How To Hire A Home Builder

Building a home is a huge investment of time and money. The exciting part: You’ll get exactly what you want in your dream home. But building something from nothing can also become a terrifyingly messy process if you aren't prepared.

The upshot is, you need to hire the right builder so your project goes as smoothly as possible.

An experienced homebuilder will help you every step of the way—from planning the design, coordinating with an architect, handling permitting, and helping you set a budget to keeping the project on track. But how do you find this key team player?

In this installment of our Guide to Building Your Own Home, we’re covering everything you need to know about hiring a builder, including deciding what kind of builder you need, what the builder actually does, and questions to ask so you find the right one for you.

What does a home builder do—and when to hire one

Finding a builder is actually the first thing you should do when building a home—before you buy land and before you draw up plans. A builder will estimate the true cost of the home you want to build.

Tim Benkowski, senior project manager at Balsitis Contracting in Lake Geneva, WI, says people sometimes approach his team seeking a bid based on plans they’ve already had drawn up. Too often, the cost to build that home exceeds their budget.

“If we’re involved at the beginning, we can help guide the design process starting with schematic design to give the prospective client an idea of the budget,” he says. “That way, design revisions can be made early without the owner falling in love with a home design only to find out they need to cut out their favorite parts or reduce the project scope.”

There are two main types of builders:

  • Design-build firms work with you to plan your home from scratch, just as you like it. Each project is usually a custom design. Some have an in-house architect or contract with architects (and sometimes interior designers) to help. But this freedom and personalized approach typically comes at a high price.
  • Build-on-your-lot builders have a library of floor plans you can choose from, but how much you can customize the plans varies. Often these builders have a design center or offer you a choice of specific products for your home. While this can save you money, make sure these products match your design ideas.

How much does a home builder cost?

To build a home, expect to pay about $150 per square foot for a home builder, according to HomeAdvisor. So a 2,500-square-foot home might cost about $375,000 to build. About 40% of the cost goes toward labor, while permits, design fees, and materials take up the rest.

Yet this cost will vary greatly based on the style of home you select, along with features like flooring, appliances, fixtures, and other design elements. That’s why it’s so important to hire a builder as early as possible, since it can save you money and keep your project within budget.

“Too often, the owner thinks they’re at the mercy of their builder, and when pricing comes in too high, they believe the solution is to find a different builder,” Benkowski says. “Have in-depth conversations with your builder first."

This can help you avoid any surprises.

Do you need an architect, too?

Design-build or build-on-your-lot builders may give you access to an architect. But you can also opt to hire a builder first and then find an architect to design your home, or choose an architect first and then find a builder.

Whatever you try, make sure the architect and builder are comfortable working together and both are confident they can meet your budget.

“My recommendation is to build your team first, starting with a builder you like,” Benkowski says. “The selected builder should be able to help find a lot and architect suited to your goals. You may also want to consider hiring an interior designer and a landscape designer.”

An architect may charge $2,500 to $8,000 to draw up plans, according to HomeAdvisor. Landscape architects charge an average of $2,400, interior designers $6,500—but it will depend on square footage, design elements, and more. These costs may be lumped in to your total building bill.

Searching for home plans online is another option, says Paul Foresman, vice president of business development at Design Basics.

Stock plans may be cheaper than hiring an architect if you’re struggling to stay on budget. Just run the plan by your builder before purchasing it to make sure it meets local building codes and zoning ordinances.

Questions to ask a home builder

Asking for referrals from friends and family is a great place to start your search for a home builder. Next, check out the National Association of Home Builders’ online directory. NAHB members are committed to ethical standards and continuing education. You can also check that the builder is a member of local home builders groups and is in good standing with the local licensing boards.

Check references as well, Foresman urges, including from other homeowners who’ve used the builder and the subcontractors and vendors the builder works with. Ask to tour homes the builder has built previously and find out how long it's been in business. Builders who’ve been at it for several years are likely more financially stable and have endured through different economic cycles, he adds.

You should ask lots of questions, too, including the following to get a gauge of the builder's experience and suitability for you:

  • How do you guarantee your work?
  • How do you set up budgets and allowances? So you don’t go over budget and end up having to pay more based on the fixtures and other elements that you choose.
  • What types of materials do you use? Find out about the type of wood, pipes, windows, and everything else that will be used.
  • Do you offer a warranty? If something in the newly built home breaks soon after you move in, find out how the builder will handle it. Ask about the length of time of a warranty and what it covers and doesn’t cover.
  • Do you acquire all the necessary permits? Builders usually get all the necessary permits for the home build, so it’s a good idea to ask about that process, too.

Simple rule of thumb: Get everything in writing.

“It’s imperative that the buyer's and builder's expectations are aligned before contracts are signed,” Foresman says.

Once you decide on a builder, you and the builder will sign a contract spelling out the scope of work, deliverable dates, costs, and what happens if something goes wrong or gets delayed. Always have a local attorney with experience in construction law review the contracts before you start the project.


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