The Log Home Industry Expert

With uncertainty engulfing our economy, why would anyone build now? We are confronted daily with customers that are uneasy about moving forward with their building project in the middle of this current economic mess. Of course, each person or family has to evaluate their own financial situation and no one should build if they can’t afford it. But let me make three points before you decide to shelve your building plans:

1. Building costs will never be lower
2. Mortgage interest rates are at an all time low
3. Inflation (or hyperinflation) is on the horizon

See Yourself in 10 Years

Will you be kicking yourself and saying “I knew I should have pulled the trigger when building costs were at an all time low?” In 2019 material and labor costs are much higher and interest rates are on the rise. There are more government regulations and hoops to jump through, which are driving construction costs up even further. Thanks to stimulus spending a decade earlier, the country is experiencing double digit inflation. The smart money locked their 30 year mortgages at interest rates near 5%, and are repaying those loans with inflated dollars. And to make matters worse, since you didn’t build your home in 2009, you missed 10 years of enjoying it.

We all wish for a crystal ball so that we could gaze into the future and make better informed decisions today. Even without a crystal ball, the signs are pretty clear. We are in a tough economic environment; entering the 17th month of the longest recession since the Great Depression. It will probably be a long and protracted recovery before we are back to more normal. Some of the most pessimistic economists are predicting the recovery could last 10 years before real estate values are back to pre-2007 levels.

The Role of Inflation Tomorrow

At some point, we are going to have to pay for the stimulus spending. I’m not going to debate the merits of stimulus spending other than the reality that we cannot continue spending trillions and trillions without paying for it at some point in the future. It either gets paid via higher taxes or, the more politically expedient way, inflation. With all the money the Fed is pumping into the economy, once the recovery starts, inflation is bound to rear its head. Once inflation takes off, you best have your money invested in hard assets that will increase or retain real value. Better yet, leveraging those assets with fixed low interest rate loans that can be repaid with inflated dollars will yield a double inflationary hedge. Whatever you are feeling about real estate and, many people are not feeling very good, real estate is still the best protection against inflation.

The Upside

New home construction is at its lowest recorded level and there are more builders and subcontractors looking for work ever than ever before. Currently, it is a buyers market with tremendous opportunity to make deals that were unthinkable just a few months ago. Plus you don’t have to wait as long to begin building your project.

If you currently own your building lot and bought it before last year, most likely, your land is not worth as much as pre-2007 levels. But, what does that really mean? If you bought your land to hold long term and build say - a retirement home or family cabin to be held for a number of years and/or passed on to your family, then the land is the land. It still has all of the characteristics, beauty and other reasons that prompted you to buy it in the first place. If your intention is to build on your land, now is the building opportunity of a lifetime.

Bottom Line

Chances are pretty good that prices will not go much lower than they are today. It is more likely there will be upward pressure as the economy improves and inflation and interest rates will rise. Bottom line, if you are going to build, it is a far smarter bet to build today than wait. This is a historic time with historic opportunity.

Guest Author: Perma-Chink Systems 

Taking care of log homes is a bit like caring for your car.  You would never consider driving your car for years without changing the oil or ever washing it.  Your home too needs an occasional wash, inspection and maintenance.  It is easier and better to inspect a clean home than one that’s dirty.  Besides, a clean log home looks great.  It’s amazing how a few months worth of pollen, dust and dirt can hide the beauty of your log home finish.  And like a car, giving it a cleaning every once and awhile helps extend the life of the entire finish system.

At Perma-Chink, we recommend cleaning your home twice a year, in the spring and the fall.  But you need to be careful with what you use to clean your home.  Many household cleaning products have a high pH.  This means that they are alkaline or caustic and these types of products can harm your finish, even if it’s in good shape.  For maintenance cleaning avoid using products that contain bleach or ammonia.  Both can have a detrimental effect on your finish.  Products that are slightly acidic like our Log Wash are much better to use since they are gentle on the finish but are extremely efficient cleaners.

The Inspection
Once your home is clean it’s time to do your inspection.  Start at one corner of the home and be sure to go all the way around.  Inspect each wall individually and don’t try to inspect too much at a time.  If you have a digital camera, take it with you during your inspection.  It’s amazing how difficult it is to find something you noticed a week or so ago.  Begin by standing back, away from the home and look for some of the more obvious problems such as:

1. Filled gutters and blocked downspouts.  If you are not sure about them, use a garden hose to make sure that they are in good working order.
2. Look at the dormers and upper story windows for signs of water damage.  If you have a problem seeing that far, use binoculars to inspect the higher areas.
3. If you have a sprinkler system, turn it on to make sure that no water is hitting your foundation or log walls.
4. Landscape plants and shrubs should be no closer than 18 inches to any log wall.  If necessary, trim them back.
5. Move any piles of firewood at least two feet away from the home and never store firewood on the porch.
6. Look for any wood that is in contact with the ground, even if it’s pressure treated.  For protection against termites and rot, all wood should be at least 12 to 18 inches above the soil.
7. When you stand back from a wall you can better see general patterns of wear and fading of your finish, especially on the south and west walls.

