Help for consumer dealing with builder
toddhunter
| Posted in General Discussion on
I’m about to enter into a contract to build a house on a lake with a builder. The builder has built a number of houses on this lake and we have seen some inside and out. We really like one that appears to have quality features, maple cabinets, nice molding, a couple of arched doors etc. We have seen the lot he owns and he says he can build the same house on the lot for a certain price (with any variations agreed to). We’ve given him a wish list and he is going to set it out in an attachment to the contract. He has allowances for cabinets, appliances etc. We’ll choose upgrades and downgrades (we want a screened porch, may forgo a second fireplace).
That’s the background. Any suggestions would be appreciated.
Thanks.
Todd
Replies
How many people has he built for that you personally know, and have highly recommended him?
Check him out both through the BB, court clerk of court, the states contractors licensing division. If the BI will tell you ask him if he has problems with this person (they might not tell you).
GET your lawyer to review the contract and any warrantees. That is not the banks lawyer who you have to pay but get YOUR own lawyer.
Check the contract that the water barrier (house wrap), window and door flashing is included in the scope of the work part of the contract. Make sure the specks of how close to straight to a string is he going to build how square, how plumb how flat, how levele is he going to build. get it spelled out.
Be your own inspector general and check to see how close to the quality the house he said he was going to build for you. If you don't know how to hire some one to do that. You can't count on the BI to do that for you. It is not that they would not like to but lot of the time the Building Inspectors department are under funded and under manned, under educated in the code besides that they don't check for quality. The money from all the fees and permits go for other things like a swing set in a park.
Who completed the drawings for the house, and who will be responsible for reviewing the changes from the drawings as you add/subtract according to your desires? If it’s the builder in either of these cases, then find a qualified third party to review the documents. If what you have asked for is not very specifically expressed in the drawings, then it becomes very difficult to enforce that term of the contract.
Look for a lawyer who does a lot of real estate/construction law. Often they will charge a flat rate that covers a review of all of the contract documents as well as any basic consultations that you may need as construction proceeds. They can review draw requests, and make sure that lien waivers are being properly executed by both the General Contractor and his subs as the project progresses.
A schedule of values is one of the most important parts of the contract, and the more accurate it is the better off you will be. The schedule breaks the project down into different categories (HVAC, Electrical, Framing, etc.) and assigns a $ value to each category. When the contractor goes to make a draw, he should provide you with a certificate stating the amount of work completed in each category (typically expressed in a percentage). Multiply the percentage by the scheduled value, and this shows how much the contractor is due at each draw. At each draw a thorough inspection should be completed to insure that the amount reported as complete is accurate. If you do a good job in this area, you reduce the risk of having the contractor walk away from a half completed project with more than half of your money.
As stated previously in this thread, check with you local clerk of courts – try to find out if they have any suits pending against them, or a history of litigation. If they do, see what you can find out about it (construction is a very litigious industry, so don’t automatically assume that one lawsuit means the guy is bad – try to find out both sides and then use your judgement). Also, check with your county recorder for any records – oftentimes disputes have a way of winding up part of the public record. I think most counties have both of these functions automated and online.
Finally, don’t just delegate the whole thing to another party (attorney, banker, etc.) because you are out of your comfort zone. Use those other relationshiops, but also rely on your own understanding of the project and ask questions when you don’t understand. A good contract should be comprehensible by an average joe, and nobody is better positioned than you are to understand the specifics of this project.
Thanks for all the replies. It will be interesting to see what the contract, plans and specs look like.
Todd