How to Select a Builder
| To begin you search for the right Builder, start by talking with your family, friends, and neighbors. Ask for their recommendations and compile a list of possibilities. From the list of results, you’ll find links to MABA members’ websites that you can explore to get a sense of what their companies are like and the types of homes they build. Attend MABA events like the Home Products Show™, Parade of Homes™ and Parade of Condominiums™ to talk with builders and see their work. Visit new construction open houses. If you are not familiar with making observations about the quality of work in a home, take along someone who can help you make those judgments.
If you’ve already selected a lot on which to build your home, you can also contact the homeowners in that neighborhood. If it’s the time of year when folks are out in their yards, it’s a perfect time to walk the neighborhood asking questions. Stop by on a Saturday morning when many people are outside doing yard work. Introduce yourself and ask questions. You could also visit the offices of the municipality in which your home will be located to inquire about the builders you’re considering.
If your circle of friends and acquaintances includes a trusted Realtor™, that person may have a good pulse on the marketplace in your area and may recommend a Builder(s) that may be a perfect match for your needs. |
| Check to see that each company on your list of possible candidates has a permanent address in your community. Then it’s time for some computer work. Login to the State of Wisconsin Department of Commerce website where you can determine if the builder has a Dwelling Contractor Qualifier Credential. This is a credential required by the State that requires builders to complete a certain number of hours of continuing education. While contractor licensing is not required in Wisconsin, the continuing education that the Qualifier Credential represents is a requirement. Here’s the website location to check on the Qualifier Credential: http://apps.commerce.state.wi.us/SB_Credential/SB_CredentialApp.
In addition, if the builder has employees, you’ll find the company listed as having a Dwelling Contractor Certification. Although similar in name to the previous credential, its purpose is completely different. This certification shows that the builder carries the required insurance for its employees. The website location to check on this item is http://apps.commerce.state.wi.us/SB_Credential/SB_CredentialApp.
Next, go to the Wisconsin Corporations website to check the status of the builder’s company; www.wdfi.org/apps/CorpSearch/Search.aspx? is the website location. You’ll be able to search by the company name and location. Next, check the online court records system to learn about any outstanding legal issues; http://wcca.wicourts.gov/index.xsl is the website location.
You could also explore other reference sources, such as Angie’s List, GuildQuality, the Better Business Bureau, etc.
Ask for a list of suppliers and banks the Builder works with. Call these references to find out if the builder pays bills on time and is in good standing with the companies with whom s/he does business.
Do not hesitate to talk to the Builder you are considering about the information you learn. Without discussion you’ll be unable to benefit from knowledge of any special facts and circumstances related to the information you’ve found. Use your personal business judgment to weigh the various factors in your selection.
(Note: If yours is a remodeling project rather than a completely new home, you can call the State of Wisconsin Department of Consumer Protection at 608-224-4960, or visit that department at 2811 Agriculture Drive in Madison, to check on remodeling complaints filed within the last four years that were justified by Consumer Protection. Use your personal business judgment to weigh the information you receive.)
By this time, you may have narrowed your search to one builder or several. If you have discovered multiple candidates you’d like to consider, set up an appointment with each one. Remember to keep the following items in mind. |
| | You will communicate frequently with your Builder throughout the construction process, so choose a builder with whom you feel comfortable working and whom you feel truly listens to you and understands your needs. You’re looking as much for the right person to do the job as you are for the right products. If a person(s) other than the Builder will be your primary contact(s) after you sign a construction contract, be sure to meet those who will be closely involved. Choose a Builder you feel comfortable communicating with and whose personality and building process blend with your expectations. |
| One of the best ways to conduct research is to ask previous customers. Ask the Builder for a list of references from customers they’ve worked with on projects similar to your own. Even if the Builder provides only names of customers s/he believes were well-satisfied, if you have a large enough list of references to check, specific questions will likely bring any areas of concern to the surface. Naturally, weigh the references’ comments with your own judgment, since perceptions of particular situations can vary significantly. What one customer defines as a crisis could be another person’s vague recollection of a small issue. The more people you talk with, the better the cross section of opinions you will receive.
Ask the references about the builder’s timeliness in completing the work, the quality of work, and response time if followup calls were needed. Ask references whether s/he would ever work with that particular Builder again. You’ll find a substantial list of suggested reference questions at the end of this article. Customize the list to suit your needs. |
| Because builders associations bring together experts from all facets of the building industry, members have the opportunity to learn about the latest trends, educational opportunities, and technologies in the industry. As with any professional trade association, membership in a home builders association is voluntary, and is a choice that requires the commitment of membership dues.