Now that you have inspected the wall from a distance it’s time to get up close to see what’s going on.

1. Look closely at the finish.  Round logs tend to weather more on the upper half than the lower half since it’s this area that’s most exposed to the sun and rain.
2. Are there any new upward facing checks that have opened up since your last inspection?  If so, seal them.  It’s also a good idea to pour an ounce or two of borate solution in the check a few days before you seal it to kill any decay fungi that may have started to grow.
3. Look for signs of algae and mold.  If there are green splotches, it’s algae and an indication that the wood is staying damp.  Small dark spots are typically molds.  A good washing with Log Wash will remove mold on top of the stain but if they are located under the stain it may be necessary to remove the finish in order to get at them.
4. As you walk along looking at your logs take along a small hammer and lightly tap the sill logs every couple of feet.  Also check the logs around windows and doors.  If a log sounds hollow or you get a dull thud you may have a pocket of rot that needs to be repaired.  Use a thin bladed screwdriver to probe the area to see if the wood is soft.
5. While you are inspecting the logs you should be looking for signs of insect infestations.  A few beetle holes here and there are no cause for alarm.  Most of the holes are probably old and empty.  If you are not sure, stick a strip of masking tape over the holes and check it a week or so later.  If the infestation is active, holes will have appeared in the masking tape.  It takes many years for these beetles to do much damage.  Just make a note of it and when it comes time to completely refinish the home be sure to treat it with a borate before you apply a new coat of stain.
6. Window and door frames are the source of many water related problems.  Check to see if the caulk is adhering to the adjoining surfaces.
7. Give special attention to all log ends, especially if they extend out beyond roof overhangs. The log ends can really absorb water and that’s where a lot of rot problems start.

Little problems can turn into major ones if left unattended.  A bit of maintenance now and then will keep your home healthy and beautiful.

The design team at Mountain Architects have put together a great “Top 10″ list of things to consider when designing green log homes and timber frame home retreats.  

The team highlights key points such as:

Consider the Log Home Carbon Footprint…

Reduce the use of chemically processed materials…

Consider good basic design decisions… 

Use energy efficient products…

Use low-VOC products…

Use wood Alternatives or FSC-certified wood products…

Consider environmentally preferable and rapidly renewable products…

Use rapidly-renewable materials…

Plant trees to shade the house and for wind protection…

Use Green Power… 

If green is your goal, you have to check out this list! Read the full article and discussion at the Log Home Plans Blog.

On-site inspection and verification of construction is an invaluable service many architects provide clients during the construction phase of their custom log home.  At Mountain Architects and PrecisionCraft, we have incorporated site visits as a standard practice with a minimum of five on-site inspections as a base line.  Having your architect perform on-site inspections is very much like an insurance policy guaranteeing that your builder is building your home according to your plans and specifications.  Custom log home construction can be complicated by a complex design or by your build site itself.  As such, many decisions are made as the construction of your home progresses.  It’s easy and tempting for the builder to take short cuts that might affect the build quality of your home.  In addition, interpretation and adjustments to your plans are normal as conditions at the construction site change and information becomes available.

The cost of constructing a custom log home can be a huge financial investment for most homeowners – often times the largest financial investment a person will make in their lifetime.  Engaging the services of a professional and licensed architect can greatly enhance the success of your project and will pay for itself in savings and satisfaction.  At Mountain Architects, our standard architectural services include design, feasibility cost estimating, preparation of the construction documents, structural engineering, competitive builder bid administration, building permit submittals and site inspections.  The package of services might be summarized as “advocate” for the homeowner.  Site inspections are a critical element in the suite of services and protects the homeowner by ensuring that the home is being built as planned.

Most homeowners are not construction experts.  It would be unreasonable to expect a typical homeowner to see and certify if the builder is on track and performing as expected.  However, an architect is a construction expert.  If the builder knows that they must answer to a knowable professional, the builder is more likely to be accountable for the work performed.  Also, on-site decisions are not made on the fly and without oversight.

The architect provides the homeowner with both creative talent and technical know-how.  In order to do a complete and effective job for the homeowner, the architect needs to be involved beyond the preparation of the drawings.   The level of involvement may be as limited as to four or five site visits. At Mountain Architects, our base service is to visit the site at least five times.  More site visits are at the discretion of the owner and architect depending on the project progress and reliability of the builder

The building of a custom home requires a team of professionals including the architect, engineer, builder, sub-contractors and suppliers.  A successful building project takes a level of trust, particularly between the architect and the builder.  The best formula, as once stated by President Ronald Regan, “Trust but verify.”

Learn more about PrecisionCraft’s Total Log Home Solution to learn how PrecisionCraft’s services ensure your project is a success minimizing unexpected costs and opportunity for issues or concerns.

