201604.01
Off
0

True Life Lessons on Building Your Dream Home

These are some very helpful recommendations that one of our long time clients took the time to compose and share.   The client prefers to remain anonymous but you should know that this gentleman has an incredible resume’ which includes running multi-million dollar businesses and overseeing commercial construction campaigns as well as several of his own major residential renovations and new construction.

“First: Request specific details about everything the builder will provide. For example, there is a world of differences in price, quality and options in something like windows and doors; especially if building near the ocean. Ask that every aspect of the home your builder is providing you be spelled out in specific detail or at least get allowances for items such as wood floors, fireplaces, countertops, cabinets, lighting, etc. My current builder provided a 20 page project specific manual regarding almost every detail of the project before I ever signed anything. I had to request this information from one of my prior builders months after signing and was then provided a brief one page overview.

Second: Be aware that the allowances the builder provides are low. Some of them are EXTREMELY low.

Three: Be aware that there will be three prices for your project. The quoted price when you sign your contract to start the process of building a home. A second price that you’ll be given months later when you and your wife are beside yourselves with angst to get started.  That second price is given just a few days before you start construction, when you are asked to sign a construction contract. In my case the second price was a very significant increase. The third price is the one you will actually be paying for the house. This is the result of allowances that were grossly understated and the influence on both you and your wife from HGTV, Houzz, visits to home shows and various showrooms where you fall into the never ending upgrade trap.

Four: Ask to talk with 4 or 5 clients of your builder that have had their homes for at least a few years.

Five: Be aware that when you visit various places to select tile, marble, lighting fixtures appliances, etc, that none of these products or retailers offer any transparency with regard to their pricing. None of these products have prices on them and they seem to purposely let you look at items that are not in your budget. Ask for the chance (at least initially) to only be shown products within your budget.

Six: Consider asking your builder for a “cost plus” contract. If the builder is willing to do so they will provide you with their required margin for a project of your particular size and use a cost plus margin approach. You can then see all invoices and bids and know where you stand….at least in theory!

Seven: Multiple bids??? Builders will tell you that they get multiple bids from various trades for each aspect of the project and this may be true in some cases. What I have found is that generally the contractor has one or two trades they use over and over for major parts of the home construction (framing, plumbing, electrical, etc) and unless you press them they will not seek other bids. This obviously will cause the project cost to elevate! Additionally small builders don’t carry the same amount of clout as very large construction companies might. So, it is difficult to keep the project on track because these trades show up when they want and not necessarily when you need them.

Eight: Project schedule: For various reasons, many of which were out of the control of my previous builders, my project start date was missed by a significant amount of time. However a seasoned builder should be able to give realistic dates for a project. Require this up front and discuss options should they fall behind. Request a construction time line showing approximately when each aspect of the project should begin and finish. This way you will know throughout the project if you are on track or falling behind.

Nine: Ask what their change order policy is. How much will they charge for each time you change some aspect of the project. Believe me, a custom home will have many, many changes along the way.

Ten: Require that detailed notes be maintained and shared with all parties promptly from each meeting with your builder. I had to take copious notes with my previous builder and review them often to create any accountability. My current builder does it for me and sends an electronic copy within 24 to 48 hours while the details are still fresh in everyone’s mind. This happens whether the meeting occurred in their office or in the field. These are invaluable.

Good luck!