NEW HOMES: The Shrewd Homebuying Guide

Guide to Selecting the Best Builder

If you have already determined that a new home will be the best choice for you, one of your first jobs will be selecting the right builder. Whether you plan to purchase an existing home or have your home built from scratch, you will need to evaluate the builder. Look at their track record. How long has the builder been in business? How many homes have they produced?

While you may be considering one of the large national builders, don't assume that such a choice will make your search easier. Simply because a builder has a national presence doesn't insure that their homes are built with quality. Remember, even those builders who have produced thousands of homes will still rely on local construction superintendents and subcontractors to produce your new home, and the levels of training and competency vary widely.

Also, you should not let a builder's seventy-five point inspection process lull you into a false sense of security. Many such programs are nothing more than marketing gimmicks, created to impress purchasers, investors, and to garner marketing awards, and are of little or no value to consumers. And don't assume that the largest builders necessarily offer the greatest value. Their massive presence probably generates a massive overhead.

It may sound as if I'm partial to smaller companies, but that's not the case. In reality, the differences in size pretty much equal out. The key is to select the builder that's right for you.

While I don't think it's necessary for a builder to have produced thousands or even hundreds of homes before they're qualified, the level of experience is important. A builder should be able to demonstrate a successful track record as part of their portfolio.

Look at the homes prospective builders have constructed. If it's a small company, you may have to tour several neighborhoods in order to see examples of their work. Even if your choice is one of the larger companies and you can see many homes in a single neighborhood, I still advise touring other locations where the company has built. A visit to a neighborhood where all the homes are completely finished will give you an idea of how a builder's homes withstand the aging process. Homes that are two or three years old will evidence a builder's use of inferior materials and workmanship. (Look for peeling paint, warped and split exterior trim, and landscaping that never developed.)

*WARNING: Be cautious of builders who can not show you several examples of their finished product. It's not worth the risk.

Check references

Have your prospective builder give you a list of recent clients. (Ask for at least a dozen.) Be wary of builders who won't do this. However, there are other ways to determine the qualifications of your builder. Drive neighborhoods where they have built and talk to existing homeowners. Afternoons and weekends are the best time to do this, insuring you'll have a sufficient number of homeowners to quiz.

While you may have reservations about approaching complete strangers, you'll be surprised at the number of homeowners who are eager to cooperate. Ask about the building process. Were completion dates met? Did the builder comply with the terms of the contract? Were there significant problems or disputes during construction and, if so, did the builder make a sincere effort to resolve them fairly? Was the final walk-through checklist completed as promised? Did the on-site superintendent demonstrate proficiency and deal with subcontractors, suppliers, and homeowner requests in a professional manner? Finally, ask how the builder has handled warranty complaints. Are responses made in a timely fashion? Is the builder sensitive to emergency situations and do their subcontractors show up when scheduled?

Answers to such questions can be worth far more than the handouts provided by the sales staff and may keep you from making a dreadful mistake. In most cases homeowners love to talk about their builder, especially when the news is bad. Be aware, however, that some people will have negative comments about the best of builders, and you must weigh them against the results of your other research.

Another way to get a feel for the competency of a builder is to talk to some of their subcontractors. Visit neighborhoods with active construction and talk to the crew members. Tell them you're a prospective buyer and ask what they think of the quality of the homes they're working on.

Although some workers may be reluctant to be totally candid, you'll get a feel for their attitude and their concern for quality, and you'll get an introduction to the people who actually build the homes. Remember, regardless of how good a builder may be, their homes will only be as good as the subcontractors who do the work. And many of the subs, sometimes to the chagrin of a builder, will tell you exactly what they think.

*WARNING: Be careful when visiting work sites. Construction is dangerous and you can hurt yourself or others. Be polite. Don't interfere with the work in progress and don't press subcontractors who are reluctant to talk.

If you are uncomfortable approaching workers on the jobsite, you can still talk to some of them by writing down the names and phone numbers of those workers who have their trucks so marked. And you can sometimes get the names of the mechanical contractors (Heating and Air Conditioning, Electrical, and Plumbing) from the local authority that issues building permits.

Finally, check on the builder's financial stability. Does the builder have sufficient funds to complete your home and will they be able to provide warranty service after closing? Builders who are struggling financially may not be able to pay some of their subcontractors and suppliers. In some states unpaid vendors can place liens on your property and force you to pay unpaid bills after closing, even though you paid the builder in full. Such payments can range from a few hundred to several thousand dollars and can literally cost you your home.

In order to avoid this problem, have the builder include a list of subcontractors, suppliers, and lenders as a part of the reference package. You can then verify the builder's financial condition.