From Bare Land To Dream Home – Chapter 3 Builders
Beginning with the builders
The third option is to begin by finding builders you can trust. That doesn’t mean signing a contract to build before you know what you’re building. It also doesn’t mean calling around and asking “what’s your price per square foot.”
Think about it. If you choose to pursue a lender first, you’re going to have to use a reputable builder to get approved for the best possible terms on a construction loan. If you choose to hire a designer first, you may have to settle for a bad building contract. Even then you still might go over budget and face financial problems.
You can cut out all of that hardship by starting your home construction journey with choosing the right builders. Or even better choice a design build firm that can do more for you.
How to choose home builders
Here are a few ways to find the right builders for your new home:
Choose fixed-price builders
In a fixed price contract, that budget is gospel truth. That budget constraint ensures that your builder is held accountable. When you choose a design and present it to your builder, a fixed price builder will compromise to get some of the features that you like without going over that budget.
In a fixed-price agreement, you and your builders will agree on every single detail of the home before you ever begin; after all, you’re agreeing to buy something that’s never been seen before? Except if work with Elements which can show you a 3D design. Your builders have an incentive to build efficiently, not wasting time and materials.
However, Fix price builders tend to cut the quality of products used on the job. Therefore you do not get as high of a quality of a house as you would with a cost-plus builder. If you choose a fixed price builder make sure to specify the products used. Because you are specifying products you must understand that an honest builder will be more expensive.
Choose cost-plus builders
Many builders that are trying to convince you that cost-plus builders are the devil will used varied explinations. These would include that cost-plus builders always go over budget, They don’t worry about wasted materials, and they never finish on time because there is no motivation.
It is true that in a cost-plus contract there can be variables in price. However these variables do not always mean that the price of the home goes up. Furthermore, if the homeowner is honest about what they want in the house from the beginning cost can still be set. A cost-plus builder will specify a standard in fixtures and equipment and if the homeowner picks out something more expensive that budget is gone. I once worked with a client, we put in a healthy budget of $7000 for appliances and they spent $23,000. Of course, we made them aware of this before the appliance where purchased and they choose to proceed. However this made a $16,000 addition to their budget. It just goes to show that you can always spend more.
The main variables that can not be controlled by you or a builder is the cost of lumber and roofing materials. This being said Elements uses 3D design to get an accurate framing plan and reduces waste to a minimum. Because of this these variable usually only make a small difference.
The main advantage to a cost-plus contract is if things are cheaper you save the money. Don’t be fooled thinking that a fixed-price builder is not going to add money to the contract to make sure he is covered in case of suprises.
Which form of builders contract to choose
Unfortunatley this is a judgement call on your part. Elements will be happy to work with you in the most effecient way possible either way you choose.
Look at a builders jobsite
What you’re looking for here is whether the jobsite looks neat, tidy and safe. Are the materials well-kept or just thrown around? Does everything seem hap-hazard? Part of what you’re paying for is the waste of a job.
If the jobsite isn’t neat, it could mean that the builder is disorganized or doesn’t pay much attention. If that’s true, a lot of money probably goes out the door in waste, and that kind of builder winds up paying subcontractors more in trips. Which, of course, means you end up paying more.
Talk to trades or subcontractors
Take this with a grain of salt, since in every profession there are people who are just unhappy no matter what. But if there are workers out there, it’s okay to ask their opinion. A subcontractor might give you some hints as to whether or not a builder is easy to work with and timely.
Search for the builders reputation
It’s very easy today to get on the web and find the reputation of virtually every business out there. While every builder is going to have a couple of not-so-great reviews, you should be able to spot a trend. Do customers generally wind up happy, even after the inevitable problems during building, and offer a recommendation? Are there consistently bad reviews about the builder going over budget, taking too long, or not taking care of the warranty?
See how fast we build
This isn’t always extremely easy to do, but it can be useful to make occasional trips past a particular jobsite. How long is it taking the contractor to complete a house? Does it look like significant progress is being made or does construction appear to be barely moving along?