How to Choose the Right Builder

Dream houses wouldn't exist without great builders to bring them to life. But with so many builders and contractors out there, how do you know who to choose? The process of finding the right builder is simpler than you may think—just keep the following advice in mind!

Not sure where to start? A good old-fashioned internet search should bring up company websites for builders in your area. You can also check out:

• Our builder directory - These professionals have years of experience in states all across the country.
• Houzz - Not only can you find builders in your area, but they'll often have plenty of photography of previous projects.
• National Association of Home Builders - Your local chapter of NAHB will have a list of nearby builders on file.

Once you've selected a few builders to consider, it's always a good idea to call your local or state Better Business Bureau to ensure they don’t have any complaints or cases against them. Then start conducting your own interviews!

Consider More than Pricing

Some builders try to rope you in with the promise of a low price or an attractive guarantee. While these seem great on the surface, always make sure to ask probing questions and do your own research. Things that sound too good to be true are usually just that. To avoid trouble with small print or shoddy work, ask questions like:

• What does that price include? Can I see a breakdown of that quote?
• Is that an estimate? If so, what percentage extra should I budget in case something unexpected arises?
• Can you show me some comparable work that you have done? What did it end up costing?
• Can I have the contact information of your typical suppliers/bank/sub-contractors?
• Are you licensed to build in this area? Do you know what it takes to build a house up to code here?

These questions will help you gain insight into how the builder operates. No matter your specific concerns, the key is to find a builder who is transparent and straightforward about budgeting and pricing. There is nothing more annoying (and upsetting) than hearing about surprise costs and watching the total price skyrocket, so ask questions confidently and choose a builder who you are comfortable having this conversation with.

Protect Yourself and Your Investment

A house is generally the single largest investment in a person’s lifetime. You have worked so hard, saved up so much, and searched so intensely for the right one. Now, you need a builder who will do the plan justice and create the house you want. Set yourself up for success by looking for builders with experience relevant to your goal in terms of size, style, budget, etc.

It is also very important to make sure your builder has liability insurance for the project, because if they don't, any losses/injuries that occur on your land could be your problem. You should expect a professional to carry their own policy to protect you as their client, so if a builder doesn't, move on. While you're at it, you can also ask about a warranty to ensure your happiness with the final product. Be wary of builders who either don’t offer a warranty or have tons of exceptions and fine print. You want someone who is proud of their work and will put their reputation behind it.

In order to protect yourself from liability and from being unhappy with the final result, here are things to look into:

• Warranty - Do they offer one and what does it entail?
• Liability insurance - Make sure the builder has their own liability insurance; ask what it covers and confirm the policy with the company.
• Past clients - See if you can contact them like you would any other references, or do a drive-by of their houses.
• Licensing - Consider calling the local licensing board to learn more about the builder.
• Legal action - Do not rely on legal remedies as a safeguard against bad contractors. These can be expensive and take years to settle. Just don’t hire a builder who doesn't meet your standards in the first place!

Signing the Builder Contract

Once you've finally found the perfect builder, it's time to sign the contract! Contracts can be quite lengthy, so don’t be afraid to ask your builder to walk you through, line by line, allowing time to ask questions. You may also want to ask an attorney to review it and explain things for a small fee, just to ensure that a third-party agrees it is reasonable. But no matter what, make sure you read the document in full before putting pen to paper!

As you wrap up this final stage, remember these tips:

• Don’t feel rushed into signing something or giving a down payment to a builder. If they are being pushy, consider if that builder really is the right choice for you.
• Use your judgment when signing anything. Once the contract is signed, there may be a penalty for backing out.
• Ask your builder about the process for addendums or changes to the contract. The majority of legal disputes arise when expectations or understandings aren’t on the same page.
• Request time to review the contract on your own. There is no need to sign anything right then and there.
• Make sure that you involve your bank in these conversations. Funding is key and you want to make sure that there isn’t any confusion. The bank might even approve or deny a loan based on the builder and any past project they've had.

By doing your research, soliciting lots of bids and interviews, and using good judgment, you too can find the perfect builder. As you begin the process, consider making a ‘Builder Binder’ to track all of your research and findings. If it seems overwhelming, just remember that your choice now can really reduce the stress of building later, if you choose your builder well!