Choosing the right builder is as important as the home you build. The primary goal is to find a reputable and respectable builder who will deliver quality and meet your expectations. The following criteria can help you through the process of selecting the right custom homebuilder.

Get Meaningful Recommendations

One of the best ways to find a builder who meets your needs is by speaking with homeowners who have recently completed the building process. Friends, family, real estate agents or architects are good places to start. Your local or regional homebuilders association is also a good source for recommendations. Most associations will be hesitant to recommend one builder over another but they can always provide a list of builders who are local and in good standing.

Research, Research, Research

Before choosing a builder, ask for a complete list of references. The best list is the builder’s most recent clients, with projects both under construction and completed. Many custom home builders (the details of which are below) maintain strong relationships with past homebuyers, so you can set up an appointment to visit homes they have previously built and speak with the owners. Most homeowners are happy to share their building experiences and give advice. Questions to consider are:

 Are you happy with your home and quality?
 Did the builder do what was promised in a timely manner? Were they punctual?
 Did the builder listen to your requests and needs? Was the builder responsive to your needs?
 Would you build another home with this builder?
 How is your overall happiness with the home?
 What are some of the typical problems that arose and resolutions to those problems?

When examining a home, inspect details such as the quality of finish work, paint, flooring, cabinets and exterior materials fit and finish. If the home is under construction, also inspect insulation and the HVAC system. Building a home requires attention to detail and many different workers all specializing in different areas. Many builders assign a project manager or a superintendent but most of the work is usually done through subcontractors.

Meeting with Prospective Builders

A rule of thumb is to speak with at least two or three builders. Be prepared to invest the necessary time to have thorough meetings with each builder to understand perspectives on the home building process. There is much to discuss to ensure you have a positive building experience. Remember the builder has a vested interest in the construction of your home too and both of you will expect to see progress from the first meeting. Below are topics to discuss during those meetings:

 A current resume of projects with similar scale and detail
 Estimated time frame
 Organizational/time management skills
 Expectations for both parties
 Preferred contact method and frequency
 Description and understanding of how construction will progress

Below are builder-specific questions to ask during the meeting:

 How many years have they been in business? On average, how many homes are built annually?
 What do they have to offer that other builders may not?
 What are the major energy-saving features of the homes they build?
 Do they specialize in production homes, custom homes or both?
 What are the standard features their homes include?
 Who will oversee the construction of your home? Who will you contact with questions?
 How and when you can make changes or upgrades before and during construction?
 How and when will the final price of the home be determined?
 Who absorbs increases or changes in materials or labor costs?
 What is the process for inspection at key points of construction, at final walk-through, and to address any matters that need to be corrected or finalized?

A face-to-face meeting is important because you are interviewing them as much as they are interviewing you. Expect the builder to be professional and willing to take the time to earn your trust by answering your questions. The builder you choose must be someone you can work and communicate well with over an extended period of time. Construction projects take anywhere from six to twelve months. Once you feel you have found a potential builder, only then provide a copy of your plans to initiate a bid.

Fixed Price Vs. Cost-Plus Contracts: How to Choose?

While meeting with potential builders, ask for a sample contract to review. All builders do business differently so look at the contract to see if it is a Fixed Contract or a Cost-Plus Contract. The contract will specify who absorbs changes in costs and typically what the allowance amounts are. It is critically important to review the contract thoroughly because these documents are sometimes detailed and sometimes are not. Although both types of contracts have pros and cons, each can lead to a successful build when dealing with an experienced, honest builder.

Fixed Price Contract — A Fixed Price Contract is an agreement to construct your home at a set price. It includes both the cost of materials, labor and the builder’s profit. An advantage of a Fixed Price Contract is the cost is set before construction begins. This is especially important if the build is done on a budget. Under a Fixed Price Contract there is risk to the builder that the costs will be greater than the price. To mitigate this risk the builder may overestimate certain costs or choose cheaper materials to protect against cost overruns cutting into profits, especially in an inflationary environment. To that point, it is especially important your contract specify what costs can increase, what type/grade of materials are to be used and how different areas throughout the interior and exterior will be finished. This type of contract is more typical with production builders or when you select a stock house plan through a design-build arrangement.

Cost-Plus Contract — A Cost-Plus Contract means the price to construct your home includes both the cost of materials and labor plus an additional fee, typically designated as profit or overhead. Your contract will define the amount of profit or overhead as a percentage of the totals costs or a fixed dollar amount of profit. With a Cost-Plus Contract it is critical the contract specifies in great detail how the additional fee will be calculated. For the builder, the Cost-Plus Contract provides the security of a guaranteed profit that won’t change even if there are increases in labor costs or material costs. For the buyer, this contract offers a higher quality finished product since the builder has no incentive to cut costs on lower end materials to increase profits. This type of contract is more typical with custom home builders or when custom plans are drawn by a designer or architect.

Warranty

Warranty — One advantage of a new construction is your home and components are under warranty; most builders warrant for one year. Look for a structural warranty of 10 years or longer on the home itself. Also, make sure your builder provides prompt and courteous service under the warranty, and takes time to explain the proper maintenance that all homes need.