“There are thousands of builders in Canada, ranging from small companies building a few houses a year to large builder-developers constructing thousands of homes annually. Whether you live in a large urban area or a smaller community, you will have a number of builders to choose from. Each company may offer a different selection of homes. Some may focus on specific market segments or neighbourhoods. Others may specialize in particular types of homes or have certain distinctive expertise, such as adult lifestyle design or energy efficiency. And every company does business in its own unique way.” 1
Wow, so in all this mess, how do you find a good custom home builder?
1) The List. Develop a list of builders (10ish). Talk to family, friends, neighbours, and coworkers etc. Also talk with people with homes being built –just knock on a couple doors. If you’ve hired an architect, or sold your home with a realtor, they should be able to recommend someone; most professionals have a network of industry associates, but keep that in mind that the quality of the network mirrors that professional’s quality. It’s also a great idea to talk to some subcontractors and ask them how they feel about working with the general contractors. Contact the local and Canadian Home Builder’s Association, the new home warranty provider(s) in your province, and homebuilders in British Columbia and Quebec must be licensed, so you can find lists here too. Try going to home shows to see who has and is the latest and greatest. One word of caution, look for builders operating under the same company name for a long time. Steer clear of firms that incorporate under different names and entities.
2) Research. Using your list, research the builders online. Sites like the Better Business Bureau, or forum-type review sites, like New Homes Review, are great. Check out the builder’s record with local home building organizations, contractor associations or your province’s licensing board.
3) Initial Interview. Using your newly shortened list, call each potential builder and do a phone interview. Describe your project and ask the builder if they would be interested and able to do it. There are a lot of questions so ask him or her up front if they have time. If they are in a rush, your questions won’t be answered well. Here are some questions you should ask: 2
Click here to see a sample Interview Questions Sheet
4) Reference Check. Make sure you check into the references without the builder present. When you do, ask about any hiccups or problems, and the builder’s response. Was the builder cooperative, even-tempered and helpful? Did he listen to what you wanted or did just do it his own way? What happened when you wanted to make a change? What were his good points and bad points?
It’s also a good idea to find other homes the company has built and check them out. Try to find a good range, some older, and some newer. Go and talk with the owners and ask the same questions. Also look at the house — exterior for sure and interior if they let you. Especially with the older ones, see how they are holding up: Are there cracks in the concrete or in the brick? Are there stains coming down from any metal items or white chalky stains on the brickwork? Does it already look like a fixer-upper after only 4 years? If so, this may happen to you and your unbuilt baby. Oh and remember to bring a camera with you – a picture is worth a thousand forgotten words!
5) Site Check. Ask if you can visit some of the builders’ construction sites. Look at how the job site is maintained; a neat site shows organization. If you are allowed in, test the builder’s work: listen for sounds carrying through walls, see if the doors and windows are installed properly, check the baseboards and trims to make sure there are no visible seams or gaps, jump up and down on the floors to see if they are stable and solid, pull out drawers or doors to make sure they work smoothly, check that the insulation is plentiful and well installed etc. If you don’t know much about construction, bring someone who does!
6) The Proposal. Narrow your list to 4 builders, then invite them to the site (make sure you bring them to the site because once they see it, they may be able to identify site-specific issues or costs) and provide them with your construction papers and any other ideas. Share all of your ideas up front, don’t wait until the last minute because they could change the cost or even go beyond the ability of the builder. The proposal has to include at the very least: costs, staffing, alternatives, a schedule and potential problems they can foresee. Also, make sure the proposals cover the same items, you can’t compare apples to oranges! Also ask the builder to include the PST/HST in the quote.
7) Evaluation. Go through the proposals, your architect can help if you have one, and find the builder that most fits your needs, price range and personality. Never assume though, that the most expensive builder is the best or vise versa. Price quotes depend on a lot of different factors, such as builder’s schedule, efficiency, overhead and distance from the job.
8 ) Secondary Interviews. Conduct your post bid interviews. This involves asking each builder all the smaller questions. For example, what possible pit falls they see in your project, how do site visits work, what is the tentative schedule, and all the other questions you need to ask (and there will be lots)
9) YAY! You should now be in a position to select the right builder for you!
10) The Contract. Spell out every little detail together with your builder and you are ready to start! The contract has to include: A) The payment schedule (and make SURE you make all your payments right on time!) B) A clear start and end date, and insist on a penalty or late fee if completion is delayed past a given grace period (notwithstanding situations outside the builder’s control) and C) A clear rule about dealing with changes to the plans and cost overruns (i.e. make sure you have to ok a cost overrun. Finally, include a clause allowing you to hold a percentage of the price in escrow until all disputes have been solved; this gives the builder incentive to solve problems quickly.
**Small End Note. “Sometimes builders will come with the land that you buy. Builders often buy a group of lots within a new development, then they sell the lot with the stipulation that they will be the company to build the home. If you are in this situation, where you like the lot but you don’t know the builder, you better find out about the builder before you buy the land. If the builder turns out to be bad, you’d better look for a different piece of land.”
