subject: Top Five Considerations When Hiring A Custom Home Builder [print this page] Deciding to build a custom home - a dream home - is usually a once-in-a-lifetime event, the culmination of a life's work and an expression of a personal style honed through years of experience. It's not like buying or re-doing an existing home, as it is a blank canvas meant for a masterpiece and the owner will be responsible for every brush stroke. A custom home is, without question, a signature piece, marked indelibly with the home dreamer's distinctive taste.
Trouble is, even people who have never built a brand-new home know all too well that the process can be fraught with frustrations. It is nearly axiomatic that on a construction project of this sort prospective owners should add 20% to the bid budget and half again as much time to the proposed schedule. Indeed, the troubles inherent in home building, the cost overruns, the time crunch, and the frustrations have been the subject of several star-studded movies from Hollywood over the years, including: Mr. Blandings Builds His Dream House in 1948, with Cary Grant, The Money Pit in 1986, with Tom Hanks, and Are We Done Yet?, in 2007, with Ice Cube. Interestingly, marital problems are the subplot of each of these movies, obviously another clich axiom involved in such a project.
But it isn't necessary, and an owner building a custom home can fulfill the dream without being in the home construction business. A successful project begins with being prepared. From a variety of home-builder trade associations, home-owner building nightmares and successful dreams and custom home builders in Denver and throughout the country, here is a guide to the top five most important things to look for in a custom home builder:
1. Has this custom home builder built comparable homes in a similar quality level, type of neighborhood, size scale and price range proposed? Nobody wants to be the test case; ask to speak with former clients and to tour properties the builder has done.
2. Does the custom home builder offer general liability insurance and sufficient worker's compensation in addition to being insured and bonded to the appropriate level. Without these coverages the home owner could be liable for any damages incurred on the premises during construction. An insurance agent dealing with these lines of coverage could help in determining appropriate levels of coverage.
3. Does the firm have the financial wherewithal to deal with a project of the proposed cost. Inquire as to how the accounts work and if the builder deposits a payment per project and determine if the client has access to the accounting of said account. Pooled assets covering multiple projects are a sign of potential problems
4. Is the entire project, step-by-step, item-by-item, planned, priced and scheduled completely in advance. The client needs to make literally thousands of choices and decisions involving everything from the wood floorings, cabinets, roofing, stoves, and even stone and lumber, making this a laborious process. While changes do often occur, pre-planning everything minimizes the "change order" surprises.
5. How will you be charged for the custom home builder's services. Many builders employ a "cost-plus" fee structure, but most reputable builders believe this is a built-in temptation to increase costs and lengthen the schedule. The preferred fee structure is called "fee for service," a pre-specified fee, based on time involved, that won't change no matter what the contingencies. Fee for service benefits the home owner as it is an incentive for the builder, and all of the subcontractors, to bring the project in on-time and on-budget.
Of course, there are many more questions to ask of a custom home builder, but if the answers to any of these five inquiries is inadequate there is little need to go any further with that builder. A full-service custom home builder should also be able to introduce a home owner to an appropriate architect, consult on site selection, and assist in the selection of both construction financing and a long-term mortgage at the end of the project.
