Biggest Mistakes to Avoid When Choosing a Custom Home Builder
When seeking the right builder for your custom home, it’s important to find a contractor who understands your personal style, communicates well, enjoys a good reputation and has lots of experience. Once you’ve found the right contractor, it’s important to be open and honest with your builder from the very beginning. Below are some of the common problems that can arise in these early stages of the process when hiring a custom home builder. You can avoid these mistakes by being aware of the potential pitfalls and taking action to avoid them.
Many building companies create misleading advertisements as a way to attract new clients. Marketing materials may make claims like “Build a brand-new custom home for less than $100 per square foot!” Transparency is absolutely paramount when choosing a builder. Builders relying on these types of ads are only looking to secure a contract and then reveal the significant difference between their advertised and actual pricing.
Every custom home is completely original with unique features and floor plans. For instance, a 2500 square foot home with 3.5 baths will have a higher price tag than a 2500 square foot home with 2.5 baths. A single-story ranch will not have the same cost structure as a two-story colonial. Inclusions such as larger kitchens, expanded garages, and finished basements create variables in final costs.
Experience is important. Builder references offer a glimpse into past projects while also giving you a chance to inquire about customer service, quality craftsmanship, business practices and problem solving skills. Beware of custom home builders who will can only provide a two or three names of previous clients.
Don’t Be Shy About Questioning References
When contacting references, choose open-ended questions that provide an in-depth look into the customer’s experience. Yes and no answers to questions are less than helpful. Ask questions about topics such as punctuality, cleanliness, communication styles, and post-construction support
BUILDING A NEW HOME-SECRETS BUILDERS DON’T WANT YOU TO KNOW
If you have been thinking about building a new home, there are a few things you may want to take into consideration before you sign that builder’s contract. It may seem simple, but buying a new construction home and working with a builder is a lengthy, legal process, which can be complicated, a sometimes a little stressful if you are not prepared.
I wanted to break down how to buy a new construction home, by going over a few trade secrets builders won’t mention to you. Knowing these can keep you from losing money, save you time and reduce your stress.
Building a new home can be fun, after all, everything in the home, you get to choose. The builder’s sale center and model homes are designed to get you excited about buying a brand new home. It is easy to get caught up in all the beautiful options, the decorations and the amenities a new home has to offer. If you are not careful, it is also very easy to overspend too.
If you have ever been to a builder’s sale center, you probably noticed that the first thing they want you to do is to fill in all your private information. You don’t have to give them your personal contact information just to see their model homes.
Builders are putting you into a database to contact you later. While that may not be such a bad thing, it could come back to haunt you if you later decide you want representation to make a purchase with them. Plus, read the small print to make sure you are not giving them the opportunity to share your private information with their affiliates.
Great Gifts For Builders – Keep Your Contractor Happy
Early morning starts throughout the year, working outside in all weathers, shoveling and lifting heavy loads, climbing up and down ladders, and working with toxic and harmful building materials all take their toll. And often this work is carried out on sites with no electricity, heating, or plumbing too.
Having work done on your home is always an unsettling and stressful time. However, when you get a good builder or contractor, they make the whole process so much easier.
As not only do you get the finish and quality of work that you are looking for, they will also be mindful to keep the noise, dust and disruption down to a minimum while the work is going on. So it’s a really nice gesture to get them something once the job is complete to thank them.
Construction can be thirsty work, and there’s nothing better than getting home and cracking open a cold bottle of beer at the end of a long, hard day of grafting. So why not treat your builder to a few of their favourite beers to help them to relax after all their hard work on your home.
As a case of cold beer from a happy customer is always going to be a nice thing to load onto your van as you are leaving a job. Now any case of beer is likely to be appreciated, but if you want to get something a bit more special you could order them a mixed case of craft beers.
Tips from a Builder to Buying New Construction
There’s nothing better than buying a brand new constructed home right? You don’t have to deal w/ worn carpet or scratched on the wood flooring, the previous owner’s questionable choice in paint color or wallpaper or cumbersome negotiation because of the seller’s emotional ties to the home.
WHAT TO LOOK FOR
First releases – If at all possible, buy in the first release. You can get the scoop from sites like New Home Source or Top Ten New Homes or from your local news. In the first release, builders are not certain how the market will respond still. After that initial feedback they will adjust or raise prices and become harder to negotiate.
