How to Avoid Pitfalls When Engaging a Contractor for New Home Construction

You are ready to build the home of your dreams and you have selected the perfect house plan, now all you need to do is find a contractor! Sounds simple right? Not so fast….Unfortunately, many people find that selecting a contractor isn’t as easy as picking a few names out of the phone book and getting a quote. The first thing that you need to do is go to the bank. Find out what amount you are preapproved for and determine what you are comfortable spending per month in payments. Often, these two numbers are not the same. Be sure that you are clear on the amount you are able to spend on your new construction project. Once you know the amount you are able to work with, it’s time to interview builders. Make sure you are clear with the builder you select on the number you are willing to spend and avoid going over budget.

Doing a simple internet search for a builder is a good way to get some names and information, but checking with the local chamber of commerce and the better business bureaus is a better way to find a builder. Be sure to ask builders you are interviewing for a list of references from vendors and previous customers and ask for their Dunn and Bradstreet rating.

Know that there are many components that go into construction pricing. While a builder can certainly give you a “best guess” at cost per square foot, there is no way to give an accurate cost until selections have been made. You would never call a car dealership on the phone and say “I’m looking for a car, what does a new one cost?” There are hundreds of different styles, colors, and options that factor into what that new car would cost. This same rule applies to construction. Once you have selected your house plan, you need to discuss what type of exterior you want? Vinyl siding will cost less than brick. What type of flooring will you use? Hardwood is more expensive than carpet. If the contractor you’ve selected isn’t asking you these questions before giving you a price, you should make sure you are clear on the type and quality of building materials he plans to use. You should also expect to see change orders that will absolutely increase the price you are paying to build your home. You also need to be aware that most builders will ask you to be under a design/build contract with them and to pay a deposit before going over selections and giving you exact pricing. Taking the time to formulate a real design and quote for any house is a time consuming job for more than one employee. Most companies today are not able to afford to task 2 to 3 employees to work on a job they aren’t going to get paid for.

It’s a better rule of thumb to be comfortable with the experience and quality of work of the contractor you select rather than basing your decision on the price you are quoted.

Join us for our “Issues in New Construction” seminar taught by James Oliver, President of Highlander Construction and Development, on Saturday April 14, 2012 at the Holiday Inn in Christiansburg. For more information on this topic and others related to new home construction. Contact LeeAnn Francis to register today francis.l@highlanderconstruction.com