Building a Home: How to Pick a Contractor

by Steve CookAugust 5, 2016

Hiring the builder that will construct your new home is by far the most important decision you will make during the entire process. He or she will be your quarterback, your resident expert, your educator, your organizer and the one whose performance will determine whether your home is built on time, within budget and to the quality that you expect. Because your home is the biggest investment in your life, it’s important to choose the right builder.

Begin your search for a builder who will serve as your general contractor by understanding what the job entails. As in other businesses, many builders specialize in different aspects of the building process. Some provide design as well as construction services. Others do mostly remodeling projects rather than new construction. Some are known for a particular size or style of home that may or may not be what you are seeking. Some builders are more expensive than others.

Image of Contractor working on window in new home

Inventory your needs and priorities

Before you can find the right builder to meet your needs, you need to define your needs as concisely as possible. Answer these questions to create an inventory of your needs:

  1. What can you afford? Be realistic about the maximum you will spend. Get preapproved on financing and be comfortable with the amount of debt you are planning to assume. Can you save money by selecting less expensive materials or making design changes that could save money? Would you lengthen your construction time table to reduce costs?
  2. Do you know what you want? Have a clear concept of size, amenities, style, location and site preferences, design desires? Have you set priorities to make clear what is most important to you and to help you make decisions during the construction process? Does your family agree?
  3. What services will you need? Do you need design services or do you already have an architect? Do you have a site or do you need help finding one? Do you need a builder who can deliver site preparation, including permitting approvals?
  4. What is your timetable? Have you made have allowances for unforeseen delays, such as material shortages, labor shortages, unavailability of subcontractors or inclement weather?

Do your due diligence

Begin your search by identifying homebuilders in your market that have the capabilities and experience you seek. Make a short list and do some basic research to narrow down the candidates.

  • Check to verify state license/registration, which can easily be done on state and local government websites. Also check each builder’s status and determine if they have had any infractions or bond problems.
  • Make sure any builder you are considering has both liability and workman’s compensation insurance.
  • Check your local county court clerk’s office for any pending lawsuits against your prospective builder.
  • Check local chambers of commerce and consumer sites like Angie’s List and Yelp. Check to see if a builder is a member of local and state trade associations.
  • Look at some of the houses built by the builders you are considering. Look inside and out and talk to previous customers and subcontractors with whom they have worked.
  • Ask for a copy of each builder’s standard contract and get a professional to look at the contract. Many builders use different contracts. Check the fine print to make sure it is fair.
  • Interview your prospective builders and look for candor, trust, excellent communications skills and good chemistry. Ask tough questions. Gut feelings are important. You have spent a lifetime learning how to read people. Don’t ignore that lifetime of experience now.

House under construction

Questions to ask

Here are some standard questions to begin your interviews with builders. Add you own to make sure you cover the bases that are important to you.

  1. What is your policy on service after the sale and do I receive it in writing?
  2. How long do you guarantee your workmanship?
  3. Do you have a “service reserve” built into your bid? If so, how much is it?
  4. How do you control your subcontractors if they have to come back after completion?
  5. Is the subcontractor work guaranteed? If so, by the subcontractor or by you?
  6. What is your policy on change orders?
  7. Do you guarantee a completion date? If so, how?
  8. How long have you been in the business and how long on your own?
  9. Is cleanup included in your bid? What does your cleanup include?
  10. Will you provide me with an itemized statement? If so, how often during construction?
  11. What sets you apart from your competition and why should I choose you?
  12. Can I choose the suppliers?

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Happy house hunting!

About The Author
Steve Cook
Steve Cook is editor and co-publisher of Real Estate Economy Watch. He is a member of the board of the National Association of Real Estate Editors and writes for several leading Web sites, including Inman News. From 1999 to 2007 he was vice president for public affairs at the National Association of Realtors.
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