Building a new custom home or renovating your existing home can be a daunting task. You may have heard horror stories about construction. It certainly can be an intimidating and overwhelming process but hiring the right contractor can be some of your best insurance to avoid many of the common pitfalls. When working with the right team, building can actually be a very rewarding and fun experience.
So most likely you are already working with an Architect and have started organizing your plans and ideas. For the best results, it is best to introduce a contractor early into the process. Your Architect will help guide you on narrowing down the choices, but unless you already have an established relationship with a contractor, typically you will want to meet and interview several.
There are many Builders, but what makes one especially well suited for you? In order to help you make an informed decision, the following information provides you with critical background, key questions, as well as insight into how to choose the best contractor for your project.
Professional Training, Licensing and Insurance:Legal registration requirements for building your home will vary city by city. However, do you want a person that is not a trained and licensed Builder to construct one of your largest emotional and financial investments? Being a licensed Builder demonstrates a level of competency in the field and also illustrates a commitment to continuing his or her education for the betterment of the client’s projects.
Is the person you are considering a State Licensed Builder with an active state board license?
Do they participate in Home Building Organizations?
What is the legal maximum construction dollar values that they are licensed for?What type of insurance and workman’s comp. policy do they carry and do they require all of the subs on the project carry insurance and workman’s comp?
Residential Experience and Responsibilities:Residential construction is vastly different than commercial construction in many ways. A Builder that specializes in residential architecture can provide you with the proper guidance to achieve your ultimate goals and make sure that the time you spend will not be wasted and the money you spend will add value to your property.
You want a Builder that has significant experience in homes that are similar to your desired level of quality. You don’t want a Builder that mainly constructs entry-level production housing if you are planning a high-end custom and visa-versa. If you are planning a renovation, you want a Builder that has a great deal of renovation experience vs. one that mainly builds all new homes and visa-versa.
Does the Builder have significant experience in working with individuals on residential projects and does he have extensive experience in your specific type of project (ie: renovation vs. new home, high-end vs. entry level etc.)
Have the Builder show you his or her projects and discuss some challenges in building some of the projects.
Is your project type their main focus or is it more of a gap filler?
Ask the contractor for a list of his or her clients and ask the previous clients questions that are most important to you.
In addition to building your project so that it conforms to the construction drawings, basic building codes and keeping the weather out, the Builder should also be an advisor to the client and help manage the construction expenditures in the client’s best interests.
Is the Builder knowledgeable of and able to communicate alternative methods or materials that can perform to the desired standard and perhaps be more cost effective?
How does the contractor communicate the budget vs. actual expenses? Also how do they communicate what percentage of each building component remains to be completed?
How often will he have meetings dedicated to construction expenditures?
Ask the Builder what is the most important aspect to create a successful project. Does the answer match your criteria for a successful project?
Personality: Building a home differs from building any other type of structure in many ways. One reason is building a home is a very personal experience. Your Builder should have a personality that is well suited for the unique nature of building for individuals.
Does the Builder’s temperament seem to match your needs?
Does the Builder exhibit a genuine interest in your project?
What is his communication style and does it work for you?
What does the Builder think is most important to create a good client/ contractor relationship?
Project Management: Builder’s offices differ in size, organization and how responsibilities are managed. For residential clients, your contractor’s office should be able to accommodate a personal one-on-one experience, while also making sure your project maintains satisfactory progress while providing accurate and timely accounting reports.
Can the Builder accommodate your scheduling needs?
Does he or she seem available and easy to reach?
Who will be the actual person that you deal with on a day-to-day basis?
If the Builder has a superintendent, you need to meet him or her as well and ask similar questions to them as outlined herein.
How often will the Builder or superintendent be at the job site and how long will he stay at the site?
How does the Builder ensure the quality and accuracy of the construction? How are mistakes that are the builder’s responsibility or his subcontractor’s responsibilities dealt with?
Construction cost, contractor’s fee and contract: Your project may be big or small, it may be simple or complex, or it may be new construction or a renovation. But no matter the case, there are generally three components associated with its cost: labor, material and the contractor’s fee.
How does the Builder obtain estimates for labor and material?
Can the Builder assign a fixed cost for any of the labor or material or is this aspect of construction cost always a variable?
What does the Builder do to provide accurate cost estimations and what happens if the estimations end up inaccurate?
Does the Builder obtain bids for labor and material from various sources or do they use single sources?
Traditionally there are two methods to determine the Builder’s fee: A percentage of construction costs or a fixed fee.
What method does the Builder use?
Does the method seem to be aligned with your best interests?
If the method is based on a percentage of construction costs, then discuss what is included in the construction costs (ie: landscape, pools, audiovisual, consultant fees, etc). Generally speaking, if the contractor will not be responsible for the installation of a component that should be excluded from the calculation of fee.
Does the fee structure seem to be based on the actual services rendered? (ie: if you select a more expensive appliance, should the Builder’s compensation increase since that really doesn’t require any more work or effort from the contractor.)
How often does the Builder expect to be paid? Payments should coincide with actual services rendered or products purchased. Any money that is paid in advance should be kept to a minimum and only as required for legitimate reasons that are standard practice.
For obvious reasons, a written contract is essential in order to establish an understanding between the Builder and owner. The American Institute of Architects (AIA) has a series of contracts that have been specifically developed to address residential projects and is a very good resource for contract forms. In addition, (in most cases) a significant amount of money and effort is involved and therefore you should have your attorney review all contracts.
What type of contract does the Builder expect to execute?
Is the Builder willing to use an AIA contract or make modifications to his contract based on your attorney review?
Building a new home or renovation represents a significant investment in your time and money and both need to be carefully guided. Selecting qualified professionals for your team is a critical decision and will have a tremendous impact on your experience and the ultimate success of your project.
About the Author: Brad Shapiro, AIA has over 25 years of residential experience guiding clients through the process of designing and building their homes. He has worked with clients from Maine to Colorado; Michigan to Florida. You can view additional information about him and his firm online at:www.shapiroandco.com
Additional Resources:
http://www.nahb.org/generic.aspx?genericContentID=284
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