When building a custom home, there are some important things to consider. Remember, if you choose to be represented by a realtor, they will represent your interests, can save you money, time and frustration, and their brokerage fee is paid for by the builder.
Whether you choose to have representation or not, there are several vital steps you and/or your realtor should take before even "breaking ground."
Choose Your Builder
The best way to find a builder is through a referral from a trusted source. Should this not be an option, check your city's Homebuilder's Association for a list of builders. They will be members of this organization and subscribe to their code of ethics.
Make appointments with each builder to see examples of their work.
Call the Better Business Bureau to see about any complaints filed against the builder, and, more importantly, how any problems were resolved.
Call the Registrar of Contractors to ensure the builder has a license. Get their license number and investigate their reputation.
Find out who the builder sub contracts with, and repeat steps above to determine the sub contractor's credentials.
Meet the builder's team. Who is supervising the construction of your home? Do you want to use the builder's architect, or do you have someone else in mind? If so, will the builder work with that architect
Find out the builder's track record on completion date.
Discuss pricing very thoroughly. Understand that, from start to finish, pricing will be a six to twelve month process. Find out if this builder honors today's prices or adjusts for inflation. If so, is this adjustment included in their initial proposal?
Find out how much time the builder will set aside for your needs. Do they charge you for additional time? Is their time included in their original price estimate?
When interviewing builders, become very comfortable in your knowledge of their flexibility. You will be making many changes throughout the process of building of your custom home. Whether materials are no longer available, or you just decide to go in another direction, it is important to know that the builder will be flexible. Discover if the builder has a set cut off date to even consider any new changes. Learn when your cut-off dates are to make changes for the floor plan footprint, room dimensions, plumbing, electrical wiring, outlet placement, fixture selections, cabinet choices, countertops, flooring, and other specific cosmetic items.
Choose Your Property
Determine the area you are interested in, and find suitable property. The Internet is a valuable resource for finding available lots.
Determine the value of the land by comparing it to the land and homes sold in the surrounding areas (typically within one square mile) over the last six months.
If you have chosen a builder before you buy your land, they can help you determine if it is feasible to build your house on this land. The builder can also help you discover any additional costs building on the land might generate.
All of this may sound a bit overwhelming. Remember, if you have representation, your realtor will be able to guide you through the above steps, and take care of a lot of these concerns for you. They have established relationships with the professionals you will be using, so they can make the selection process much easier. They will also use their experience to help you avoid the pitfalls commonly associated with new construction.
If you do not elect to have representation, remember that there are valiant people who have handled this on their own, and have been perfectly happy with the results. If you are one of these go-getters, remember to do your homework, take your time, dot every i, cross every t and make sure all agreements are in writing.
