Building a new home is a very complicated project–even when you hire a builder. You can never have too much information. Builders do not always volunteer all the information they have. Here are some things you need to know.
You Can Get a Pre-Move-In Inspection
Get an independent inspection done before taking possession of your new home. Many people assume that a newly built home is close to perfect and skip this step. Inspections are not expensive and an inspector may find problems–small or large–that can be remedied before you move in.
Get Everything In Writing
Don’t make verbal agreements. Your contract should contain as much detailed information as possible–such as timelines, costs, payment details, specifications, and how any changes are to be addressed. Detailed written contracts help prevent misunderstandings and ensure your new home is what you are paying for.
Do as much research as possible before signing a contract. If the contract and blueprints specify things like types of insulation, roofing materials, floor finishes, paint, etc. you can get some understanding before committing to the job.
Licensed Is Not Enough
In some cases “licensed” may only indicate that someone has paid a fee to the local authority to enable them to conduct business. It does not cover bonding, insurance, or ability. Do your own homework to ensure the builder can provide the home you are contracting for. Inspect previous work and talk to previous customers. Experienced builders should be willing to supply references.
First Price Quoted Is For a Basic Unit
Home prices advertised on billboards and brochures are invariably “starting at” basic house costs. Upgrades and customized options easily add 25% or more. A $400,000.00 basic house can easily become a $500,000.00 house when you start including all of your dreams in the project. Get everything in writing–especially costs.
Change Orders
Changes almost always occur during construction. Some builders downplay the costs–even though changes are often expensive–and added time. You may be told that a change or upgrade adds a few hundred dollars and be asked to sign an uncosted change order. Don’t. A few hundred dollars for an upgraded door, a couple thousand dollars for a bay window, and a few other apparently minor changes can give you a nasty surprise when the final invoice arrives.
Have every change order costed before you and the builder sign it. Builders are in business to make money. Changes and upgrades during construction annoy them and they usually charge accordingly.
You Can Shop For a Lender
Many builders work with a lending company. The lenders often provide competitive rates, terms, and even a bonus of some type. Compare their offer with others. You do not have to use the builder’s lender if you can find a better deal somewhere else.
Do Your Own Inspections
You don’t have to be on the job site every minute during construction, but showing up once or twice a week shows the builder and sub-trades that you are taking a close interest in the progress.
Taking along a friend in the construction industry or a friendly realtor is helpful. Another set of eyes may see something that you miss. You have every right to be onsite. You are paying for all that happens.
Timelines Are Only a Suggestion
Any timeline your builder provides is based on many uncontrollable variables. Weather, permits, supply chains, subcontractor delays, and other factors can conspire to cause delays. Be prepared and don’t move out of your existing home early.
Establish good communications with your builder from the outset of the project. Builders do not purposely delay construction. Most of their profits come when the final payment is made.
