New House Construction Tips
DEAR TIM: With mortgage interest rates at all-time lows, I feel it's best to build my new home now. I've got hundreds of questions about the process, but wonder if you can just give me some quick tips that will help me keep the cost down and avoid nightmares. I know many people who have regretted building a new home and who have been cheated by unscrupulous builders. Do you have a playbook that one can use to help avoid all or many of the pitfalls? Bryan P., Lowell, MA
DEAR BRYAN: Not only are mortgages at all-time lows, but you can also get a pretty good deal on some materials and labor. Many contractors are hungry for work as are their sub-contractors. It's a great environment to build. You'll just have to be sure to order many items in advance because many supply houses don't stock items like they once did. Delays in getting materials can really cause heartache and cost overruns.
I feel I can best advise you on what to do and what not to do by sharing a story. Just last week, I found myself in the West Indies of the Caribbean. The property manager for a foreign embassy had hired me to inspect a roof on a new home. This house was built four years ago, but the builder made multiple mistakes on the roof causing black tar stains to appear inside and water leakage in numerous locations.
My inspection revealed numerous mistakes. First and foremost, the plans and specifications for the job were very poor quality. The plans lacked detailed drawings of critical aspects of the complicated roof design. Too much was left to interpretation by the carpenters and roofers. Even though the plans were not the best, the builder deviated from them. These deviations lead to the water leakage.
The builder and roofer used the wrong underlayment for the sub-tropical location. The intense sunlight and dark roofing color caused the underlayment to liquefy and drip through cracks of the finished interior ceiling. A proper underlayment that would withstand the extreme heat was available at the time the house was built. The architect didn't specify this product, and the builder failed to read the written limitations about the product he used. Or if he did read them, he ignored the instructions.
The homeowner that built the house placed too much trust in the builder. She just thought and hoped he would do the right things. That didn't happen. The builder not only cut corners, but he also abandoned the job for nearly 18 months as it was nearing completion.
Another mission-critical mistake the owner made was giving the builder more money as the job progressed than he deserved. When the defects in the roof were discovered, it cost far more money to repair the roof than the homeowner still had in her possession.
As you can imagine, this defective roof and other mistakes made by the builder are causing the homeowner great angst, frustration and money. Sadly, all the problems could have been avoided.
The most important thing you can do when building a new home is to slow down at the beginning of the job and develop excellent plans and written specifications. Select every material and item you'll have in your new home. Avoid allowances. Allowances are frequently created by an architect because everyone's in a rush to get started. These budget items are hidden time bombs as the allowances are frequently unrealistically low.
What's more, a builder can say later that something you chose in the allowance he didn't plan for. He'll then charge you more money. By eliminating allowances you can get a guaranteed price for the home as the builder can't make excuses. During the bidding phase he'll study the plans and specifications. It's his responsibility to identify what he needs to do and how much it will cost. That's what professionals do.
Consider hiring an independent inspector to check the quality of the work as the job progresses. Don't rely on the government building inspector. Some areas don't even have building inspectors! Realize the building code is basically a set of minimum standards. Houses built to code are not necessarily well-built homes. If you hire this secondary inspector, be sure in your contract with the builder that your inspector's word is final and that he speaks on your behalf.
The contract has to have very specific terms with respect to payments. The best way to ensure that you don't get cheated by the builder is to have him submit with his bid a very detailed breakdown of all costs of the job. Both the materials and labor for each aspect are listed. The builder's overhead and profit are also listed. Years ago, I developed Contractor Hiring Guides that have all this information. They can be found at the AsktheBuilder Store.
You make each bidding contractor fill out this breakdown of costs. You can then quickly see if the costs for each item are weighted correctly. When it's time to pay the builder each month, you just pay him for items that are completed and satisfactory. This way you always have enough money to complete the job should he disappear.
You can watch a video that shows what's on a great set of blueprints at www.AsktheBuilder.com. Simply type "blueprints video" into the search engine at www.AsktheBuilder.com.