The individuals and companies that join their local builders association have sought out the services the association provides. In addition, association members often volunteer their time on the association’s committees and Boards of Directors. Many associations include this information on their websites, including the Madison Area Builders Association, www.maba.org. Select the "about MABA" tab for MABA’s leadership.
Check to see if the builders you are considering have earned special designations that indicate their commitment and educational achievement. Have they won awards? Are they participants in the Green Built Home™ program, a program that provides a certification that the company is actively participating in sustaining environmental resources.
Is the builder an active participant in the community? Have they participated in community service projects such as Hammer with a Heart, Green Built Home Makeover™ or other projects? |
| Talk to the Builder about the terms of a building contract. When you reach the stage of establishing the contract, specifications and plans, review them carefully. Know what is in your contract. Be sure all items accurately reflect your desires for your home. If they do, sign/initial each page of all documents, taking care to note all dates in the document. Proper paperwork at the beginning of the building process is an essential key to a successful building experience.
Know what you are getting for the price. Review your plans and specifications carefully to make sure you understand what the price includes. You’ll also want to make sure anything that you have requested above or beyond the base price is clearly indicated on your contract. On the same note, if the price includes features that you do not want, make sure that the contract reflects that as well.
Allowances: Know the details of any "allowance" that your contract includes. An allowance is a sum of money set aside in the construction contract for items that have not been selected and specified in the construction contract. These are items that vary from buyer to buyer depending on individual taste. Setting a realistic allowance amount limits conflicts down the road, so it is important that you accurately communicate your tastes to the builder. Some preliminary shopping will help you to establish what a realistic allowance is. Your homework goes a long way. Once the allowance is established and you select the items that are paid for by the allowance, if the total you spend on an allowance items is more than the amount of the allowance, you pay the difference; likewise, if you spend less than the allowance amount allowed, you’ll receive a credit for the difference at closing.
Know what is not included in your contract. Your construction contract may or may not include landscaping, sidewalks or driveway installation. Be certain that you have a clear understanding of the costs you will incur after your home is built.
Keep in mind that, "The bitter taste of poor quality remains long after the sweet taste of low price is forgotten." |
| While no one anticipates a dispute, disputes are a fact of business life. Examine your contract carefully for the process that you and the Builder agree to follow if you do have a dispute. Be certain you know the definition of the dispute resolution terms listed in the contract.
Review your contract carefully and use your business judgment to determine if you would like an attorney’s review as well. |
| | Review the contract for information about your lien rights. Understand that the contractor, as well as trade contractors and suppliers who provide materials and labor for your house, have certain legal interests in your property until they are paid. Talk to your builder and also to your lender about how and when "lien waivers" will be obtained during the course of construction. A lien waiver is proof that materials and labor have been paid for. |
| | You’ll want to be sure to know what type and length of warranty your builder will provide, and be sure to understand the process for how and when you will communicate to the builder any issues of concern that arise after your home is completed and the process that you and the builder will follow to address these issues. Know what kind of service you can expect after the sale. You do not want to wait until after you have purchased a new home to learn what is covered under warranty and what is considered maintenance for which you are responsible. Be aware that builders’ warranties will not cover issues that develop because of failure to perform required maintenance. |
| | Be cautious of unusually low-priced bids or builders who refuse to supply you with a list of references. If you choose to request bids from several builders, it is very important that you are making an "apples to apples" comparison regarding materials and workmanship. |
| | Sit down with your prospective Builder to talk about the home building process, what you expect, and the project from the Builder’s perspective. Discuss timeframes and deadlines and how both you and the Builder will deal with unexpected delays due to weather, etc. that could affect your move-in date. |
Here are some questions to use as a baseline in your reference checks.
Was the builder accessible or hard to find during your project?
Was the home completed when promised? If not, why?
Did the project stay within budget? If not, why?
Did the Builder follow the plans and specifications, or did the Builder make changes without consulting you?
Were there any surprises, or did the work go smoothly?
Did the Builder go over the allowances carefully to be sure the builder’s estimate included enough money to ensure the quality that that you expected?
Did the Builder follow up on any warranty work in a timely manner?
Do the home’s mechanical systems (air conditioning, heating, plumbing, electrical) function well?
Are your home’s utility bills reasonable?
Why did you choose this Builder?
If you were to build another new home, would you choose this Builder again?
Was the Builder easy to work with?
Did the Builder sufficiently supervise the job?
The energy and time you put into choosing a Builder will be well spent. Doing your homework will pay off in the months and years to come.
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