Hiring a Homebuilder

Choosing the correct home builder is one of the most important steps, if not the most important, in the home building process. Ideally you should choose a builder early in the process, preferably before you’ve settled on a site or design for your home. By selecting your builder early you can avoid mistakes in site selection, home design, specifications, features, etc. Home building is a complex process and a great builder can make it simple and easy. The following are things to consider when selecting a builder.

Look for an established builder who has been in business a long time and can provide positive referrals from previous clients. Use the Better Business Bureau to make sure they have no history of complaints from past projects. The internet is a great tool to search for positive or negative information regarding a builder. Should you come across something in your research that makes you uncomfortable be sure and talk to your builder about it. The internet is a great tool however anyone can post anything they like and so it is always good to hear both sides of any discrepancies before you make your decision.

This should be obvious but the reality is that everyone expects quality no matter the amount of their budget. Cost however, is not a direct measure of quality. Good quality is the combining of excellent design with appropriate products and materials that are installed with superior workmanship. The best materials money can buy won’t look or perform any better than less expensive items if they are improperly installed. Basically, expensive finishes and fixtures won’t offset poor application or installation.

You will be spending a lot of time with the home builder you select. The home building process is a very personal and emotional experience. That’s why you want choose a builder you trust and with whom you feel comfortable. The relationship will most likely last a year or more (longer for warranty issues) so be sure you think you can get along with one another for the duration.

Who will be overseeing your project? Will it be the builder or someone who works for them like a superintendent or construction supervisor? If your builder uses other people to oversee construction then you need to know everything about these people as well since they will be the ones who ultimately determine the success of your project, not the actual builder. If a superintendent or construction supervisor will be overseeing your construction you need to ask your builder what happens if that person leaves the company. Who takes over for them and how will they handle things since they won’t be familiar with your project?

Financial stability
This point cannot be stressed enough. The last thing you want during or after your project is for your builder to have financial problems. Don’t be afraid to ask tough questions of your builder. If they are in good financial shape they should want you to know it. There are several things to consider. Do they have speculative homes (spec homes), model homes, or lots in inventory that create financial overhead for them? Do they run their business on a cash basis or through lines of credit or other financing methods? If they do finance their business are they prepared in the event of a slowdown in the economy or other uncontrollable factors? In other words, will they survive and be around to finish your house? If they use a lender for their business ask to speak to them to confirm anything the builder is telling you.

One of the other big reasons you want to make sure your builder is financially stable is that if they don’t pay their subcontractors or suppliers then liens may be placed on your property for non-payment. This can affect closing on your loan when the house is completed or prevent you from selling your home later. Liens must be satisfied and released before either of these things can occur and that means that you might have to pay for them even though you have already paid your builder for them. Ask to speak to some of the builder’s subcontractors and suppliers to see how long they’ve been doing business together and what their payment history is like. In other words, do they pay their bills and do they pay them on time?

Changes and Upgrades
You need to know how changes during construction are handled. What about upgrades or allowance overages? All of these things can affect your financial bottom line so you need to know up front what the costs to you will be.

Be sure and ask your builder to see the warranty they offer before you execute a home building contract with them. You want to know up front what is covered and what is not. Being thorough with the selection process of your builder will ensure you have a great working relationship with them as well as a successful project. Take your time and make sure you are completely comfortable before you make your decision.

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