Residential real estate has taken a serious blow in the last few years. New construction of single family homes is at its lowest point since the recession of 1991. It’s a buyers market and smart investors know this is the best opportunity to get great deals on new construction, especially new log homes and timber frame homes. Builders, subcontractors and material suppliers are all hungry and are willing to go the extra mile for new customers. While almost all commodities are at an all time high and rising, lumber prices and other building materials are priced low. The dramatic increase in energy costs has not yet been reflected in lumber prices.

The current economic environment isn’t going to last forever. Most economists expect the housing market to bottom out in mid-2009. Once the supply of new homes is back into balance with demand, new construction will begin to increase at a normal pace. Once construction begins to pick-up, prices are bound to increase. In the interim, there are some great deals.

For those individuals planning to build a new log or timber frame home, the timing couldn’t be better. Now is the time to get aggressive with competitive bidding. When the economy is down, many people are hesitant to jump into a new construction project. However, the smart money buyers know that you buy at the bottom of the market and ride the wave up.

Of course, timing is everything. It appears that early to mid-2009 will be the best time to send our RFP (Request for Proposal) bid packages. Mountain Architects offers bid administration services designed to assist customers in getting the best results through competitive bidding. The project managers at Mountain Architects will prepare the RFP package for clients which will include construction drawings, engineering and specifications. The RFP bid packets will be sent to prospective builders. Information sent back to your project managers will be analyzed and compare to Mountain Architects initial cost estimate and national averages for reasonableness. Mountain Architects will then gather and organize builders competitive bid information in order to assist you in making a good builder selection.

Price is certainly not the only factor in selecting a builder. Reputation, quality of work, and financial stability are all factors that must be taken into consideration when selecting a builder. In conjunction with the RFP bid packets, the project managers at PrecisionCraft & Mountain Architects will provide “builder due diligence” by gathering background information on prospective builders. All of these factors will assist our customers in making an informed decision and at very competitive pricing.

The team at PrecisionCraft only works and recommends high quality builders. Builders, such as Prideland Homes, that build homes on relationship, trust, confidence and open communication.

Creative design is at the heart of PrecisionCraft’s business. This dedication to meeting clients’ design expectations has been illustrated time and time again as PrecisionCraft and its design division, Mountain Architects, lead the industry in design awards. These design awards recognize exceptional designs across the different product lines – handcrafted & milled log homes, timber frame homes, and most recently homes designed using an eclectic mix of log & timber (known by many in the industry as log and timber hybrid homes).

But, for the team at PrecisionCraft and Mountain Architects, the challenge to be the best continues on and steps into a new line of homes. This week, PrecisionCraft announces the release of Mountain Accent Homes. With a Mountain Accent Home, a client can get the same great PrecisionCraft design customized to fit a specific style and layout, but at a considerably lower turnkey cost.

Designed and constructed using conventional stick framing, PrecisionCraft’s Mountain Accent Homes incorporate unique log and timber frame elements into the design. The Caribou handcrafted log home plan is a great illustration of how Mountain Architects can redesign an award-winning plan at a lower turnkey cost.

The Caribou log home plan is one of PrecisionCraft’s most popular plans. Recognized by Log Home Design and Log Home Living for its creative design, the Caribou, as a handcrafted log home, turnkeys at approximately $800,000. Keeping the same rustic appeal of the original Caribou plan, Mountain Architects redesigned the Caribou as a Mountain Accent Home™. Using conventional framing and rustic handcrafted log elements the new Caribou plan turnkeys at approximately $450,000. At PrecisionCraft.com, clients can explore an extensive floor plan gallery featuring 70+ timber and log home floor plans. Every PrecisionCraft plan can be redesigned, like the Caribou, as a Mountain Accent Home™.

Altering the log and timber product combination of a design – as illustrated above – represents only one aspect of the custom timber & log home design services provided by the team at Mountain Architects and PrecisionCraft. Adjusting design complexity, altering square footage, and choosing a variety of home finishes are other important ways to customize a home to fit a client’s aesthetic style and budget. Getting a great home all centers on custom design, something the team at Mountain Architects knows a lot about.

Selecting your general contractor to build your custom log home is certainly one of the most critical decisions you make. Once you have made your selection, it is important that the terms of your agreement with the contractor are specific and spelled out well in advance.

The American Institute of Architects (AIA) and the Associated General Contractors of America (AGC) have jointly developed a set of contract documents that define the role and responsibility of the contractor, owner and architect. These documents have been developed over more than 100 years of experience and address most major issues that might appear during construction. Every few years, these documents are updated and revised to adapt to the latest construction trends and techniques. The AIA documents are highly respected by attorneys, contractors, architects and engineers and accepted as the industry standard.

