Essential Factors for Choosing a Home Building Company

Selecting a home building company as your luxury custom home builder is very much like hiring an attorney or a financial adviser when designing and building a one-of-a-kind luxury home.

It is vital that you clearly understand what skills, expertise, and personal qualities you are actually looking for in your home building company.

It is also relevant in your decision-making process to determine the delivery method and contracting relationship you are seeking to commission a custom builder.

Do you need your home building company to be intimately involved with the house design or are you limiting their pre-construction activities to bidding on a full set of detailed plans?

One of the first major decisions you must make do you want your luxury builder involved during the home designing phase or do you leave this task to an architect.

Much of this decision depends on the confidence level you have in your architect’s ability to design to your construction budget.

Most architects do a wonderful job creating custom house plans. But when the architecture gets outside of a rectangular form or traditional imaging, the price of the building can rise far more than the initial construction budget.

Learn about the 3 essential factors that are required choosing a home building company

Let’s discuss these essential factors in detail.

Trusted Adviser

Designing and building a one-of-a-kind luxury custom house is a rare and unique experience that less than .01% of the population ever have the chance to undertake.

This in part is due to the financial barriers that this process demands and also the emotionally challenging complexities surrounding such a project.

The house architecture and building process require multiple discipline proficiencies such as financing options, legal knowledge, insurance understanding, structural engineering and a natural sense of color and decor.

Depending on the amount of time you have available and your actual experience in designing and house construction, you may consider selecting a general contractor that best fits your business acumen and personal philosophy.

Being like-minded is a bonus if there are unexpected project difficulties or personal disputes that arise during the home design and building process.

If a solid personal relationship exists between you and your custom house builder, the personal problem-solving element of conflict becomes less important, thus leading to a constructive resolution.

Needless to say, it is very important that your home building company has years of experience and direct relevant knowledge of the different types & methods of construction that may be required to build the design of your new custom house.

This can be a significant issue if your house design departs from traditional architectural ideas.

The more advanced your architectural plans, the greater your builder’s experience in different engineering methods and materials will be demanded.

Unique and free forming design requires special skills and experience that local traditional architectural design does not demand of a competent general contractor.

When developing your list of home building companies, it is also helpful to seek professionals with a history of continued education and noteworthy accreditations.

This should be evident by trade association accreditations such as the National Association of Home Builders – Graduate Master Builder or State Certification Licensing that may or may not be required by local enforcement authorities.

These accreditations are a good indication of your builder’s commitment to his profession and clients as an expert in his field.

You will need to prepare some effective questions and do your homework in preparation for meeting your long list of builders.

Reviewing previous project work and discussions of business practices will be extremely helpful in narrowing your house builder list.

Reducing your long list to a short list provides you an opportunity to spend time discussing in greater detail how the general contractor will fit with you personally and how well they will fit with other members of the design build team.

One last critical point to discuss with your short list of house builders is getting a complete understanding of who in their organization will be responsible for the duties and tasks associated with building your house.

Who will be responsible for the design team?

Who will be inspecting the house construction?

Who will be conducting progress walk through meetings? etc.

This is relevant these days because general contractors task these responsibilities to their staff or outsource to 3rd party professionals. It is essential to understand what you will require from your builder.

If you want his personal input on the architectural process, you must insist on it. If you want him to personally do the critical construction cover up inspections, then you should make certain he understands your expectations.

Design Build Construction or Hard Bid Construction

The traditional method of contracting with a luxury custom home builder is to purchase a lot and hire an architect to create a house for construction.

During this time, you would develop a list of suitable general contractors and when the plans are complete, you would have them provide you with a fixed price contract amount for the construction of your new house.

This has proved effective for owners that have sufficient financial resources to absorb budget busting design elements or people that do not mind having their building plans redrawn.

It also has worked effectively for owners that can manage the conflict and associated cost between builder and architect after a design error has been discovered during construction.

Hard bid contract practices place large amounts of risk on all the parties in the design and building process.

It naturally creates a win/loss scenario for both the general contractor and owner by establishing a zero sum contract price between the parties.

It also creates a natural adversarial affiliation between house builder and architect, in regards to the architect’s artistic expression as it relates to the cost/design relationship.

This can cause the architect to be less willing to express new architectural features that may not have a familiar cost history for fear of repercussions such as redesign time and the unfavorable impression in the eyes of the owner.

The design build process method addresses these potential issues by forcing the owner, architect, and house builder to collaborate through professional and personal accountability.

From the early phases of conceptual design, the architect and house builder discuss the cost associated with non-conventional architectural features.

The owner empowers his design team to explore various architectural concept options that might not be offered for the mentioned reasons.

The design team develops the house plans to the owner’s wishes, thus evaluating cost engineering alternatives through the entire architectural process.

This results in fewer overall architectural hours, the house design construction cost aligning with the approved budget, and a much faster process track to permitting your new house construction.

Contract & Insurance Matters

There are many legal methods to contract with your general contractor. The most effective contracting method depends on many factors such as your financial risk aversions, the complexities of the design, your working relationship with your design team, building location, and site conditions.

The list goes on, but it is important to understand that there are viable contract options available to you for discussion as part of the house builder selection process.

Much like we have already discussed, the decision is principally based on your available time, your house design needs, your risk aversions, and most importantly your comfort level with your design build consultants.

Another essential matter to discuss is who and how will you provide insurance for the new house construction project.

You as the owner of the lot will be required to pay for property insurance and the house builder will be required to have general liability and monitor the insurance of the subcontractors.

The lender will require the property owner to maintain builders’ risk insurance during construction. These details need to be discussed at some point to avoid gaps or overlays in coverage.

As with any high ticket purchase concern, there are always trade-offs in the decision making process.

Also, depending on the character of the design team members and their service commitment to the owner, what you may think is the most cost effective solution can turn out to be the most expensive contracting method.

That is why following these essential steps in selecting your general contractor as a trusted adviser can be the most effective alternative for your luxury custom home building project.

Conclusion

There are 3 essential factors in selecting a home building company they must first be a trusted adviser and be able to take their recommendations with a high level of confidence.

Secondly, the builder must fit your home building delivery method. The company should be capable of providing you with the delivery method you are looking for.

Lastly, they must have a detailed scope of work, a contract, and sufficient insurance. Having these documents goes a long way in controlling and mitigating the owner’s risk in the building process.

Selecting and hiring the best custom builder requires developing an open dialog and a professional collaborating relationship between the custom builder and owner.

Obtaining these essential elements is limited in its scope, it does not replace the vetting process needed to hire your custom builder.