How To Choose A Builder.
Updated: Feb 19, 2020
Hello, my name is Paul Pablovich, and this is our continuing series on how to build a house and everything that goes into it. In our first Vlog and blog posts, we kind of went over where to start. I'll summarize that quickly for you. We're going to assume that you have a general idea of how much money you can get your hands on. You've formed a relationship with a mortgage broker or lender, and you have a set of plans. A stamped set of plans. A concrete idea or concept of your house. It's been drawn, and you have it.
Now we need to look at finding a builder. There are so many amazing builders out there. You've probably already started asking friends and family. Maybe your lender or mortgage broker referred someone to you. Perhaps your architect referred someone to you. Maybe you already have a builder, and he assisted with the plans for your house.
The first thing I want to advise you is to talk to as many builders as you possibly can. Go to their websites, Google them, find out what they do, look for reviews online. You can do all of this without any face to face contact. You can say, Hey Paul, who is an excellent builder? "Oh, you've got to go check out ABC builder." Just Google it. ABC builder… find their website. This will start telling you a story. It's important. If someone tells you, Hey, look at Frank, the builder and you can't find Frank the builder on the internet or any standard way. I'm not saying that it's going to take him out of the running. He may be an old school builder who has never thought it necessary to build a website or present his information digitally to anyone.
After you narrow that down to a few of them, keep in mind, you know my saying. You are in charge! You run the show. This is your money that you're going to be giving to someone to deliver a product to you. You can have some pretty high standards and thresholds that you want this particular individual to meet. I think it's essential that you keep that in mind. Remember everyone works for you. When meeting and interviewing a builder, Remember you're entering this conversation knowing that you may potentially hire this individual and their organization for a four hundred thousand dollar contract. It's a big deal and the majority of professional builders respect and understand your position.
You will be able to determine that when you talk to them. So if you meet with a builder and you say, well gee, thank you so much, Mr. builder, for meeting with us. Here are our plans and here's what we're thinking of doing. Could I have some references or can you give me the addresses of some houses you have recently completed? They should gladly provide you with that information. So you can call Mrs. Smith. You can ask her how was her experience with the builder. It's important! This is such an important transaction in your life. I don't want to cause you any anxiety here because again, don't forget; this is no different than someone telling you, Oh, there's a great restaurant. You ought to try it and you're going to get on Yelp and you're going to take a look and wow, 50 people said this is great. You're always going to have that one person who, no matter what you do, is miserable. So I wouldn't let one or two bad reviews you find online deter you from really examining a builder that you're impressed with after that initial meeting. So a couple of other things that you're going to want to get from this potential builder. You're just going to ask them, can I see your license and insurance information? And they should, here you go, Mr. and Mrs. Smith, here's my license. Here's my insurance information.
If you get the sense that they're offended in some way, that you are making these inquiries, that should tell you something. Again, I'm not saying they won't build you a beautiful house, but remember, this is a potential seven hundred thousand dollar transaction, and you're going to be in contact with this individual and his organization for six to seven months. This is one of the most stressful transactions of your life. I work with thousands of builders. I am impressed daily by their level of service and their care for their clients.
This falsehood that the contracting industry is corrupt, and the majority of contractors are crooked. It's just not true. It's just not. I would say that the statistics are pretty consistent with every industry. If you're a lawyer, you've got 95% of the lawyers are fantastic, and 2-3% who aren't so great, and then you have people who shouldn't be lawyers.
The great thing about our economy and the way things are moving in our economy, in this fast-paced on-demand economy, if you can't deliver for your clients as a builder, people stop asking you to build things for them. You have this great machine at your disposal and never forget, you know, as a consumer, you know, satisfaction is instantly transmitted. Look at my beautiful cabinets, my builder installed today. It's gone in 5,000 people get to see it. The same thing goes for my builder. He didn't return my phone call for three days. Swoosh! There are some fantastic builders out there. Take your time. Look at their work. Remember, you are in charge. This is your money. If you decide to hire this builder, he is employed by you to the tune of two, three, four or five hundred thousand dollars. I know I keep repeating it because something happens in a construction project where I've just seen people forget. I'm not saying you have to be rude or overbearing cause I know that's not you. I want you to be aware and the right builder will present himself to you and you'll know it. You will, you'll know it and you will enter an agreement with him, or she and they will build you your dream home.