Building a custom log home or timber frame home is typically a very large financial commitment. Owners place a great deal of trust into their architects, general contractors and other building professionals. Often times, clients who have never built a custom log home (or any type of custom home) do not understand what to expect. Using a professional licensed architect is one of the best ways to insure the project will be successful. Your architect will most likely be familiar with AIA documents. The AIA contracts spell out the normal obligations and responsibilities of each party such as duties, timelines and payment schedules.

At PrecisionCraft, premiere designer, manufacturer, and builder of log & timber homes, customers want to the opportunity to customize their homes. They are looking for a “one-of-a-kind” home that fits their personal taste, needs and their surroundings. However, there is no reason to “re-invent the wheel” when it comes to following a set of standards and expectations. The AIA contract documents, used with PrecisionCraft’s clients, have been proven year after year and follow a known path of success.

As the leader in custom design, PrecisionCraft Log Homes encourages clients to turn to the well trusted AIA documents. PrecisionCraft specializes in the design of handcrafted log homes, milled log homes, timber frame homes, log & timber hybrid homes, and stick frame homes with log & timber accents.

When it comes to protecting your log home, why not get your info from the experts? Below are some pointers from Sashco - a company specializing in high quality sealants for both conventional home construction and log home finishing and maintenance.

The design of your home and the style of logs that you select are key elements that you should consider early in the planning stage of building your home. These decisions can greatly influence the amount of time and money that you will spend on future maintenance.

Since it is a combination of water and sun (UV rays) that does the most damage to finishing products, it is wise to incorporate long eave overhangs, and, when possible, porches into your home design. Another design element that will extend the life of stain is a good gutter system that keeps water from sheeting down the logs and directs the water away from your home. And, don’t forget those log ends; make certain that log corners and purlins are well under the eaves. By incorporating these design elements into your plans, you will positively influence the longevity of the stain on your home.

Another factor to consider is the style of log that you choose. If you prefer the look of rounded logs, be prepared for more maintenance. The upper curvature of rounded logs takes the full force of the sun, whereas the lower curvature has less exposure to damaging UV rays; this means that to keep an equal appearance between the upper and lower curvature of the logs, a periodic coat of stain may need to be brushed onto the upper curvature of the logs. This step may be necessary only on portions of walls that are receiving extreme and constant sun.

But the single most critical factor in preventing premature stain maintenance is proper prep work of the logs prior to staining. There are five words that sum up the best in proper wood surface prep: clean, sound, warm, dry and textured.

Clean wood is free from mill glaze, dirt, pollen, wax, mold, bird droppings, etc. A buildup of these elements prevents stains from being able to penetrate and bond to the wood surface. This may seem perfectly obvious, but this is the step that is given the least attention, and often a thoroughly clean surface is never achieved, with inevitably poor results. You can count on it–the cleaner the logs, the better the stain can anchor into the wood.

Sound wood is wood that hasn’t suffered surface damage from UV exposure. Surface damage is apparent when the natural color of logs starts to turn a progressively deepening yellow color that then turns to gray. Depending on the location of your home, this process can happen in a matter of as little as two weeks. As the UV degradation continues, the wood fibers are loosening and detaching from the bulk of the wood substrate. If you stain over this fragile and damaged surface, the stain can lose adhesion along with the deteriorating wood fibers. Therefore, wood that has been left unprotected for any extended time should be sanded, media blasted, or aggressively power washed to remove damaged surface wood fibers prior to applying any coating.

Warm wood is ideal for stain application. If the wood surface is too hot, the coating may start to dry before proper wetting, penetration and adhesion can occur. If the wood surface is too cold, the contracted state of the wood cells can prevent penetration and anchoring of oil based stains; and water based stains can start to freeze before they can establish adhesion to the wood. Remember, we are talking surface temperature of the logs, not ambient air temperature.

Dry wood, as defined by the USDA Forest Products Laboratory, contains 20% or less moisture. Coatings can blister and peel if applied to logs with a 20%+ moisture content. Before applying any coating, you should rent or borrow a moisture meter to check the moisture content of your logs. If the reading is 20% or greater, don’t stain. It is better to wait than to have to repair blistering, peeling stain.

Textured wood, roughening up the wood surface by either sanding, a light cob blasting, or any other, similar abrasive methods, will greatly enhance stain penetration, improve adhesion and provide more stain durability than application to a highly smooth surface; this is particularly true on the upper curvature of logs.

The first year after the initial stain application, you want to carefully inspect the overall appearance of the stain, checking for inconsistencies in the initial application. Check to see if there are areas that did not receive an initially adequate amount of stain, which can sometimes happen in localized areas when the stain is first applied. If you locate such areas, simply clean the surfaces with damp rags or bristle brushes to remove dirt, pollen, etc., and then apply a light coat of stain, feathering it into adjoining areas.

