New Home 101: The Basics of Newly Built Homes, Part 2

One of the first choices you have to make in buying a newly built home is where to build it. Read on to learn how that decision gets made.

Infill Lot or Master-Planned Community 

Where you want to build your home will have as big an impact on your choice of whether to work with a production or custom builder as your desire for designing your own home. Large national and regional builders typically build most of their homes in communities with at least a dozen homes and sometimes hundreds of homes. Smaller builders may use a smaller, unused parcel of land in an already-developed neighborhood on which to build one or a handful of homes. This is called “infill” development. In some cases, never-developed land may be used; in others, an older home has been torn down to make room for a new home. An infill lot or several infill lots also can be created when a homeowner with extensive property decides to subdivide the land and sell some to a builder. Other infill developments can have as much as twenty acres and accommodate dozens of houses. 

Master planned communities come in a range of sizes, some with houses built by a single builder and others with several builders constructing houses in different neighborhoods within the community, often grouped by price range. Some planned communities may consist solely of single-family homes, while others include town homes, condominiums, one-level attached villas, and several sizes of single-family homes within one development. 

In addition to varied product type, master planned communities have different land configurations. Some communities offer one-half to one-acre lots, while others, particularly in areas with high land costs, are designed with “zero-lot” lines that maximize the number of homes that can be built on the land. Some buyers prefer a larger lot, while others love the low-maintenance aspect of having a smaller outdoor space to landscape and sustain. Residents of highrise condominiums trade outdoor space for a lifestyle close to urban amenities, though some highrises do offer outdoor access in common areas such as a pool or deck. 

One advantage to a master-planned community is that the developer will typically design the land plan to include amenities such as open green space, walking trails, or recreational amenities such as a clubhouse, swimming pool, and fitness center. Depending upon the community’s size, you may find public schools within the neighborhood or even a town center or retail site. Most planned communities require residents to belong to a homeowners’ association (HOA) which assesses dues and sets out community rules all residents must follow. HOAs are typically managed by a committee of homeowners, and their goal is to protect and increase the property values of all owners.

Building on Private Land

You can also choose to build your new home on private land, whether it’s land you already own or that you intend to purchase. Not all builders will build on your land, but some specialize in working with clients who have purchased or inherited land or who prefer to find their own lot rather than buy within a new home community. Many custom builders can help buyers find land or recommend a Realtor to help. In most cases you’ll need to decide if you want to work with a custom builder or a builder who specializes in “build-on-your-own-lot” homes, often referred to by an acronym as a BOYL home. 

“There is no ‘typical’ when it comes to custom homes,” says Jim Rill, owner of Rill Architects in Bethesda, Maryland. “Some custom homebuyers have a lot already and some are looking for land; some need to finance the job and some are paying all cash. Most of my clients are looking for land and want to know about the custom home process and budget before they buy land.” 

If you’re starting your search by looking for land, a national website such as can help. When you search for a home, select the Advanced Search function and then use the Property Type menu of to select the option: “Land.”

If the home you envision is in a remote location, perhaps high atop a ridge or surrounded by dense woods and many acres of undeveloped land, a few words of advice: Before you buy that rustic and beautiful land, work with a builder to determine if the site is already buildable  and, if not, what the feasibility and cost will be to extend electricity, water and natural gas. Many remote and pristine regions are buildable, if you’re willing to dig a well for water, install a septic tank, and utilize a propane tank in areas that can’t be reached with natural gas lines. If you’re considering this option, this article from the New Home Guide section of New Home Source can help.

If you have buildable land already, start your search online to find builders who work in your area and build homes similar to the style you want to create. Working with a build-on-your-own (BOYL) lot plan can be less complicated than a custom home, but some buyers want a completely custom home that’s 100 percent what the owner wants and can afford, says Rill.

“Build-on-your-own-lot builders are similar to custom home builders, but they have plans that they’ve built before which can save time,” he added. “They’re not designed for an individual, but they’re designed for the local market based on research into what buyers want. While the buyers can customize these plans, the house is being built without the ongoing assistance of an architect. The architects hired by these builders design the plans and then go on to other projects.”