It will be a very pleasurable experience with a little bit of stress. Construction is one of those things. Development does not take place in a controlled environment. There are a lot of moving parts to a construction project that your builder has to manage. So there will be things that will happen that will be entirely out of his control. Being a professional builder, he will keep you informed. He will keep you abreast of everything that's going on. So that's the best presentation of finding a builder that I can give you. I don't want to put it down to follow your gut because that's not necessarily accurate. I'm banking on your intellect to know. I want to speak to people he has built homes for in the past. I would like to see the homes he has constructed, and if he's going to take me on tour of houses that are currently under construction. Then when he's not around, drive by and take a look. You know, you need a couple of weeks to see the change in a construction project, especially the residential construction project.
So let's say you find the builder that you're looking for, and you follow those things. You follow your heart, you know, you do the intelligent thing. When you're getting ready to conduct a high dollar transaction, you check references; you examine the work, you consider the credentials. What are the qualifications to handle this particular project for you? The builder will freely provide you with all of this information. If they don't, well, I don't need to tell you what that means. You already know you'll make the right choice. You'll know it.
Now we get into the contract, the agreement between you and the person you're going to give potentially a half a million dollars, to deliver your house. Again, remember you're in charge. The structure of the contract. What are your obligations? Are his responsibilities clear? A vitally important document in this transaction. Your builder has a contract. He's going to write it up, and he's going to present it to you, and you're going to read it, and then you're going to hand it to your attorney and they're going to read it. Let me repeat that. You're going to read it and then you're going to hand it to your attorney, and they're going to read. If you don't have an attorney, you know someone, anyone that you trust, have them read this contract. I'm not saying there's anything wrong with the contract, it's probably a valid standard contract that this excellent builder has been using for years.
I sit in the middle of the bank, the builder, and you, the borrower. I have done this thousands of times. This particular document is one of the things that gets overlooked far too often, in my opinion. It doesn't have to be a lawyer, but it has to be someone who's not affected by the excitement of the transaction. Just have them read it and they'll ask questions. You know, things like, how are you going to pay your builder? How often are you going to pay your builder? Is there a deposit required? What does that deposit entail? Is it a cost-plus contract? Is it a turnkey contract? Do you get to pick your appliances? Do you get to pick paint colors? We need to confirm the details. Cause we're here now. We have the land, and we have the plans, we've chosen a builder. Now we have to get down to the nuts and bolts of what our relationship, our responsibilities are going to be for the next six months. So there's no item of your concern if it's a concern of yours, get it clear in the contract.
Professional builders have run into all of these things throughout their careers. So their contracts are probably pretty solid. The great thing about a building contract, it's not like going to buy a new car where it's just the process. This is the agreement; this is the financing; it's not really like that. A contract to build a house is pretty flexible. There are things in there that that that can easily be adjusted to suit your desires. The builder may have a few things to say about X, Y, and Z. I'm not going to say they're fluid, but you can certainly adjust it to make sure that you're comfortable and you understand completely everything that's written in that contract. It's just essential. It's just something that you want to know. You're going to want to be comfortable with moving forward and your builder will do everything in his power to make you satisfied with the contract.
The contract documents are more than likely going to be the foundation for financing this project. There are amazing builders out there, and you will find him or her. Just remember it's your money, it's your house. Get references. See work. Get license and insurance information. None of these are inappropriate questions for a builder. They'll have this just sitting on their desk. They'll pick it up and say, here you go. Call this person. Call that person. When you call these people, ask them about their experience with this builder.
The contract, you get to read it. If you have an attorney, have your attorney read it. If you don't have an attorney, have a supportive associate who's looking out for you. Go through it with you. Don't scan it. Sit down at the table and you guys go through and you take notes. I don't understand this. Question for the builder? What does this mean? This is a question for the Builder? He or she will answer all of your questions. This is an exciting process. By this time, you start to feel it! You've done your work, you know how much money you can get your hands on, you've got your dream house set up, you know where you want to live, you have a plan for the land and now you're interviewing someone for the most critical job of your life. You're going to do great.
If you have any comments, if I missed anything, if there's a builder out there who sees this and wants me to add a component that I've missed, I get it. Anything I can do to improve the relationships between the consumer, the building industry, and the financing industry in this world of construction, I'm an open book. Let me know.
I look forward to seeing you soon.