What are the options for building a house with cash?

UPDATED: Oct 1, 2022

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What are the options for building a house with cash?

I am interested in building a house on a lot. It is my understanding that when a home construction is being financed with a construction loan the funds are provided to the builder in installments after each step has passed inspection. Is there a way of doing that without taking out a loan? I am not familiar with the different steps in the construction process and wouldn’t be able to verify if the standards were met or not. Is it possible to provide the funds to a third party who will verify that things are being completed properly before additional funds are provided to the builder?

Asked on April 3, 2019 under Real Estate Law, Florida


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

Essentially, any agreement you work out with the builder is fine. So, for example, you might want to build in step-by-step payments but have in the agreement that you will only disburse the money each time after inspection by some inspector or engineer you hire who will confirm that the work is to spec, to code, and in line with what you ordered. Then it's just up to you to hire some knowledgeable person (like a home inspector or civil engineer) to help monitor what is going on.

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