How to Select a Home Builder

Selecting a home builder is a very important decision. It will determine the entire process of the home you build and what is delivered.

  1. After looking at several homes the builder has available for inspection which ones did you like the best? Were they similar to what you are looking to build or buy? Knowing the builder has done it before lends credibility to that builder(s).
  2. What are their credentials and qualifications? Having been in business for years is a good sign you will be working with a successful builder but don't discount a new builder who is ambitious and looking to establish their company as a reputable builder as well.
  3. Talk to past clients and ask if they would recommend the home builder based on-
  • Did they get the home they were expecting including the price and was it completed in the time frame promised?
  • Were there any callbacks and was the builder responsive?
  • How were the subcontractors?
  • Would they recommend the builder?

Finding the right builder is a daunting task that requires due diligence. Learning about the builder's credentials and qualifications and meeting past clients is very important but at the top of the list is your impression and gut feeling about the builder. Building a new home is an experience that can be filled with emotion that includes both excitement and stress. Add in the money factor and if you have questions about your builder before you begin, you are destined to have problems. You must find someone you completely trust so finding a builder with the right personality is very important.

Builder Credentials and Qualifications

Experience - Does the builder have enough experience in building that dream home you have discussed so many times with your family and friends? How many of years experience does he have? How many homes were built and what types of homes did he build?

Integrity - Does the builder have a reputation for building quality homes and is the company financially sound? References - Does the builder have solid references from previous clients?

Professionalism - Does the builder have the necessary professionalism to not only work with a number of different personalities in the construction business and business community but also does the builder communicate with you in a professional manner? Follow-up - Does the builder follow up with regard to getting back to you with pertinent information concerning your house?

Design and Creativity - Do you like the previous designs of the homes that the builder has built-in past years? Does the builder have the creativity and the architectural knowledge to design that special fireplace, open stairway or other unique architectural design suited to the area within which you want to build?

Technology - Does the builder keep abreast of the latest technology in the building industry?

Chemistry - Do you and the builder have the necessary chemistry that will make building your home a positive and memorable experience?

Types of Home Builders

Production Builder- A builder who builds many of the same homes repeatedly

  • Advantages- Cost savings. Because they produce many homes they normally have lower costs including the building lot costs and labor. They buy in bulk and therefore get a better deal.
  • Disadvantages- You get what you get. Because they make money by streamlining processes, they don't work well with many customizations.

Spec Home Builder- A builder who builds only a few homes a year to sell.

  • Advantages- You will probably meet the builder. They are more open to making changes
  • Disadvantages- Their cost savings is lower because they don't do the volume. but the quality may be higher as they are more hands-on.

Semi-Custom Home- Taking existing floor plans and customizing them to your specifications

  • Advantages- You will work one on one with an employee of the company or the builder. Customization options are endless. Because the home has been built before the builder will have fewer surprises during construction. because it is an existing plan your design costs will be less.
  • Disadvantages- Semi-custom is semi so your neighbor could have something very similar. While it can be less expensive, many times it may be worth looking at custom construction.

Custom Home Construction- taking a home concept and turning it into drawings and then building it

  • Advantages- It is your home exactly as you design it. While many think of custom homes as higher-end homes, it is not necessarily true. A custom home can be as small and as little cost as you would like.
  • Disadvantages- It takes a lot of work and time on your part because everything is selected by you. While custom homes take more time to build, there is also more opportunity to make changes as the homeowner sees elements they would like to add or change.

A Well Written Home Construction Contract

  • Disputes between parties often involve good faith issues that their contracts do not adequately address, either because the parties did not consider these issues or because they failed to write them in the contract
  • A well-written contract is a critical tool for reducing liability. It should: 1) be a product of the party's negotiations, 2) describe in detail the rights and obligations of the parties, and 3) fairly allocate the risks inherent in the project.
  • Such a contract provides the parties with a mutual understanding of contract terms and conditions, thereby improving the chances that each party's expectations will be met.
  • A well-written contract helps prevent disputes from arising during construction because the parties have settled potentially troublesome matters such as the scope of work, the materials to be used, and the time and method of payment before the project begins.
  • Although a well-written contract requires communication between the parties, it is no substitute for ongoing communication between the buyer and builder or remodeler during the project. Inevitably, during construction, changes may be desired by the purchaser or even suggested by the contractor. All changes should be fully understood by both parties, reduced to writing, and made a part of the contract. Consumers should understand, however, that changes may result in added costs or time or both to the construction process. This is another reason to select a builder or remodeler from the start with whom you can communicate effectively and with whom you are comfortable.

Express Warranty

  • Many builders also include a limited warranty in their contracts. Such a warranty can also help prevent disputes after construction is completed.
  • The warranty, like the contract, should clearly express the intent of the parties. The limited warranty describes the problems and remedies for which the builder or remodeler will be responsible after completion of the project and the duration of the warranty. It also defines the mechanism for addressing disputes.
  • If a remodeler warrants workmanship and materials in a warranty, the warranty should also provide some guidelines or standards against which to judge the contractor's compliance. One of the best sources of such guidelines is Residential Construction Performance Guidelines for Professional Builders and Remodelers.

How to stay within budget when building a custom home.

Many people go over budget when building their new home but how can you get better control?

Not sure of the percentage but most people Build Idaho has talked to go over budget when building a custom home. It is the changes and upgrades that happen while the home is under construction that normally push the line.

So how can you stay on budget?

  1. Do you truly understand what your budget is and what it includes? The first problem is that when construction begins and people can actually see what their home is going to look like including the products going in is when they change their mind. Spend all the time you need researching the budget and the products it includes. Also, visit homes that are similar to yours so you can envision your home. Most homes are not so unique that there are not some like yours. Most home builders build within the same style so you can go see other homes they are building as well.
  2. Take your time. If you are in a hurry, prepare to go over budget and possibly not get the best home possible. Taking your time to visit showrooms, other new homes, tradeshows and viewing websites for information means you will not have done your homework, Obviously, you could spend years looking at products but if you are diligent you can learn enough to confidently understand what your home will look like and the products going in, to the point that you get excited. The more custom you intend your home to be the longer it will take and obviously it depends on how much time each week, or month, you have to research each.
  3. There are three types of new homes- Move-In Ready, Semi-Custom and Custom Homes. Move-In Ready means that the home is complete or you are going to buy a specific model from a production builder. These homes are pre-defined as to what they include and what upgrades are available. A semi-custom home is taking an existing floorplan and either building that or with minor alterations. A custom home is starting from scratch, so creativity is endless. You can imagine how budgets can get out of hand as move from set prices to custom homes. FYI, production builders normally offer a better price per square foot because their costs are different based on their scale and the fact that it is a streamlined process.
  4. How much feedback and advice do you want or need? The more friends, family and consultants you involve the more money you spend. Not to say you should not seek out advice but you may want to limit how many trusted advisors you have!