely than men to listen to the needs and concerns of the other side, communicate their own priorities and pressures, and try to find solutions that benefit all parties-to find the win/win solutions. This approach not only leads to better outcomes for everyone, it often produces creative solutions to problems that might have been overlooked by men taking a more competitive or adversarial approach. Also, by looking for those win/win solutions, women tend to preserve and enhance long-term business relationships-they don't burn as many bridges as men who focus on short-term gains. Women work harder, smarter but do not boast about their accomplishments.

Armed with increasing knowledge, experience in the building industry and their different negotiation skills, women can pose a different barrier to the male construction mediator. Women are more collaborative or cooperative in mediation and to many mediators this may signal that the woman is not proficient on the expert subject matter or are caving in because they or their client is liable. Many mediators discount what a woman in the construction field has to say and invariably pressures them on giving more money to settle or to drop their demand. This immediately creates a barrier for the mediator, because a woman is incensed by this type of treatment and will become more resistant to settling. Mediators are impressed by a man's aggressive behavior, who mandates that they or their client did nothing wrong, who tells war stories on what a great builder or attorney they are, and will not budge off their position unless a mediator tells them to the contrary. The mediator assumes that the male has a better handle and superior knowledge on subject matter and a woman's style of negotiation confirms the mediator's bias.

How can a mediator handle the different negotiation styles of a woman in construction mediation?

Women who are the homeowner party during negotiations are much less likely than men to ask for what they want and to use negotiation as a tool to promote their own desires. In this situation, a woman will listen to the needs and concerns of the other side, communicate her own priorities and pressures, but be aggressive in pushing her demands. Women are aware of their shortcomings and will usually have a representative or attorney make demands on their behalf. This does not mean that the "attorney is acting as the party" or the "woman does not have a grasp on the cause of the defects," rather it means she is the brain behind the action. A mediator should not become frustrated because the woman homeowner will not speak to him about her demands. However, a mediator should engage in a discussion about the issues in the case. Having a meaningful discussion about the issues will cause a woman to reframe her demands to her representative/attorney.

Women who are acting as the representative for their employer builder/contractor are savvy negotiators. Their negotiation style is different, cooperative, and collaborative and is seeking win/win solutions for all the parties. Mediators may feel that they are trying to usurp their role as the mediator, ignore the woman's discussion on how to resolve the action and limit the discussion to monetary demands. Mediators should not be condescending, engage in the discussion and then walk out of the room and tell the other participants, who happens to be males, that the woman does not have a grasp on the issues. Take her solutions seriously, bolster her credibility to the other male participants and present her ideas to the other participants. If you shut her discussions down, you will create a permanent barrier and your mediation will end without a settlement. Remember that women work harder, are smarter but do not boast about their accomplishments or expertise.

By Elizabeth A. Moreno, Esq., a Los Angeles attorney , arbitrator and mediator, who sucessfully resolves complex disputes involving construction defect issues.

Using Reclaimed Wood in Home Construction

Frugal Yankees have been doing it for centuries-cannibalizing old buildings and incorporating the material into new ones. Wood from old barns has been used to build new barns; doors and windows have been taken out of demolished homes and recycled. Even once luxurious resort hotels in upstate New Hampshire and other New England states, long closed, have been torn down, the material finding its way into residential homes all over the Northeast.

What is different is that now architects and interior designers are purposely incorporating vintage building materials into their plans. Barn boards become wide plank flooring, intricately carved mantels add a focal point in the rooms of new homes, and architecturally interesting crown molding and windows are recycled into new construction.

The practice makes sense both aesthetically and environmentally. Traditional architectural details in mint condition reflect a workmanship unequalled in today's machine-tooled era, while every piece of fine hardwood salvaged from an old building means one less piece needs to be harvested from old-growth forests.

Contractors are finding that incorporating salvaged wood and other building materials into the homes they construct is actually a good business move; many environmentally conscious prospective homeowners who decide to build rather than buy a home look for help from professionals willing to consider working recycled materials into their plans.

With awareness about environmental concerns and possible solutions rising among the public, the use of building materials recycled from demolished structures will continue to be an accepted, and possibly preferred, practice for a long time into the future.

Aldene Fredenburg is a freelance writer living in southwestern New Hampshire. She has written numerous articles for local and regional newspapers and for a number of Internet websites, including Tips and Topics. She expresses her opinions periodically on her blog, http://beyondagendas.blogspot.com