What to Expect When Hiring a Builder for Your Custom Home

When you set out to build a custom home you are going to meet many new people along the way. These people are going to become critical partners in the home construction process.

Who are they?

Well, we already know how important an architect is to your project from last week’s installment. And this week we are going to look at an equally important role – the custom builder you choose. Hopefully, you will not enter these relationships lightly because the person you choose is critical to the success of your project.

So we are going to continue our series on “What to Expect Building a Custom Home” with hiring the right builder.

Why Hire a Builder

Unless you are a super ambitious person, with a lot of free time and vast understanding of construction, building codes and ordinances you are definitely going to want to hire a custom home builder. The custom home builder will be there to manage the most critical aspects of the process so you don’t have to.

According to the Guide to Hiring a Custom home Builder there are several roles the builder will play to make the process of building your custom home much easier. This includes:

Working with your bank or mortgage company to track cost and collect payments, and process lien requests
Acting as liaison with building inspector, local jurisdictions and other members of the construction team like your architect or designer for approvals, inspections and the like
Obtaining your certificate of occupancy
Coordinate the ordering, approval and installation of all building products for the home
Review the home prior to completion to look for any issues and coordinate with subcontractors to repair them prior to closing on the home
Potentially offer educational info on the operation of the home including maintenance, warranty and operation

A good custom home builder/general contractor will have a vast knowledge of all aspects of home construction and will be able to help you make the right choices, and oversee the project to help you achieve your goals.

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How to Find the Right Builder

Sometimes to find the right builder all you need to do is ask. If there is a good builder in your area chances are other people have used that company and if they enjoyed their experience you will probably get rave reviews. But if you don’t have that luxury, or perhaps you are building a home away from home, there are other resources you can start with. The National Association of Home Builders (NAHB) is a good place to start as they provide a directory of home builders around the country. You can also try your local yellow pages or town office and may have builder names on file.

Narrowing Down your Choices

When it comes to making a final selection for your builder it is important to set up multiple interviews with the builders you are considering. There are three primary goals during the interview process.

First, help the builder understand the type of custom home you want to builder, and make sure he has experience with that size or style of home, or even the particular area or lot you are planning to build on.

Second, collect more information on this builders experience and reputation. In this Checklist for Finding and Hiring a Builder or Remodeler, the NAHB recommends that you gather the following information on each builder you are considering:

Does the builder you are considering have a permanent business location
Do they have a good reputation with local banks and suppliers
How long have they been in business? The NAHB reports that it can take 3-5 years to establish a financially sound business so considering builders with more tenure can give you greater confidence that they can financially support the process of building a custom home, and they will be around after the home is complete
Check with the Better Business Bureau to see if there have been any complaints
Verify in writing the level of workers compensation and general liability insurance
Collect names of past customers and seek out a referral from some past customers
Set up an appointment to see the builders previous work and look for quality and craftsmanship

Third, develop a rapport with your builder and ask yourself this question – will I be able to see and work with this person every day for the next 9-18 months.

Once you collect this information you should be able to narrow down your top choices to 2-3 names.

Your Custom Home Building Estimate

It is a good idea to narrow your choices down to 2-3 rather than just going with one option. Even if you decide to go with your favorite one in the end, being able to compare building estimates can help educate you and help make sure you are getting a fair price.

The process of collecting estimates is something you really want to take your time with because you can get caught in a budget that is either not comprehensive enough for the home you desire, or over inflated with things you really don’t need. Before you can get a quote you want to make sure you have put together your wish list and binder of favorite things that we recommended in our first post. How will the builder know what to include in the estimate without this information? For example, maybe you want wide plank engineered hardwood flooring but your builder has created an allowance for only 2 1/4″ strip oak floors. This means that when it comes to order the wood floors you want, you’ll have to come up with the extra money out of pocket or settle for a floor you really don’t like.

You may also have the convenience of working with a custom home builder with a design center in house. This can help you narrow down your choices, but keep in mind you should not feel obligated to use these products. Remember you are building your custom home and you have to live there once it is complete.

Either with your wish list or the design center, your builder should have all the information they need to prepare an estimate. Although it takes time, it is important to go through this estimate in detail, especially if you are torn between builders. If one is much higher than another in a particular area find out why. You may discover that the higher priced item like in-floor radiant heat, insulation or windows have certain advantages that appeal to you over the long term. After all your custom home is something you will hopefully enjoy for many years and through many generations. It is also important to understand that no matter what estimate you put together and approve, you want to expect at least a 10% overrun due to change orders and other incidentals that may come up through the process.

Final Decision

Once you make a final decision it is important to get a detailed contract in writing and keep this on file for reference throughout the project. It will ensure you get the products specified and/or requested. It will also give you something to reference back to during the inspections process. You should review all contracts and agreements prior to accepting the occupancy permit and providing the final “sign off” on the home.