How to Choose a Builder That Won’t Bankrupt You
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I hear it every time. It’s the question ten out of ten people ask me when I tell them I design custom homes: “Oh? What builders do you work with?”
Many people who are considering building a new home think about builders before they think about the architect, the house design, decorating, building lots or anything else.
Why? Because ultimately, the builder is the key player. He or she is the captain, the person who manages the entire building process for you and the person to whom you’ll be writing the really big checks.
And—most importantly—because everyone knows that the builder can make or break a project.
But how can that be? Wouldn’t any builder you choose be working with the same set of plans? Don’t all builders have to build to the requirements of the building code? Don’t they get the same prices from their suppliers? Doesn’t your building contract spell out exactly what the builder must do?
The answers to the questions above are: Yes, yes, no and maybe. But those answers have almost nothing to do with the success of your project.
Let’s be clear here–the world is full of excellent builders, great builders and, in fact, a few I know who are extraordinary. I’d go so far as to say most builders I know do everything in their power to provide a quality service and product to their clients.
Those are the guys you’re looking for.
But there are also guys to avoid.
Remember that neighbor of yours, the one whose two-month kitchen remodeling took a year? And then the granite countertops cracked and had to be replaced? What about your cousin who was quoted $300,000 to build his new house and it ended up costing him $400,000?
When it is, it’s because you:
A) Didn’t thoroughly research your builder’s credentials
B) Didn’t prepare a detailed set of plans and specifications
C) Tried to get high quality work for a low quality price
Differences in Expectations
Differences in expectations are the root of all evil in the design and construction business. I had an interesting conversation with a young couple at a party a year or two ago; they’d built their dream home with a local builder and everything had gone wrong. It took too long, it cost too much and the builder declared bankruptcy before the house was done, throwing the whole project into chaos.
What a shame!
I knew of the builder and I knew of his reputation (he’d declared bankruptcy several times before) so I asked the couple what had convinced them to go ahead with him given his checkered past. “We didn’t know,” they answered. As it turns out, they hadn’t checked him out at all. The new model home and the sign in the yard was enough to convince them to hand over $500,000. I’ll bet they spent more time researching their flat-screen TV purchase.
That builder, by the way, has fled town and has set up shop in another unsuspecting suburb in another state. So here are lessons to be taken seriously.
- Just because the builder has completed projects successfully before, don’t expect that yours will be successful, too. You must thoroughly research the qualifications and financial history of anyone you’re going to hand over hundreds of thousands of dollars to. I can’t stress this enough–do it!
- Don’t sign a contract without a full set of detailed construction drawings and complete specs. This is the cause of most problems–and one of the chief jobs of your architect. The neat features and details you saw in the model home won’t be in your home unless you specify them in the construction contract. That’s what “specs” are—a listing of all the finishes, fixtures and features that will be in your home. Without that, you can only hope you’ll get what you want.
- Don’t automatically pick the cheapest guy and hope that he’ll deliver a quality product. There’s a reason why he’s cheapest, and it’s not because he’s giving away free granite countertops. I’m constantly amazed by how many otherwise intelligent and accomplished businessmen are drawn to the lowest bidder and ultimately to disaster, like a moth to a flame.
How to Find the Best Builder
Start by building a nice, long list of potential builders from:
- The recommendations of your architect
- Friends and neighbors who’ve had good experiences
- Building-products suppliers–they’ll know who has good credit and who doesn’t
- Real estate brokers who work in your neighborhood
- Local financial institutions that lend to builders
- The Better Business Bureau
- Angie’s List
- Your local Home Builder’s Association
You’ll probably hear a few names repeated from different sources. These four or five builders should become your short list. Set up a meeting to visit each one at their office. Talk to them about their approach to building. Look for indications that they’re interested in what you want rather than just getting you to sign up with them. Ask lots of questions.
Ask for references and call every one. Many of my clients ask for references, but very few actually call. Take the time to call references and ask questions. You’ll be surprised what people will tell you, good and bad!
Finally, visit several new and older homes they’ve built–without the builder along–and ask the owners about the experience of working with them including their experiences with “service after the sale.”
Look at the quality of the construction of the home. Take your architect with you if you don’t know what to look for.
It’s a lot of work, but you’re spending a lot of money. Protect your investment and your sanity by finding out everything you can about the builders you’re considering.
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Richard Taylor is a residential architect based in Dublin, Ohio and is a contributor to Zillow Blog. Connect with him at http://www.rtastudio.com/index.htm.
Note: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinion or position of Zillow.