21 Questions to Ask When Finding a Home Builder
Looking to Build Your Dream Home?
Here are 21 Important Questions to Ask.
Building a custom home can be an exciting journey. However, this process can be daunting since there are many moving parts to this project. We asked the Pro’s what common questions they get and what questions they wish new home building homeowners should be asking. Here are some important questions to ask the Home Builder before diving in. We have also provided some generic answers that you should expect to hear.
These questions and answers will also help you better understand key steps in the building process and the decisions you’ll make, in partnership with the builder, to bring your new home to life.
- Are you licensed, bonded and insured in the state I am building in?
Make sure the builder you are using is licenses and insured (as well as all of their subcontractors) in the state in which you are building. It does you no good to have builder licensed in one state but not the state your home will be in.
- My budget is this:________________. Can you build my home for this amount?
Once you have your house plans, you can take it to each builder and let them give you a bid or estimate on how much they would charge you to build it. Like any other major purchase, generally you should not go with the lowest bid nor the highest bid, but somewhere in-between that seems reasonable. How and when will the final price for my home be determined?
- Do you have a model I can walk through?
Not all custom home builders will have empty model homes, but they may have previous customers that are willing to let you go through their home to see the builder’s craftsmanship and finish work. Spec builders probably have models open, they just might not be of the floor plan you are wanting.
- Can I choose any or all of my subcontractors?
This is a tricky question. Most successful builders have spent years vetting subcontractors to build a team of people they know will do a good job and have negotiated pricing with them for multiple jobs. Ask for a list of sub-contractors he uses and you can research them individually. If you do have a specific sub-contractor that you want to use, make sure you tell your builder up front, before any contracts are signed as that may affect pricing and the finish deadline.
- What kind of warranty do you offer and what IS and IS NOT covered?
This question is very important, and most people don’t think about it until something goes wrong. Get the answer to this question in writing and make sure it is included in your contract with the builder. What about unforeseen weather conditions such as rain? How could this affect the home project?
- How do you handle change orders?
It is inevitable that you will change you mind about things along the way. Ask your builder how they will handle change orders, including giving you updated pricing along the way.
- I will need to see all invoices immediately. Is that a problem?
Each home builders prices out projects differently. Some charge a percentage of the overall cost to build the home, some make their money off of the mark-up costs of products and others have a flat fee. Make sure you understand their fee structure so that when you see invoices for products and labor, you can be aware if a mark-up is fair or not.
- If there are increases in materials or labor costs, will you let me know the amount immediately?
As the project progresses, the costs of certain products or services may increase from the original bid because at the time of the bid vendors mostly likely gave an estimate. Or a certain phase of the project may take longer than expected. Make sure your builder will notify you of cost increases along the way so that you can work it into your budget and it will not be a surprise at the end.
- How many homes do you currently have under construction? Are you going to be able to closely monitor the construction of my home?
Many successful home builders may have multiple projects going on at the same time. This is not necessarily a problem if they have a plan in place to manage them all. Ask to meet the superintendent for your project and what you can expect in regards to communication and updates. If you have a question, should you call the superintendent or the builder?
- During construction, how often should I expect updates from you?
This can be a follow up to the previous questions. Should you expect updates from the builder himself or his superintendent? Do you, as the client expect an update daily, weekly, every two weeks? Ask the builder what his process is and how you two can come up with a communication plan that satisfies both of you.
- How quickly will you return my phone calls or emails?
Again, the key to a successful relationship with your builder is communication. Ask your builder if you call and leave a message or send an email, how soon does he expect to return your message? Does he only return calls at certain times of the day? Does his secretary answer his emails so it may take sometime to get an answer back right away? If you understand how you each communication, the relationship will go a lot smoother.
- I plan to be on the construction site often. Is this a problem?
You can stop by the construction site to check on the progress of your home. Make sure you give your builder a heads up that this is something you would like to do just so he can inform workers for security reasons and to let them know its ok if they see people touring the project.
