questions to ask your custom home builder

The key to making the correct choice of builder is knowing the questions to ask your custom home builder.  The second most important selection, behind architect, in your journey to a custom home build is your choice of builder.  The primary selection is obviously the residential architect; who’ll be the company to expedite contracts and hold the builder accountable.  Your architect will help with the choice of builder after a tender/bid process.  The builder selection impacts the success and viability of the whole project.

Prior due diligence is essential as your builder’s performance affects the quality of home construction, cost of construction and program.  Due diligence can be undertaken before a formal appointment/interview with the builder.  Due diligence activities should include: reviewing website, reading client reviews, understanding work history and tenure of experience.  The builder should have competent support staff and relationships with manufacturers, suppliers and trades for your project.

Questions to ask your custom home builder can be broadly distilled into eight practice areas.

• • Qualifications and experience.
  • Project management.
  • Building budget and construction costs.
  • Builder Liquidity.
  • Communication.
  • Quality and materials.
  • Planning approval and building permit.
  • Construction program.

Planning approval and building permit.

Architectural offices specialize in obtaining planning approval and building permit issuance from local municipalities.  Clients obtain better contract pricing on the lump sum building contract utilizing a traditional design and bid/tender process.

Signing a builders contract before the design puts the horse before the cart and the fox guarding the hen house.  Depending on the building budget, clients can forfeit $100,000’s in budget savings by agreeing to one builder’s labor/material pricing.

Qualifications and experience.

In the area of qualifications and experience, questions to ask your custom home builder include:

• Can I view your education awards and state license?
• How long have you been building custom homes and how many have you completed?
• Do you have previous experience with similar size, scope, complexity as my project?
• Can you provide a list of client references or view recently completed projects?

Project management.

The client-builder is a long-term working relationship which needs to endure until practical completion of the custom home build.  Although a contractual relationship; its also important to relate on an interpersonal level.  It’s important to understand each others communication style.  Client-builder compatibility is just as important as project management, questions to ask your custom home builder.

• How is the project supervised?
• Will there be a dedicated on-site foreman?
• Who will be my contact person for the job?
• What is schedule and conditions for progress payments?

Building budget and construction costs.

In relation to building budgets, questions to ask your custom home builder include:

• Will you supply a written cost estimate with itemized breakdown on labor and materials?
• When and how often are progress claim made?
• What is the procedure for contract variations/change orders?
• Are any provisional sums listed in the contract.

Builder Liquidity.

Builder’s profit and loss statements and cash flow shall determine whether you move into your residence.  The builder’s financial and credit reports can be assessed with a number of online services; such as Dun and Bradstreet and Experian.

Personality is great but won’t get your builder out of financial trouble should they make questionable business decisions.  Often cashflows on other project will affect payments and schedules on your custom home build.  Industry statistics show it takes approximately three to five years for a builder to become financially sound.  A successful builder budgets for warranty service and repairs during the twelve month ‘defects period’.  A builder who considers them an unwelcome expense may not be in business next year.  Questions to ask your custom home builder in relation to financial reporting.

• Can I view the value of your workers’ compensation, professional liability insurance and project insurance certificates?
• What payment terms do you have with suppliers and tradesmen?
• Ask to view the builders homeowner warranty insurance.

Communication.

The challenges during the construction program require clear communication lines and established office processes.  A superintending architect will typically use: Architects Instructions/Change Orders, Extensions of Time, Progress Claims and Contract Sum Adjustments.  You meeting should help you to gauge communication compatibility with the builder.  These questions to ask your custom home builder will identify any construction communication challenges.

• Which staff member will project manage the suppliers and tradesmen?
• Who is the point of contact for variations and design revisions?
• Who is project managers oversight during construction should they be unavailable?
• What is the office process when staff are on holiday or absent due to health?

Quality and Materials.

During the custom home builder interview; it is important to understand the relevant contract clause on material substitutions.  For example, one client requested hand made Morrocan clay tiles to be laid in herringbone format to be costed.  Does the proposed builder’s contract permit substitutions if the project is over-budget?  Further, do substitutions of labor or materials require sign-off by the client or client’s representative; the Architect.

The contract price should guarantee all specified fixtures, fittings, appliances and equipment are installed as drawn and specified.  An AIA contract ensure the Architect superintends the project and maintains the integrity of the quality and project.

Construction program.

Your builder’s project load and office quality assurance processes will affect the construction program and practical completion date.  The interview with the builder may inform you of the company’s procedures.  The builder should be able to supply a detailed construction schedule and liquidated damages should not be an impediment.  Visiting some of the builder’s job sites or interviewing any former clients is an opportune way to determine performance.

Your Architect can assess the critical path of the construction program prior to contract signing.  The builder should also describe procedures to mitigate any delays in construction schedule  Questions to ask your custom home builder concerning program are:

• What is the average time-on-site for jobs of similar size and scope to mine?
• What’s the expected construction program?
• Do you usually meet practical completion dates?
• What is your current project load?
• Can I visit site during construction?
• How long is your typical Defects Liability Period?