Once you have inspected your home and beefed-up any areas that may have needed another light coat of stain, you should consider applying a compatible clear topcoat on the entire structure. Clear topcoats are extremely easy to apply, yet they can extend the life of the pigmented coats of stain underneath. The clear topcoats are sacrificial coats that take the brunt of weathering, protecting, and thus, extending the life of the pigmented coats. They are very easy to apply, and because they are clear, the color of your logs doesn’t darken as it would if you applied repeated coats of pigmented stain. Eventually, however, you will need to decide when more pigmented stain needs to be applied for the best overall appearance and protection.

While you are inspecting the stain, also look for any checks that may have opened up on the upper curvature of the logs. Checks on the upper curvature can take on water from rain and snow, so it is important to pay close attention to these openings and prep and seal them properly.

And, finally, make it a practice to walk around and inspect your home, every fall and spring. Look for the obvious: bushes that have overgrown and are scraping the home, trees that have matured and the canopy is now dripping water down the logs, gutters that need repair, sprinklers that need adjusting and are spraying water on the logs, “stuff” that is being stacked against the logs. These are simple things to correct, but doing them can prolong the life of your stain, allowing you time to enjoy your home instead of working on maintaining it.

Presented by PrecisionCraft, the leader in designing, manufacturing, & constructing log homes.

Written by Tom Heatherington

There has not been a better time in years to build your log home!

If you permit the media to drive your decision making, you already know this is the worst possible time to make a lifestyle change. The housing market is in the tank, stock charts look as if they were printed from an oscilloscope, and upcoming elections (are intended to) make us feel anxious. If you include war news, terror reports, natural disasters and the Hollywood writer’s strike you must know this is absolutely the worst time to make serious lifestyle changes.

As the editor of the Log Cabin Directory, I have a unique perspective on the log home and timber frame business. In my daily routine I speak with people on both sides of the log home sales process. I answer phone calls and emails from prospective log home buyers, and I speak with builders, dealers and manufacturers on a regular basis.

It is no secret that the home building industry in general and the real estate market in particular are experiencing a downturn, which actually has been anticipated for a number of years. Although this slump has impacted the log and timber home segments of the market, it is not as severe as that being experienced by the conventional home building market. When such cyclic events occur buyers will often postpone their plans, which usually prompts manufacturers and builders to focus more on improving customer service and sharpening their pencils to attract new customers.

Economic cycles are part of life and there is not much new in this current phase. These cycles are always gut-wrenching, as we are experiencing them, but somehow we always get through them and business eventually goes back to normal. Think back to as recently as the dot-com meltdown of 2000-2001 when the stock market was blowing-off billions of dollars in profits. Companies were going bankrupt, banks were overextended and we watched TV like frightened deer in the headlights while the talking heads convinced us how bad things were. Imagine what your reaction would have been back then if someone told you that you’d be smart to build a custom log home, because it would probably double in value over then next 5-10 years.

This is why I believe that there is no better time to build a log home than now, because if you are a buyer, these current market conditions are exactly what you have been waiting for – whether you realize it or not. With the housing industry soft overall, you can expect to receive more attention and better service from builders than at anytime in recent years. Manufacturers have been reminded that you have a choice, and are focused on making you want to do business with them. This is a buyers market and as history has proven over and over again, that dream home of yours will cost you more to build later than it will today.

Any savvy investor will tell you that the time to buy is when a stock is out of favor. The apprehension from log home buyers in today’s market creates a huge opportunity for those willing to ignore the media’s fear-mongering and proceed with their dreams. Most people considering a log home have the funds or the credit worthiness to complete the process. The only thing lacking is the courage to ignore the crowd’s ill-advised mindset.

Now if you are planning to build a log home on spec and try to flip it for a quick profit, this may not be the most ideal time to play real estate roulette. However, if building a log or timber frame home to live in and enjoy has been part of your plan, there hasn’t been a better time in years to make it happen.

I am no Pollyanna. On the contrary, I have three daughters so I have been hard-wired to worry about everything. Additionally, I share the same concerns about the economy and my family’s future as you do yours, but every now and then someone has to slap me and tell me to focus on the things I can control. If a log home is part of your dream, take a lesson from history and don’t let Drudge or the ‘alphabet news channels’ talk you out of realizing your dream.

About the author: Tom Heatherington is the founder and editor of the “Log Cabin Directory”, one of the largest log home information sources online. He is the author of “The Complete Small Business Internet Guide” and numerous articles on log home living.

