NEW HOMES: The Shrewd Homebuying Guide

The Fallacies of Builder Licensing

Many people assume that builders must pass through a comprehensive testing and licensing procedure before being allowed to build homes, and in some states, that's true. Unfortunately though, many states have no builder licensing procedure, and others subject builders to simple tests which have little to do with actual construction.

Quality is subjective and difficult to measure, and even those states with more stringent licensing procedures cannot guarantee the quality or structural integrity of a home. Therefore, don't be reassured just because the builder is licensed. As a matter of fact, if one is licensed, so are all the others.

If your state does require builders to be licensed (You can find out from your Realtor® or the local building authority) you can call the licensing body and have them send you the requirements for that license. You'll at least be aware of the standards your builder had to meet.

Finally, I have often noted with some humor that some builders and remodelers, whose states do not require licensing, proudly display a license number on their truck or business card. These builders, one might assume, have gone beyond the necessary steps and have become licensed anyway. Surely that would indicate a commitment to quality and to their craft, right? Wrong! The license number displayed is most likely a business license number, a requirement from the local governing authority for all those conducting business in that area. And the requirement for such a license? Pay a nominal fee. That's all. And that's all it's worth. Not only am I not impressed by those builders, I'm a bit suspicious because of this somewhat deceptive practice.