Recently, I have had a handful of friends build new homes. As a former construction loan lender, I am always interested in hearing the experiences of different consumers in their quest to build their dream home. After all, the great thing about building your own home is that you can customize it to your own liking and everything is NEW! Of course, this can potentially come at a cost depending on the current market while building. Right now, building costs are higher than they have been at other times. For example in my area, it is more expensive per square foot to build a home than to purchase an existing home. However, one area that is often overlooked, particularly by those that have never built a home, is the potential stress involved in the building process. Whatever do I mean? Well, I always try to be transparent when talking to individuals or couples that are thinking of or beginning to build. I always say, please be prepared for things to go different than you plan because they always do, even with the best of builders. Rain delays, stolen supplies from the worksite, permitting issues, increases in costs, things look different than you thought and then you put in change orders. Of course, those change orders cost money. My top 2 tips for building a home are to pick the very best builder based on comprehensive research, and ALWAYS budget for cost overruns.
The first tip is VERY important. There are so many things that can go wrong during the building process, so it is critical that you choose the right builder. So how do you pick “the right builder”.
First of all, you should interview at least 3-5 builders. I suggest 5 at a minimum. So often, I hear someone say that they chose a builder because their friend/family member referred them and they never spoke to anyone else. Did they get the best deal and quality? Well they will never know how to compare, because they never spoke with anyone else. Talking to a number of builders will allow you to compare/contrast builders in your market. Be very clear with the builder about what you want from them. I recommend that you consult with friends and family that have built custom homes or reach out to reputable realtors for referrals. Don’t rush this process. Take your time to choose the right builder.
Secondly, you will want to get references from past clients. I would suggest at least 3 references. I would call the references and also ask if you can see multiple homes that they have built. With regards to the references, I recommend that you ask if the work was completed on time? Were they satisfied with the quality? Did the builder complete the punch lists in a timely manner? Once the home was built and they moved in, were there any problems? If there were problems and they called the builder, was the builder responsive and did they fix the problem. Did the builder come in at budget or was it grossly over budget? You will want to feel confident that you have a builder that is responsive and does good work.
Thirdly, choose an experienced builder. Make sure that your builder has built homes and that you are not a Guinea Pig. Building a home is very expensive and you want to ensure that you are working with an experienced professional. Have they built a similar home before for a client? You will not want to build a million dollar home with a builder that has never built a luxury home.
You will also want to ensure that you are comfortable with your builder’s communication style. Is the builder listening to you? Is he/she answering your questions and are they patient with you if you don’t understand something? Are they timely in their responses? If they are not highly responsive, this is a huge red flag as you don’t want an unresponsive builder as you begin to build.
It is very important that a builder is transparent. Is the builder giving you comprehensive line item budgets? Are they being specific in what type of materials they use (e.g. grade of granite, brand of appliances)? Are they explaining the relationships they have with other contractors working on your home if applicable? Do they have proper licensing and insurance? What type of warranties are offered? You will want to ensure that you choose a builder that discloses these types of things and is honest.
Lastly, please remember cheaper is not always better or best. If there is a large disparity in quotes to build, dig in to see why there is a difference as it could be the quality of building materials.