As you begin the process of financing your Log or Timber Frame home, you will find that there are some differences compared to financing a conventional home.  The following is a list of things to consider:

1. As you interview lenders, look for a loan officer who is experienced in Construction lending.  Even more importantly, make sure the lender is experienced in Log Home and Timber Frame construction lending.  You may have many questions during the process and you will want to deal with an expert that you can rely on.
2. What is the lender’s policy as it relates to paying the required upfront deposit as well as the final payment to the Log or Timber Frame company?  You will find that many lenders shy away from financing these types of homes because they are not comfortable paying out monies before materials are on site.  Alternatively, the Log and Timber Frame companies require a down payment to begin milling the logs or timbers.  Keep in mind that the log or Timber Frame package is unique to each client’s project.  The down payment deposit is your “good faith” commitment towards purchasing that package.  Unless you have the financial wherewithal to pay these monies out of pocket, you will want to be sure your lender will accommodate the required payment terms of your Log or Timber Frame Company.  Understanding this upfront can save many challenges later in the process.
3. During your research, you will find that lenders offer two types of Construction loans.  I refer to the first as a “Two-time Close,” which means the lender will provide you with a construction loan that will need to be refinanced into a new permanent mortgage loan once the home is completed.  This type of transaction requires that you re-qualify for the new permanent mortgage and it also requires that you pay two sets of closing costs.  A less expensive approach may be a “One-time Close” loan.  In this situation, the lender provides one loan for the construction period.  When the home is complete, the loan will automatically convert to a permanent mortgage.  Lenders policies vary, but for the most part, this type of loan will not require you to re-qualify or pay new closing costs when the home converts to the permanent mortgage.  Typically, during construction, you will pay an interest only payment based on what you owe each month.  As your balance increases, so will your monthly payment.  When the home is complete, you will begin to pay a Principal, Interest, Tax and Insurance payment (like that of a normal conventional loan).  Construction loan terms vary from 6 months to 12 months and beyond.  Check with your lender.
4. Once you have determined which lender you will use, it is recommended that you apply for your financing early on in the process.  Understanding how much you can qualify for up front will aid in your discussions with your Log or Timber Frame company as well as with your builder. Most lenders do not charge for a pre-approval.
5. Understanding the real estate market in the area that you are going to build can be very useful.  It’s important for your lender to know if your new home will be marketable in your area.  For instance, here are some items to consider sharing with your lender:  Is the size home you are considering building in line with other homes in the area or will it be an over-improvement or an under-improvement?  Does your property include acreage and if so – how many acres?  Is this typical for the area?  Is the property zoned agricultural and is there anything growing on the site?  Are there other log or Timber Frame homes in the area or will your home be the first?  Are you considering an alternative approach to power (i.e.; solar)?  It’s critical that you discuss these items with your lender up front.  It can save you from challenges late in the processing of your loan.
6. What type of down payment is going to be required?  You will find that each lender has different policies.  Most lenders will require a 5%, 10% or 20% down payment (down payment percentage is typically determined by your loan size).  This means 5% to 20% of the overall project cost (land plus construction costs of the new home).  As an example, if you are purchasing the land with the construction loan, you would add the purchase price of the land to the budget (cost breakdown) for the home.  You would be required to bring cash to the loan signing of 5% to 20% of the total amount.  If you own the land outright, the equity in the land would most likely count towards your down payment needs.  In this scenario, you may not be required to bring any cash to the loan signing.  The equity in the land may already be your 5% to 20% (or more) down payment.  If the land equity is sufficient, you may be able to finance the closing costs into the loan as well.  Discuss your scenario with your lender up front to determine if you will be expected to bring any cash to the loan signing.
7. Are you considering beginning any construction work on your site prior to loan signing/closing?  Pre-start activity is generally acceptable, but you should check with your lender before beginning any construction work on the property.  There may be a challenge with the Title Company insuring the lender if any work has begun prior to the loan signing.  If it is determined that it is acceptable to begin work ahead of time, keep good records of anything you pay for out of pocket.  You may be asked to prove payment for these items.  A copy of the Invoice and canceled check or credit card receipt should suffice.  Any payments you make ahead of time should also be credited towards your down payment needs (listed in # 5 above).  Once your initial down payment is made, any excess items paid for may be able to be reimbursed to you at the loan signing.  Discuss this with your lender to see if you can be reimbursed for any of these items.
8. What happens if your costs exceed your original budget?  This is a common occurrence with construction projects.  The excess can be caused by something outside of your control or can be caused by an upgrade that you make along the way.  Either way, if there are not sufficient funds in the loan to pay for the overage, then you must pay for it with your own cash.  Perhaps a better way to handle this would be to build a contingency factor into the loan amount.  This is accomplished by increasing your loan amount for potential cost overruns.  A good rule of thumb is to build in 5% to 10% of the budget as a contingency factor.  This is all possible as long as the appraised value of the property supports the extra dollars requested in the loan.  Typically the lender will not require that you use the contingency dollars.  It is only there for you should you need it.  Ask your lender to explain their policy on the use of contingency dollars.
9. Is Interest Reserve an important feature for you with the construction loan?  Interest Reserve is a dollar amount that is added to your loan and is used to make your monthly interest payments during construction.  Instead of writing a check each month for the interest that is due, the payment is taken out of your loan and made for you.  During construction you actually make no monthly payments.  At the end of construction, you owe more money because you have borrowed those monthly payments using the loan proceeds.  This feature is not important to everyone.  It may be useful for a client who wants to sell their current home, but would like to live in this home while the new home is being built.  Making two house payments on a monthly basis may be a challenge while the other home is trying to be sold.  Having an Interest Reserve could be a nice feature in this scenario.
10. Are you considering being an Owner Builder?  Being involved in the building of a Log or Timber Frame home appeals to a lot of people.  If you are considering overseeing or actually doing some of the construction work on your own, please discuss this with your lender up front.  Some lenders will want to be sure that you are experienced enough to oversee the project.  You may be asked to provide a resume of your experience as it relates to construction.  Other lenders may not allow you to be an Owner Builder at all.  Be sure your lender will accommodate this for you.