Units in the middle of the development – Away from street traffic and more privacy
End units – Especially if it’s a town home or row house style development. End units have only one shared wall instead of two.
Directions – How is the unit orientated to how the sun rises and falls? Having the living space in the east would be good as the sun rises, but better make sure you have good blinds or curtains if the master bedroom faces east.
USE A REALTOR FAMILIAR WITH CONSTRUCTION
Many agents will pick up their clients, drop them off, and pick them back up in 30 minutes. They might as well drive for Uber/Lyft if that’s the case. No wonder people have the perception they don’t need an agent. The sales rep at these project sites might seem helpful, but remember they represent the builders and often have quotas and incentives to close you fast. They do not have your best interest in mind. Having a buyer’s agent cost you nothing and they can help you negotiate as well as to watch out for pitfalls.
DO YOUR HOMEWORK
Builder’s reputation – Talk to your agent and other homeowners of previously homes constructed by the same builder about their experience. Look for online reviews, local licensing boards, or Better Business Bureau to see if there’s been complaints or worse, liens on the property because the builder skipped out on paying contractors.
What else is going up in the area – Again, talk to some folks in the area or the local planning department to get a sense what else is getting built in the area.
Contract – Builders often use custom contracts instead of the standard form used by your state or local MLS that has been combed through and litigated on until the cows come home. These contracts are very builder friendly. You’ll want to consider having a lawyer review the documents for you.
HOA documents – Review the HOA bylaws and Covenants, Conditions, and Restrictions (CC&R’s). How much are HOA dues? What amenities are included? Parking? Guest Parking? Pets? Rental restrictions? What do the HOA insurance cover? Pay special attention to some of these items that can dramatically impact your quality of life and checkbook. Also note when you have to start paying dues. Most builders cove the costs until at least 50% of the project has been sold.
Knowing what is important and what they are flexible on is the key to successful negotiations. For the builders it is unlikely for them to budge on price and set a precedent for the next buyer. However, below are some items you are likely to have good success negotiating for:
Closing costs or credits – Some builders will cover your closing costs or give you credit towards closing.
At cost upgrades – It’s not uncommon for the builder to mark up 50% for upgrades. It’s like pizzas… they get you with the toppings. You might be able to roll the cost of the upgrades into your loan amount vs paying out of pocket to a contractor later but why pay more when you don’t have to?
Electrical – It’s way easier to put in recessed lighting from the get go instead of trying to do it yourself later. I usually ask for these things along with better switches, surround sound wiring, cable and fan outlets.
Amenities – New homes often don’t come with fences, decks, window blinds, or landscaping. You can ask for thee instead of paying out of pocket for them later.
Appliances – if the builder won’t budge on anything else, at least try to get a free fridge and washer dryer.
Keys to Designing Beautiful Spaces When Building a Custom Home
If you are like most people building a custom home for the first time, or perhaps after not quite achieving the design you wanted on your first home, the thought of making all of your selections comes with more than a little fear.
Their path usually is a variation of this: He or she is inspired by something they see, often never researching if it will work in their own space or some give only cursory thought to how it would fit their home and generally skip straight to how much will this cost? I can understand the temptation to follow this path but for the many reasons outlined below, it is wrong.
Now before you say ‘Wait, the only reason I was interested in the project is because I liked what I saw!’, let me explain. While it is true that most inspiration is born from a well executed design seen in someone else’s space, attempting to make that inspiration your starting place can create rigid ideals that are hard to adjust later on. I explain it to my clients this way: ‘Be careful what you fall in love with because it is difficult to fall out of love with something when the budget does not work out’. Another way to put it is this: You can not create a space that looks amazing if it does not work in the space you have planned. You will also never achieve the look if it is outside your budget.
When you approach design in the prescribed order (Budget -> Function -> Aesthetic) you make your decisions based upon foundational choices that enable the ultimate design.
In this article I will share with you how these three major focus points that are critical to a successful design, when approached in the proper order, can propel you toward your final product. Every design choice must be a balance between affordable, practical and desirable. The trick is to find your perfect mix of the three which is sometimes easier said than done.
how much am I willing to spend?
Keep in mind that I used the phrase willing to spend intentionally. Just because the bank will lend you XXX dollars to work with does not mean that this is your budget amount. It is best to know your top dollar amount you are willing to borrow and then reduce that by a minimum of 5% to allow for unexpected expenses or things you want to splurge on along the way.