It is important that you choose the right contractor when building your dream home. Selecting a builder/contractor affects every aspect of the project. Whether you are building on your land or a lot the builder/contractor owns, there are many contractors in the marketplace, and to have a well-built home and enjoy the building process, you need to hire the right one.
Whether you have purchased vacant land for sale yourself or plan to build on a lot owned by the contractor, location is everything. You need to love where you are building! That’s first and foremost. You’ll never love your new home if you don’t love its location!
Planning to get the services of a custom home builder to make the home of your dreams? When it comes to making a new home, everyone wants to construct it according to needs and choice. Home is the place where you want to live a peaceful and happy life with your family.
Homes are also part of your personality these days, so everyone wants to design them in the best way. If you want to get construction services for your new home, you will find various builders in the market. It is important that you can choose a good builder who can construct your home in a custom way.
Types of Builders
Tract Builders
Also known as “production builders”, these are generally big, established builders that are often Statewide if not national companies.
They are generally in just a few neighbourhoods in a city and build dozens or hundreds of homes in each neighbourhood.
They generally have a set number of floor plans and features to choose from in their own design centre, without too much flexibility.
They also generally build homes whether they have buyers yet or not, meaning they may have some completed construction vacant, for sale, and ready to move in.
Often they will have a fully staged model home in each of their neighbourhoods where their sales associate works full time.
Speculative Builders
“Spec” is short for “speculative” because spec builders buy a lot and start building even without a buyer yet, “speculating” that they can sell the home for a profit when done.
Spec builders are similar to tract builders in that they start building a home even before they have a buyer. Unlike tract builders, they do not own large “tracts” of land or lots in a neighbourhood that they are committed to building on.
Instead, they will generally buy lots one at a time and begin building. The floorplan and features may change with every home.
If they have already started a home, many items are likely going to be set in stone and cannot be changed, but they often will build a home from the ground up with more flexibility.
Spec builders are more likely to be flexible on terms like the price if it is an inventory home that has been on the market for a long time.
Unlike custom builders, spec builders often require terms more comparable to preowned or tract homes regarding upfront costs like earnest money and deposits.
The quality and upgrades of spec builders cover nearly the entire range, from affordable starter homes to higher-end new construction. Many custom builders also build spec homes, and spec builders sometimes build custom homes, so the line between spec and custom builders is blurred a little.
Custom Builders
You can have anything you want because you’re paying for it! Custom builders can build you practically anything, limited only by your budget, imagination, and local building or neighbourhood regulations.
Unlike the two other builder types, custom builders do not start building until they have a buyer, so they almost never have vacant, completed homes to view unless they had a buyer that failed to close. Sometimes they will build a spec home, for example, when competing in the Parade of Homes.
Custom builders are not flexible on pricing and much more expensive to get started. They often require a 5-10% deposit upfront, plus other fees like lot fees and architect fees if your floorplan is customized.
Unlike spec and tract builders, custom builder sometimes requires that you buy your own lot, first, especially if you are at very high price points or building on land in the country.
Custom Build vs. Production Build
When selecting a builder, you’ll want to consider which type of new construction you’d like to pursue: fully custom or production. The decision between the two types will boil down to how much you’d like to contribute to the overall design process.
Production Build
A production builder designs neighbourhood of homes based on a library of floor plans with the opportunity to personalize set features of the home like flooring, exterior finishes, or countertops. A production build is the best match for a buyer that wants a brand new home without taking on the work of choosing all of the home’s design elements.
Custom Build
A custom build gives the buyer the freedom to fully design the home from the ground up with guidance from their builder. There are no limits (outside of the budget and standard regulations) on the home location, materials selected to design the house, or overall layout/design of the floor plan.
Building custom will ensure that you get precisely what you want, but there are a few downsides. Custom builds offer a bit more uncertainty when it comes to budget and timeline. You must have good faith and trust in your selected builder if you choose this route.
Things to Consider When Choosing a Builder
You have choices. Lots of choices.
First thing’s first: pick your budget, location, and home style. This may seem like a no-brainer, but it’s really important because all three of these decisions relate to one another. Before you ever meet with your builder, it’s a good idea to discuss what your maximum budget will look like. It never hurts to go ahead and get a pre-approval letter drafted from your lender and explore the type of loan that is right for you. We can help you with this!
- Where would you like to live?
- Which city/neighbourhoods do you prefer?
- Are you in the waterfront market?
The good news is that you are not required to purchase your lot from us; we are happy to build on your previously owned lot, wherever that may be. Another choice you will have is to decide on whether you prefer to build a custom or semi-custom home. A custom home is one that is designed specifically according to your wants, needs and desires, from the ground up! A semi-custom home has already been designed, but you have options to choose from, ranging from the model type down to the lighting. We offer an in house architect that takes the headache out of bringing your vision to life!
Bring on the questions.
Ask the builder questions. No question is too big or too small! We always suggest writing them down before your meeting. Consider these quick questions as a starting point:
- Are you licensed and insured?
- What is your warranty and service policy?
- Does your style match what we’re looking for?
- How many current projects do you have?
- Do you have enough time to take on a new project?
- What is your typical turnaround time?
Additionally, see how willing they are to let you in on their projects. Ask them if they have recently finished homes you could tour or if one is being built that you could peek into. Personally, we love it when potential clients are prepared with questions!
Testimonials go a long way.