This article was written by Paula Murtha with Chase Home Finance. For more information on log home financing, please contact Paula by email at Paula.Murtha@chase.com or call 303-759-6762.

Log Homes and Timber Frame Homes may have the lowest carbon footprint of any other type of construction.  A carbon footprint is the measurement of carbon dioxide released as a result of using a particular product or other human activity.  Carbon dioxide is the main greenhouse gas released into the atmosphere and major contributor to global warming. 

A report prepared by the Edinburgh Center for Carbon Management1  (ECCM) compared the carbon dioxide footprints of three structures and the benefits when more timber was introduced into the construction.  The results were astounding.  ECCM estimated that there could be up to an 88% reduction of greenhouse gases by using log or timber structural elements wherever possible rather than other conventional building materials.  The reduction of greenhouse gases was achieved by replacing materials high energy, high CO2 production values, such as steel and concrete, with solid wood.  The report states that the production of steel and concrete materials accounts for 10% of the total global emissions of greenhouse gases.  These materials have a high CO2 output created during the extraction of raw materials, refining, processing and manufacturing of the finished product.  As reported in a study published by the Royal Australian Institute of Architects, the energy consumed to process a tree into a finished sawn timber is about one-tenth of steel production.2

In another report prepared by The Consortium for Research on Renewable Industrial Materials (CORRIM)3  compared four different structure using different wall systems – two woods, one concrete and one steel.  The report found that the steel wall system generated 33% more greenhouses gases than wood and the concrete wall generated 80% more greenhouse gases than wood.  The study also reported that the wood structures out-performed the steel and concrete houses in energy use and the impact on air and water quality. 

Wood walls are typically framed or solid.  Conventionally framed walls use a combination a several materials including processed wood products such as plywood or other laminated wood products, fiberglass insulation, exterior siding, interior sheetrock and some type of wall covering.  Solid wood walls using logs or timbers have basically one product – the log or timber.  The energy consumed and the CO2 produced in the production of logs and timbers is a fraction compared to the production of all the various materials in a conventionally framed wall. 

Consumers are much more aware the environmental impact of using different materials and are being increasing sensitive to the hazards of exposure to chemically processed materials.  Logs and timbers are 100% natural.  As a natural product, they do not emit VOCs or other pollutants into the outdoor or indoor space.  Trees are produced from soil, water and air combined with the energy from the sun, in a miraculous process of photosynthesis.  Ecologically and environmentally, solid wood is the only building product that is renewable, biodegradable, recyclable, energy efficient and extremely beautiful.

Sustained and plantation forest growth actually reduces greenhouse gases by consuming CO2 out of the atmosphere while the trees are growing.  Political pressure to reduce carbon dioxide emissions, such as the Kyoto Protocol, is sure to continue and it will become increasingly important to find solution.  The use of solid wood construction such as with a log home or timber home can make a positive contribution. 

[1] Forestry Commission Scotland Greenhouse Gas Emissions Comparison – Carbon benefits of Timber in Construction.  Aug 2006. 

[2] Wood – another low carbon footprint solution.  Feb-Mar 2006, ECOS 13. 

[3] The environmental performance of renewable building materials in the context of residential construction

Perez-Garcia, John, Bruce Lippke, David Briggs, James B. Wilson, James Boyer, and Jaime Meil. - www.corrim.org/

 

A great log home (or any custom home for that matter) starts with quality professional design. Hiring a licensed architect is your best bet and will ensure a better design and a successful building project.

Many people fancy themselves to be good log home designers and undoubtedly, some are. Anyone can call themselves a “residential designer” with or without any education or experience in the field and most jurisdictions will accept plans prepared by non-certified designers. The danger is that a non-licensed designer may have fragmented knowledge about the log home building process without fully addressing all areas of responsibility.

Only architects licensed through examination have dedicated themselves to years of rigorous study, education and requirements. A licensed architect has a comprehensive knowledge that brings together artistic design with safety, environmental and energy concerns and sound building practices. In addition, licensed architects are required to complete continuing education every year keeping them up to date with the latest in log home design and building practices.

Most licensed architects are members of the American Institute of Architects (AIA).
The AIA is a professional organization that supports architects. Members adhere to a code of ethics and professional conduct that assures the client, the public, and colleagues of an AIA-member architect’s dedication to the highest standards in professional practice.

