How to Choose a Home Builder
If you’re in the market for a new home, you should shop for your builder as carefully as you shop for your home. Whether you are buying a condo, a townhouse, a house in a subdivision or a custom-built house, you want to know that you are buying a good quality home from a reputable builder. Here are some tips to help you choose a builder.
Make a List of Possible Builders
Once you have thought about the type of house you want, you can create a list of potential builders.
- Contact your local home builders’ association to obtain a list of builders who construct homes in your area.
- Look in the real estate section of your local newspaper for builders and projects. Looking through the ads and reading the articles can help you to learn which builders are active in your area, the types of homes they are building and the prices you can expect to pay. Make a list of builders who build the type of home you’re looking for in your price range.
- Local real estate agents may also be able to help you in your search.
- Ask friends and relatives for recommendations. Ask about builders they have dealt with directly, or ask them for names of acquaintances who have recently had a good experience with a builder.
Is the Builder Licensed and Insured?
Not every state or area requires builders to be licensed, but make sure that you work with a licensed builder in such areas. Ask about the insurance that the builder and his or her trade contractors carry. Make sure that they and you are covered during the building process.
Warranty and Service
One of the top advantages of new construction is that your home itself and most of the products, systems and components it contains are brand-new and under warranty. The peace of mind that comes with knowing that major repairs or a new roof are likely years away is important. In addition, look for a structural warranty of ten years or longer on the home itself, ideally transferable to a new owner should you sell. Also look for a builder who provides prompt and courteous service under warranty and who takes time to explain the proper maintenance and care that any home needs.
Competitive bidding is the process of getting alternative prices from different builders for the same work. Clearly, it’s crucial that the information against which they are pricing is absolutely clear and specific. (Otherwise how can two prices compare?)
I would generally send a project out to four or five builders for pricing. This involves the builder in a great deal of work, and it’s just not fair, in my opinion, to go to more than five. However, when the prices come back, it’s not at all unusual for them to vary between the highest and lowest by 100 percent or more, so it’s well worth going to at least three or four.
Personality and working relationships
Think about the relationship you want to develop a relationship with the builder.
Some clients need to be present on site regularly and want to build up a rapport with the supervisor in charge. Most bigger builders change supervisors regularly and some clients can find that frustrating. If you want to be involved in the project, a small builder may provide a more personal service. You may even be dealing with the owner of the company and this can give complete reassurance.
On the other hand, if you are content to sit back and let things happen, developing a close relationship won’t be as much of a priority and choosing a builder for personal service is less important. It’s vital to get the right builder for your project who will deliver what you want, for the price you want, and with the level of service you need.
A good building broker can help guide you in decision-making, explain unfamiliar terms and conditions, advise what to sign and when and make sure the choice of builder fits your brief.
Let’s talk costs
There’s no point in gathering building quotes first, Paxino says, because many of the builders may not be appropriate for your project.
So do your research first, narrow the field, and only then start asking for prices from the builders who’ve made your cut. And remember: cheapest isn’t always best.
What’s the timeframe?
Anyone who’s had a renovation done or a house built knows that 99% of the time the project will take longer than anticipated.
So getting the most accurate timeframe possible from your shortlist of builders should be a key factor in determining who gets the job.
Most people will be paying rent somewhere, or paying another mortgage until the new house is finished, so you’ve got to factor in extra months of costs if one builder is saying it’s going to take longer. Or maybe they’re waiting until another house they’re building is finished before they can move onto yours
“That should come into play, because your holding costs could add up to tens of thousands of dollars.”