Working With A Custom Builder
Recent news has highlighted horror stories about problems with builders, poor quality, warranty items ignored and building sites abandoned half-finished. Most of this news is at the national level. The vast majority of developers in Colorado are both professional and capable. You can avoid a bad experience by knowing how to choose, manage and communicate with them. Here are ten tips to help you lay a foundation for a good relationship with your builder.
- Don’t approach too soon. If you’re planning to buy a new home, it may seem logical to start by contacting a builder, but don’t be too hasty. They are good at pricing once they know what you want. Asking for a price before you have any drawings or detailed information about your home plans is bound to lead them to tell you what they think you want to hear. My advice is to approach builders only after you have a set of drawings and a list of what you want and don’t want. If you don’t, you may end up basing the project on a figure that could be well under the actual cost.
- Consider what you want in a home and research builders with those skills. A luxury home builder must be organized and experienced. You need to see other homes they have completed and that your home is on par with their end product. They will usually have multiple managers, a well-organized back office, and teams that can operate around the clock. They produce exceptionally high-quality products quickly. These builders tend to be expensive. At the other end of the spectrum, some small owner-manager builders do a lot of the work themselves. They work on-site and organize everything from their cell phone. With low overheads, a developer like this should be much cheaper. On the other hand, the level of service, organization, and speed may not compare. You’re looking for the most appropriate balance of low price, high quality, and a good team. You’ll likely never get the best of all three, but it’s important to decide what will be the best fit for you.
- Determine whether you need a specialty builder or a general builder. An excellent general builder may be suitable unless the work you want is unusual. For example, a good general builder is perfectly capable of converting an attic or finishing a basement. You can go to a loft or basement company, and they may do as good or better for a lower price. The most important thing is to find someone who will do good work for the right price. With sharp design, a good builder can coordinate the right people (cabinet makers, electricians and so on) to build what you want.
- Your best bet is a builder as your single point of responsibility. Rather than using one general contractor, you may see it wiser to try to save money by directly engaging separate tradespeople such as framers, drywallers, electricians and carpenters. While it’s true that a general contractor will take a small slice of cost from the subcontractors, I would argue that this money is well-earned. Managing and coordinating the separate trades on-site needs lots of mettle and experience. I’ve seen lots of people who try to do the coordination themselves. They got into a horrible mess and ended up with a botched job that goes over time and budget. While it can work to pull out certain specific and well-defined parts of the work (for example, laying the carpet), I strongly recommend using one building contractor who will take responsibility for the entire project.
- Let your builder manage the project. It’s your builder’s responsibility to make sure that the right people in the right numbers are on-site at the right times and that they have the necessary materials to do their work. It’s important that the builder is allowed to run the project on a day-to-day basis. If not, there can be blurred responsibility if things go wrong. So choose a professional and let that person do his or her job.
- Be specific. I can’t emphasize enough how important it is to be specific. A set of drawings or architectural plans is a good start. Is structural detail paramount? You must make your needs and wants clear to the builder or project manager. In my opinion, you need structural calculations done by an engineer before you ask for a price. Beyond the drawings or plans, you must make clear exactly what the builder is being asked to include in the price. If the builder is also your supplier, then exactly which materials are selected and what is their quality? If you want to choose tiles yourself, who is supplying the adhesive and grout? Unless all these things are clear, there’s potential for misunderstandings and arguments over money once the work begins.
- Embrace bidding. It is important to have competitive bidding between the builders you are considering. The process of getting alternative pricing from different builders for the same work. It is crucial that the information given for their pricing is transparent and explicit. I recommend sending your project out to four or five builders for pricing. Pricing involves lots of work. It’s not fair, in my opinion, to ask for more than five bids. When the prices come back, it’s not at all unusual for them to vary between the highest and lowest by 100 percent or more. Make sure to compare the quality of materials used before making your final decision.
- Understand the importance of a building contract. A construction contract is an agreement between you and the builder for a set amount of money to deliver the home as planned and within the time agreed. There are many forms of a contract. The one that I most regularly use for residential projects has drawings or plans and schedules attached to the contract. Make sure you know what is included and what is not. The payment terms must be agreed to up front in the contract. The important thing the contract does is clarify the “what ifs” —such as, what if the work changes along the way? What if it takes longer than agreed? Ideally, once signed and filed, the contract isn’t needed again because everything has gone smoothly. But that’s because everyone knows it’s there in the background.
- Consider who will do the rough-in and finish work. After your foundation is complete, framing begins. With the kitchen, bathrooms and laundry rooms, the rough-in involves bringing the waste, plumbing, and electrical services to the right places. Plumbing pipes and electrical conduit and cables are installed in walls, under floors and are left poking out. Walls are then drywalled, textured, and floors laid before the finish work. The finish work is where the cabinets, appliances, faucets, light fixtures, tiling, and trim are complete. Finally, connecting the pipes and cables are finished. It may be that you ask your builder to do both, but it’s not unusual for the finish work to be done by the person who supplied the kitchen or bathroom. They will work perfectly as long as all parties understand in advance exactly what is (and is not) expected of them.
- Make a comprehensive inspection list. More arguments happen at the final stage than at any other time in a project, so it’s important to be ready for the common pitfalls. When the main work is going full tilt, everyone tends to be happy. At the end of a project, there are typically a thousand small items to attend to, requiring an array of tradespeople. These finishing touches are both challenging and expensive for the builder to organize. Combine this with the fact that you can see the finish line and you desperately want the home ready after a long wait, and frustration often boils over. I highly recommend hiring a professional home inspector to evaluate your home from top to bottom. Trust me; this is money well spent. Go through the inspection results and agree on one comprehensive list. Of course, additional things may come to light after closing. That is where the warranty comes in.
My best advice is to be organized, establish a realistic budget and stick to it and communicate clearly your expected timetables and finally, give the builder the space to do what’s needed. When it comes to inspection at the end, check for anything not completed or not completed as requested. The builder should rectify the issue. The key to working with a builder whether a development or custom, is to establish a realistic budget and stick to it, even when higher-cost options entice you. While most buyers realize that additional customization will increase the home’s price, unexpected costs can take you by surprise, so it pays to do your homework.