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What Should I Consider When Selecting a Home Builder or Contractor?

Selecting a home builder or contractor is one of the most important decisions you can make when building or renovating your home. Deciding on the right home builder or contractor is crucial for ensuring a smooth and successful construction or renovation project. This role will have an impact on your budget, schedule, and, most importantly, the overall craftmanship and quality of this important investment. Here are some essential criteria you should consider when making your decision.

Experience and Reputation

Look for builders or contractors with a proven track record of successful projects. Check online reviews, testimonials, and ask for references to gauge their reputation. Speak with past clients to get first-hand feedback on their experience with the builder. If you are looking at new construction in a new development, the contractor may already be selected by the developer. In that case, research the reputation of the contractor as well as the developer.


Portfolio of Work

Review a portfolio to see if their style and quality match your preferences. This will give you an idea of the builder’s capabilities and the range of projects they have delivered. If you are considering a custom home with a desired aesthetic, it is best to align yourself with a home builder with the same appreciation for your vision. Working with a home builder that gets your vision and design sensibility is a great way to collaborate on a project.


Transparent Budgeting

Seek a home builder that provides detailed cost estimates and quotes. Make sure they are transparent about pricing, including any potential additional costs or change orders. Be concerned with home builders that don’t provide an adequate breakout of costs.

For example, the kitchen could be a line item for $24,000. Don’t assume that is a completed kitchen. Are countertops, door hardware, and backsplashes in that number? A home builder not specifically itemizing those items can create scope gap and it will be up to you to fill in the gap with more funds.


Schedule

Inquire about the expected timeline for completing the project. An experienced home builder should provide a realistic schedule for each phase of construction. Ask questions about how they plan to handle weather and material delays, and what they do when unforeseen conditions arise once the project has begun.


Contract and Payment

Understand the contract terms, payment schedules, changes, warranties, closeout, and dispute resolution procedures. Most lenders will require that the builder provide an expected draw (payment) schedule that shows the breakdown of the project billing. There should be multiple draws at key milestones such as foundations, framing, mechanicals, drywall, and finishes.

For example, there might be five draws during construction. Draw one may include all foundations and concrete work. Draw five may include carpet, tiling and paint. The home builder should submit invoices with the specific payment or draw request. If you are working with a developer, the contract and payment will be different terms with the developer. You should never be required to pay for work that has not yet started.


License and Insurance

Make sure the home builder or contractor is licensed to work in your area. Understand their insurance and what is covered. It’s important to be on the same page on coverage and who is covering what.


Work in the Area

A home builder can have many relationships established in your local jurisdiction. This will give a builder familiarity with the local building codes, permits, and regulations that can help streamline the process and prevent unnecessary delays.


Subcontractors

Often a home builder will have subcontractors providing various scopes of the project. It is appropriate to ask who the subcontractors will be on your project. Researching the subcontractor’s reputation is just as important as the home builder.


Customization

When working on a new build in a new development, the opportunity for customization will be limited. If you are working directly with a home builder, understand their openness to your specific design or customization requests.


Closeout

Understanding the home builder’s closeout procedures is important. Closeout has the most opportunity for disagreement and strain on the home builder and homeowner relationship. It is best to withhold a percentage of the final payment or draw to ensure all punch list items are resolved. It is common for a home builder to have a one-year warranty on the work, and it’s important to understand when the warranty starts. If a home builder does not reference warranties and close out procedures, continue the search for a home builder.


Financial Soundness

This will be difficult to research. Inquiring with previous clients and subcontractors will provide a sense for whether it has been difficult for the contractor to make payments during construction. By taking these factors into account and conducting thorough research, you can make an informed decision and increase the likelihood of hiring a reliable, skilled, and reputable residential home builder or contractor for your project. This will help ensure a successful and satisfying outcome for your residential construction or renovation endeavor.

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