Most custom homebuyers are as interested in the interior design elements of their home as they are in the architecture. Building a custom home offers you the opportunity of choosing every element from something as tiny as the hinges on your doors to larger features such as your kitchen cabinets. While a production builder will offer several styles of cabinets, a custom builder may be willing to use any cabinet you desire or may have a skilled cabinetmaker who can design and build them from scratch.

Custom builders offer a range of design services; some have an in-house interior designer and a design center, while others leave it up to the buyers to decide if they want to work with their own privately hired interior designer or make all their design choices independently.

Selecting a Custom Builder? Here’s What to Consider  

If you’ve decided that a custom builder is the best fit for you, once you have a pool of custom builder candidates, it’s time to tour one or more homes built by each one.

“Most builders have a model or at least a partially constructed home that they’re building for a current customer,” says Paul Schumacher of Schumacher Homes. “Frankly, if a builder tells you they don’t have anything for you to see but floor plans, then they’re not really a legitimate builder. You need to see the finished product in person."  

Of course, every builder says they build a quality product, but you need to see a home and inspect it to really know whether a builder does quality work, says Schumacher. A builder should show you one or more homes that represent their standards so you can hold them accountable to build a home that meets those standards for you, he says.

“That’s why we show you the finished product and a partially finished home so you can see what’s being done inside the walls,” says Schumacher.  

“Get a complete list of included features that shows you everything the builder will do, such as all the sticks and bricks, the brand names, and materials that will be used in the kitchens and baths,” he continued. “You need to know if a builder is doing poured walls or block walls in the basement, putting twenty-five- or thirty-year shingles on the roof, and things like that in every category. Then, you can compare one builder to another to see which ones are doing quality work.” 

Choosing a builder is not just about looking at the builder’s work. You also need to interview your builder candidates to determine who you can best establish a working relationship with over the next year.

“As part of the interview process, you should have two or three builders come out to your land with you and talk about what you want to build, how to position it on the land, where the utilities, garage, and driveway could go,” Schumacher says. “This is an extremely important meeting because at the end of it the buyers should feel peace of mind that they understand what can be built on their land. You can see what kind of expertise a builder has when he’s discussing with you the issues that need to be addressed.”

If you prefer to have a unique home designed for you, you can start with either a builder or an architect.

“Some people say it’s better to hire a builder first and then an architect, but I think it’s more logical to hire an architect first to do the planning and to be more in control of some of your costs,” Jim Rill says. “You need to have some imagery and an idea of what you want in terms of size and style before you can begin to estimate what your home might cost. You have to understand that something a production builder can do for $100 per square foot can cost more than double from a custom builder because production builders can do it for less because they’re building a hundred of those houses.”

Buying a custom home is different from financing a production home.

“Although some custom homebuyers pay cash, if you want to finance it you’ll need a construction loan,” says Rill. “Get a bank involved as early as possible, especially during the study period when you’re looking at a piece of land. I introduce prospective clients to several lenders with experience doing construction loans.” 
“If you want to build a custom home, make sure you do your research before you spend any money,” he added. “Interview builders and architects and give yourself time to back out until you truly understand what it will take to build the home you want. Get competitive bids from several builders. Architects can use 3D depictions to walk you through the home design, so be sure you’re satisfied with the design before construction begins. Change orders after construction starts can be expensive and cause delays.” 

Whether you choose a completely custom design, start with an existing floor plan and modify it, or decide on a floor plan that you can personalize, the end result will be the same: a new, never-lived-in home that reflects your individuality and the way you and your family want to live.

This article is the second part of a two-part series discussing the basics of newly built homes.

For more expert advice on buying and building a home, check out the free eBook download of New Home 101: Your Guide to Buying and Building a New Home at

Michele Lerner is an award-winning freelance writer, editor and author who has been writing about real estate, personal finance and business topics for more than two decades. You can find her on Google+.

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