Construction Loan Article Center

Tuesday, November 21, 2006

11. Once I have selected a site, and I have my plans ready, how do I decide who is the best qualified to build my home?

Make sure the builder you hire is experienced. He or she should be someone who has a reputation of delivering high quality work within budget, in the time period prescribed, and in a LIEN-FREE condition.
It is also vital to ensure that your builder is appropriately licensed, if licensing is required in your state. If so, ensure that the general contractor you choose is licensed and has a history of building the type of home designed by your architect. You may ask for a copy of his or her license and crosscheck it with the licensing authorities or governing board in your area. You may also ask for references, which may include a list of supply companies with whom the aforesaid builder has done business and people he or she has built similar homes for in the past. You may also want to ask what kind of insurance the contractor carries, such as worker's compensation or, general liability insurance.

One way to get on the inside of the builder community is simply word of mouth through friends, family and even your architect. Once word gets out that you are in the market for a builder, you may get many offers from different people who want to build your house. It is important to keep in mind that the lowest bid may not always be the best deal. Consider when payments to the contractor are scheduled. Also, when comparing bids, make sure to compare the same materials and the amount of time for completion of construction.
Once you have finally narrowed your list to a few builders, you may consider taking bids. In order to get a good estimate, make sure each builder is provided with a complete set of the plans. Keep in mind that if you borrow money, a job finished early may actually save you on the interest of the borrowed construction funds. In the same vein, if the time period is extended, you may have to pay extension fees and more in the form of interest.

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