January 4, 2012

How do I choose a home builder?

You will have to live with the decisions you make regarding the construction of your new home long after the builder has gone. You will find the few extra hours you invest in the process will assist you in making a wise investment and help insure your satisfaction.

Before You Begin Your Builder Search

Just as with buying or selling an existing home, building a new home can be a complicated process. Fortunately, there are steps one can take to avoid costly problems and unsatisfactory results. At the same time you can provide more input to achieve the outcome you want. First, as with an existing home, you need to evalu­ate your finances, needs and preferences. Then, we suggest you become involved with choosing materials, determining amenities and ultimately commun­icating those decisions with each builder who is bidding on the project.

Kill Two Birds with One Stone

A side benefits of researching your materials before you chose a builder is the folks that answer your questions about materials will also have insights on contractors and real estate agents. Code administrators can be a source from an “on the job” perspective but may be unlikely to share. One question I would ask suppliers is this, “Who do you believe are the top three builders in the area, and why do you think so? Then I would write down the answers. After a few visits to the supply houses, a pattern will begin to emerge. Remember, just as real estate agents are not equal, neither are  supply houses and subcontractors. Their work product and their pricing on identical materials may vary. Will your builder want to choose his own suppliers? Finally, we urge you to take extra care and time when selecting your builder because like everyone else in the process, they are not created equal.

Assessing My Home Building Situation

1. What can I afford? I suggest  getting at least two conservative estimates of your present home’s fair market value then pre-qualifying with a lender. (These contacts will also have suggestions on which builders to use – keep in mind some people could have some sort of bias or tie-in conflicts)
2. Have I selected a site? (don’t underestimate the importance of this decision; the general rule is to find the lot first and then design the home to fit the lot)
3. Will the location I am interested in building restrict the selection of a builder?
4. Are all key family members in agreement on philosophy, design and costs?
5. Do I have a set of plans for my new home? Many lumber yards will draw your plans for a refundable fee when you buy the lumber package from them. Be aware there are difference in opinions of what information should be contained in a plan or blueprint.
6. Do I have to sell my existing home before I can make a decision?
7. Do I have a list of preferred amenities and their costs?

Research Works

Now that you’ve made some preliminary decis­ions it is time to do some research and then weigh all your options. You will be able to formulate your opinions after receiving information from lumberyard salespeople, architects, real estate brokers, and various other suppliers or referrals. It is  essential to remember, however, that there is more than one right way to build a home. The idea is to find the right way for you.

Comparing Cost to Benefits

Compare the preferences and philosophies of each builder and consider the advantages and disadvantages of their opinions. For example, 2×4 and 2×6 construction are both considered acceptable framing methods. Compare the short-term savings against long-term confidence and weigh the cost of attractiveness against function. Remember, the builder’s preferences may not coincide with yours. By having an idea of cost and understanding specific benefits of building methods and materials, you will have more confidence in understanding the overall project. Being prepared will help you avoid delays and last minute changes that can be expensive. Builders agree the project usually does not go as smoothly when the consumer has not invested enough time evaluating their needs and their budget. When changes are made after construction begins, costs go up and so does the pressure.

Finding A Building Plan

When asking for bids from builders it is your responsibility to communicate your preferences clearly. Written plans and specifications help minimize communication problems that can sometimes occur and will insure you are com­paring apples to apples. Effective plans include all room dimensions, all outside elevations and all structural components including foundation specifications. Plans can be obtained from plan services, architects, lumberyards and builders. Specifications are a list of the materials that the home will be constructed from, and this list influences the total cost tremendously. As an example, carpeting grades can quadruple and appliances can be even more! While all builders have their own format they will share with you, here is an example of a specification list. A reputable builder will appreciate your preparation and involvement. The key is to find the right builder for helping you meet your requirements.

Now Talk With Builders

Here are some legitimate questions to ask your builder candidates. it is helpful that you ask plenty of questions before actually hiring a builder because philosophies regarding service, workmanship, value and efficiency can vary immensely. After all, you will spend considerable with them (Unless they hand the job off to others. If having the builder on the job is essential to you, bring that question up as well).  To help you with this important decision, we have developed the following questions:

1.   What is your policy on service after the sale and do I receive it in writing?

2.   How long do you guarantee your workmanship?

3.   Do you have a “service reserve” built into the bid, if so, how much is it?

4.   How do you control your sub-contractors if they have to come back after completion?

5.   Is the sub-contractor work guaranteed, if so, by the subcontractor or by you?

6.   What is your policy on change orders?

7.   Do you guarantee a completion date, if so, how?

8.   Are you licensed, if so, by whom and what are the requirements?

9.   How long have you been in the business and how long on your own?

10.   Can you provide me with names and phone numbers of the four most recent homeowners you built for?

11.  Do you have a finished home I can see?

12.  Do you have insurance, liability and workman’s compensation?

13.  May I see an example of the contract and specification sheet that I will be asked to sign?

14.  Is clean-up included in your bid? What does your clean up include?

15.  Will you provide me with an itemized statement, and if so, how often during construction?

16.  How do you handle lien wavers?

17.  What sets you apart from your competi­tion and why should I choose you?

18.  Can I choose my own suppliers?

Weigh the builder’s answers against what is necessary to you and what is appropriate under your circumstances. Then, utilize the information you’ve gathered to make your final decision.

Time To Decide

You will have to live with the decisions you make regarding the construction of your new home long after the builder has gone. You will find the few extra hours you invest in the process will assist you in making a wise investment and help insure your satisfaction.

Our efforts to improve the way real estate is bought and sold has been inspired by the experiences, both posi­tive and negative, of the real estate con­sumer. I sincerely welcome your feedback because with your help, we can improve the process for every consumer.

We want your new home project to be a successful one. Go to the Homebuilders web site for more information on new construction.

Ask me your questions. I will answer them.