We Know: Tips for Building a Custom Home

What are the most important things to be considered when building a custom home?

When building a custom home, the buyer should find a reputable builder, review the contract before signing, inspect the property at key stages, and monitor the building schedule.

How do I find a reputable builder?

  • Make a list of reputable builders through referrals: Ask for referrals from your friends and family.
  • Interview builders, and get references: Try to visit homes that your prospective builder has built in the past 3-7 years. This will give you an idea as to what to look out for during the building process. It may even make you choose another builder.

What should my contract say or not say?

Builders contracts are written to protect the builder. Always question the following:

  • Language that allows the builder to "modify" your floor plan to conform to the nuances of your lot, making it "similar" to the plans you agreed upon. Look for other elusive phrases like "vary only slightly" or "dimensions may vary" and verbiage that allows the builder to make "minor changes" in the dimension of rooms, walls, windows and doors to conform to your land. Sometimes "minor changes" turn into major ones for you.
  • Substitution clauses that give the builders latitude to replace certain components of your home with "similar or better quality" items, should the originals suddenly rise in price or become unavailable
  • Mentions of additional fees due at closing, like special assessments that oblige you to chip in for infrastructural elements in your new neighborhood like sewer and utilities and (or) amenities like jogging paths and swimming pools
  • Closing fees of 1 percent to 2 percent of the purchase price find out what expenses these fees cover.
  • Other questionable clauses such as right to purchase home back at original price if resold within a year.
  • You will want at least an estimated finish date to hold the builder accountable to his schedule. A set finish by date is preferable so if there is a reason to extend the finish date you need to approve it.

When should I inspect the property?

Many new home builder/buyers make the mistake of staying at the building site and questioning everything the builder does. Not only does this slow down the building process, but it also creates hostility between the buyer, builder, other workers. The best way to avoid such hostilities is to hire a private home inspector. A private home inspector:

  • Needs to have credentials showing he/ she has inspected numerous homes
  • Will watch for possible defects in building and materials
  • Should review plans before the house is still being planned.
  • Review construction at the four critical points( after the footings, foundation walls and drain tiles are in, but before the dirt is backfilled, "pre-drywall" visit, insulation check; and final walk-through
  • Can serve as the 'bad guy" 'to eliminate friction between the buyer and the builder.
  • Can negotiate with the builder on your behalf

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