In addition, the AIA has developed a comprehensive set of construction contract documents developed over more than 100 years of building experience. Using AIA prepared contract documents with your general contractor and subcontractors is a path that has proven successful over many years of experience.

Licensed architects are members of a community of professionals. Most stand behind their work and are typically insured to protect themselves and their clients against financial loss during construction. Many states require licensed architects to have insurance against errors and omissions. A non-licensed designer will most likely not have this insurance protection resulting in a financial loss for clients.

A licensed architect may charge anywhere from 5% to 10% of the cost of the home depending upon the services provided. This might be slightly higher than a non-licensed designer but, the higher level of service and protection provided by a licensed architect is well worth the added cost.

Learn more about custom log home design.

If you are considering building a log home, consider members of the Log Homes Council. The Log Homes Council is part of the Building Systems Councils, a council of the National Association of Home Builders. Members are required to participate in the Log Homes Council’s log and timber grading program. It is important to select a log home company that grades and certifies under the grading rules established by the Log Homes Council. This protects you as a customer and ensures that you get only graded logs and timbers when purchasing from a Council Member. This is a critical issue, as the new International Building Code will require grading and building inspectors may reject logs and timbers which have not been graded.

Log Homes Council members must subscribe to a rigid code of ethics developed to ensure well-constructed, code-complying structures and fair business dealings. The Council is a clearing house for complaints dealing with questionable practices and often times mediates customer complaints and disputes. All Council members agree to provide interested persons with truthful and accurate information and educational materials about log home building systems. The Log Homes Council sponsors research and testing of materials to determine structural and thermal qualities. This information has been critical to engineers and architects as they design buildings with log and timber components. Members of the Log Homes Council are also members of the National Association of Home Builders.

In addition to using the Better Business Bureau, using the Log Homes Council is a great way to narrow your search for a log or timber home company. Organizations such as the Timber Framers Guild and the Timber Frame Business Council are also great resources for researching industry companies. Starting your search with the members of these organizations will ensure that you are shopping the best log home companies.

Now that you are considering building a log home, selecting the right company will be one of the most critical decisions.  Finding the right log home company can be a daunting task.  There are many good companies and, unfortunately, some that are not so good.  Reputation, experience, architectural depth, financial strength, product selection and manufacturing capability are all factors to take into account before selecting a log home company.

The Better Business Bureau is a good place to start.  Check to see if the log home company you are considering is a member and if there are any outstanding complaints.  Dun and Bradstreet is a financial and credit reporting service and can give good information about the financial history of a company.  It is highly recommended that you consider only companies that have financial history reported by Dun and Bradstreet.  If a company is not listed, you may want to look elsewhere.

Consider companies that have affiliations with industry trade groups such as the National Association of Home Builders - Log Homes Council, the Timber Framers Guild or the Timber Frame Business Council.  Many trade organizations, such as the Log Homes Council, establish ethical guidelines to ensure well-constructed, code-complying structures and fair business dealings.     Once you have narrowed the field, we strongly encourage you to visit the companies. Check out their log home manufacturing facilities and talk to their staff.  You will be relying on the capabilities and expertise of the company and it is important that you trust their abilities and integrity. Learn more about PrecisionCraft’s log home design services & manufacturing.

Over the past few years, the log and timber home industry has taken a new turn. Today the industry sees more and more homes combining log elements with timber frame components and conventional framing.

Employing a combination of materials and building styles is referred to as “hybrid” and is often done to achieve a particular design look. Many clients enjoy the flexibility in design that a hybrid log home allows. Below are a few examples illustrating how a combinations of different materials can come together to create a truly amazing home:

• Crested Butte - A hybrid log home design of large stone, milled log walls, and customized timber frame trusses.
• Eagle’s Nest - A hybrid log & timber home; square milled log walls with dovetail corners and custom timber frame trusses.
• Upland Retreat - A handcrafted log & timber hybrid home; handcrafted wall logs and timber frame trusses, posts & roof.

Many designers will use timber and log elements in combination with conventional framing. Of course, the log & timber home purist prefers a more authentic log and timber style construction. But, decorative log and timber elements added to conventional framing can achieve a mountain flavor and sometimes save costs. This hybrid method is seen regularly in multi-unit condominiums and resort townhouses. Framing side wings in combination with a timber frame or log great room makes sense and can save in construction costs.

Log home construction, however, can be very difficult to combine with other types of construction if the log home company doesn’t utilize a non-settling system. If your goal is to decrease the cost to build your log home by mixing logs with framing or post & beam construction, remember to check out the company’s non-settling system.

With any home design, the creativity of the designer will dictate the materials to be used. Find a company that is flexible in their manufacturing so as to accommodate the creativity of your design. Providing your designer with a broad palette of materials including handcrafted log, milled log, timber, framing, glass, stone, steel and other materials creates more opportunity for a unique and creative custom home. The design must come first and the materials must then be able to accommodate.