- Will you work with my house plan designer and interior designer to make sure my home is built exactly as it was designed or to make changes to the design along the way?
Building a home is a team effort. Your vision can be come a reality only if your home designer, builder and interior designer all work together. A builder may have ideas that the home designer can incorporate, but they need to know at the time the plans are drawn. Or you may have designed an amazing kitchen layout with the interior designer, but you need to inform the builder so that the proper plumbing and electrical can be installed and the right products ordered. Make sure you have your whole team on board before you begin building your home.
- If there is a problem with one of the sub-contractors that you hired, how will this problem be resolved?
An example of this may be that you have moved in the doors to your kitchen cabinets don’t align well or the finish is flawed. Find out how problems will be resolved if there is no response from the cabinet-maker or if he has gone out of business. How will the builder handle situations such as this?
- Do you have references I can talk to?
When a builder gives you references, call and speak with them. Ask how they thought their building process went, if they encountered any issues, how the builder solved those issues and if they would build another house with that builder.
- After reviewing my plans, what is your estimated time for completion?
You may have a certain deadline in mind for when you want to move in, but is that realistic with the building schedule? Will weather affect the construction or do you need to start digging at a certain time in order to get the project started before winter? Make sure you and your builder have the same expectation for a timeline so that there is no confusion.
- Do you finance the construction or do I need to secure a construction loan?
Often times builders will finance the construction loan and then your financing institution pays them when you apply for a home loan once the home is complete. Not all builders do this though, so discuss upfront how the financing will work and if you need to get a construction loan.
- If an issue arises and I decide to work with another builder, what is your cancellation and refund policy?
If things do go south with your builder, it is important that you have options. Make sure your contract states the process and policy for discontinuing the relationship, how refunds will work, what will happen to your down payment, etc. You do not want to be left with no options and no money if you need to end up finding a different builder.
- When do I need to have decisions made about cabinets, paint colors, flooring, lighting, etc?
Ask your builder when you need to have decisions made along way. When do you need to have flooring picked out? Or the style of crown molding you want? The more prepared you are ahead of time, the better the builder can try to help you choose products that are within your budget, go along with each stage of the building process and you will not have to end up paying to do things twice.
- Have you ever owned a construction company under a different name?
This is a tricky question. During the downturn in the economy during 2007-2011, many builders went out of business, bankrupt or simply vanished. As the market picked up, some builders came back and started new companies under a different name to escape their past financial problems or even client problems. There are decent, honest builders out there who did not participate in such actions, but try to vet your builder as much as possible. Call the state and local home builders association to ask about his name to see if they have any past records that may steer you in one direction or another. Again, the more research you do ahead of time the better.
- What are your strengths and weaknesses in building?
Each builder has their special touch, or skills that they bring to a project. If your home will have a lot of molding, framed out windows, etc, make sure to work with a builder who excels at finish work. Ask each builder what makes them unique and sets them apart from their competition.
- What is your process for fixing things after the project is complete and I have moved in?
Chances are, once you move into the home you will notice a few things here and there that need to be fixed; nail pops, paint that was scratched on moving day, a crack in the crown molding, etc. All minor things but make sure to have a clause in your contract that states the builder will come back after you have moved in and fix things that are due to building/move in. This does need to be within a certain number of days as to protect the builder from having to pay for natural wear and tear from you living in the home.
- What are the major energy-saving features of homes you build?
Find out if the home builder will be using or can use energy-efficient features on the home to save in overall costs such as Heating – Ventilation – Air Conditioning (HVAC). Also, strategic window placement to conserve on lighting with the use of more naturally lit areas to reduce the need for more electric costs.
Practicing Due Diligence is an important part of pre-screening a potential home builder before getting locked into a contract. There may be other important questions you wish to ask, so feel free to add them.
If you have any questions regarding the process or need further assistance.