Chat with previous clients. You will learn quickly that being thorough is important in the home building process. Find out if any homeowners are living in your potential home builder’s homes and see if they would be willing to chat with you.
Remember when we said to ask questions? Keep asking!
Evaluate quality over quantity.
Quality is key. This is a great way to evaluate a potential home builder. You want a builder who is savvy in working with your budget, but you don’t want a penny pincher who will skimp out on safety. Even if you save some cash by cutting corners, you may end up dolling out more costs in the future due to shoddy work. You should also make sure you invest in things that can’t be readily replaced on that topic. For example, even though you may want to splurge on those granite countertops, it may be wiser to put that cash towards a more energy-efficient HVAC system (unless you have the budget for both, in that case, get you that granite!) that will save you money in the long run. A good builder will have already established relationships with local contractors that will save you time and money during this process.
Communication.
Do your communication styles match up? You want a home builder dedicated to you, not a homebuilder who is just cashing a check and building a box with a roof on top. Are they really taking time to listen to you? More importantly. Did they give you honest feedback? For example, if you asked them to build you a mansion on a shed-sized budget, would they respond with sincerity, even though they would have to tell you they couldn’t deliver what you wanted? Communicating clear expectations upfront is absolutely key in the success of the finished product your beautiful future home! That said, choose your builder wisely.
We know it’s a lot to think about, but trust us, when you’re actually sitting comfortably in your new home (you know, the one you’ve envisioned in your dreams), you’ll be glad that you took the extra steps to make everything perfect. Plus, the relationship you’ve built (pun intended) with your home builder means that you can meet with them to review any aspect of your home building project at any time, and they will make sure that you’re satisfied. Finding the right home builder will ensure that your path to that home is as smooth and efficient as possible.
Don’t forget the punch.
Part of the final phase of building a new home is to go over your “punch list.” A punch list is a list created at the end of construction that shows what still needs to be done or repaired on the new construction. You and your contractor will create this list the week before closing when you go through your final walkthrough. You should be taking notes every time you visit your construction site or do a walkthrough.
If you have a real estate agent, it’s a good idea to have them participate in the punch list because they are not emotionally attached to your home and may have a better eye for identifying flaws.
When creating a punch list for your new home, keep in mind that problems typically fall into two categories: reasonable flaws and unreasonable flaws. Reasonable flaws are flaws that fall within the tolerances of building construction (or insignificant flaws that generally do not affect the quality of the new home). On the other hand, unreasonable flaws are flaws that have to be fixed. These problems do affect the quality of the home. Once any unreasonable flaws are corrected in your new home, substantial completion means the new home is livable and can be occupied. Before closing on your new home, you’ll have one final walk through to verify that the items on your punch list were fixed. As long as the new home has reached the point of substantial completion, you should be able to proceed with closing even if everything is not completed.
Be sure you put the money for the completion of your punch list in escrow. This will allow you to move into your new home while still requiring the builder to complete the punch list items. The punch list marks an exciting time in the process of building your new home because your home is almost done! Remember not to get so excited that you breeze through your punch list because you don’t want to regret that you didn’t take the time to fix these problems.
Personality and working relationships
Think about the relationship you want to develop a relationship with the builder. Some clients need to be present regularly and want to build up a rapport with the supervisor in charge. Most bigger builders change supervisors regularly, and some clients can find that frustrating.
If you want to be involved in the project, a small builder may provide a more personal service. You may even be dealing with the owner of the company, and this can give complete reassurance. On the other hand, if you are content to sit back and let things happen, developing a close relationship won’t be as much of a priority and choosing a builder for personal service is less important.
It’s vital to get the right builder for your project who will deliver what you want, the price you want, and the level of service you need. A good building broker can help guide you in decision-making, explain unfamiliar terms and conditions, advise what to sign and when and make sure the choice of builder fits your brief.
Questions to Ask Your New Home Builder
- How many years have you been in business, and how many homes have you built? Are you licensed (where required) and insured?
- What sort of new home warranty do you offer?
- Do you only build from existing floorplans, or can I provide my own set of plans?
- What are features standard in the homes you build? What are the upgrade options?
- When and how can I make changes or upgrades throughout the building process? Do all decisions need to be finalized before construction begins?
- What are the energy-saving features of the homes you build?
- Who will be overseeing the construction of my home? Who can I reach out to with questions as they arise, and how can I contact them?
- What is your process for inspections throughout construction, final walkthrough, and addressing any matters that need to be corrected or finalized?
- How long will it take to build my home?
- How and when will the final cost of my home be determined?
- Can I view a current project you’re working on? (Homes in the works are a great way to check for workmanship and material quality.)
- Do you build model homes that I can tour? If not, can you help me make an appointment to tour a home you built for another customer?
- Can you provide me with references or testimonials from previous home buyers?
While this list is by no means comprehensive, it’s a great place to start conversations with builders. If there are key features you’re looking for or specific concerns you have, be sure to ask those questions, too!
Trust Your Gut
Don’t forget to assess how you feel interacting with the builder. Are they open to your questions and providing you with thorough answers? Are they asking questions to get to know your lifestyle and expectations, and are they listening to your answers?
You’ll be working closely with the builder of your new home for at least six months, and you want to make sure you know with who you agree to work. The excitement of beginning construction on your new home may make you want to rush through this process, but take your time; it’s worth it.