Hire an Attorney

If you are getting ready to build or buy a new home, you absolutely must employ a contract and/or real estate attorney to help you review the builder's contract. It does no good to look at a contract once it has been signed. You find a good attorney by asking questions. Ask the attorney what he/she specializes in. Some attorneys do not do contract law on a regular basis. Avoid these folks if you can. You want a person who writes and negotiates building contracts on a regular basis. If they hedge on their answers, keep looking!

If you are in a bind and feel the need to sign a contract before it can be reviewed, then absolutely add a clause that gives you the right to show the contract to an attorney within five business days. The clause must also contain language stating that you have the right to revise the contract at the suggestion of the attorney you hire. Protect yourself!

Nightmares - Real Ones

I am hired on a regular basis by attorneys to act as an expert witness. It is my job to go in and see what went wrong on a job. Frequently I determine that the contract between the builder and the consumer is virtually worthless. The contracts contain little or no protection for the consumer or they contain vague language that can be interpreted in any number of ways. The poor consumer is often taken advantage of by the builder.

Think. Builders draft and sign contracts on a regular basis. They know certain tricks and tips. You, on the other hand, may be a contract rookie. If this is the case, it is worth $300 or $500 to get advice from a competent attorney. Keep in mind that if you find the right one, they have the contract clauses already written! They have been down this road before. With computers, it is often a matter of cutting and pasting clauses into a document. Find an honorable attorney and he/she will save you thousands and thousands of dollars. If you have to hire an attorney and a person like me after the fact to defend yourself in a lawsuit, you will see what I mean!

Plans - Get Good Ones

Having a solid contract is necessary. But having excellent detailed plans are just as important. If the plans and written specifications contain all of the things you want in your home, then the contract simply refers to those documents. They become a part of the contract. It takes extra time to develop great plans, but the process is worth it. Drawing good plans forces you to make decisions. If you wait to make these as the house is being built, you may be under all sorts of pressure. Your material options may be limited as well if you are forced to make decisions at the last moment.

The Bottom Line

You want my advice? Slow down during this aspect of your job. Mistakes made in the planning and contract stage WILL cost you thousands of dollars and possibly bitter memories that will never go away.

Invest extra time here and you will never, ever regret it. Do whatever it takes to get good plans and a fine contract attorney. They are out there, but just like all things, you need to turn over several rocks to find them!

If you want a trouble free building experience, one with minimal stress and anxiety, then you must have excellent plans and specifications. These plans may cost you several thousands of dollars extra at the beginning of the job, but they could save you tens of thousands of dollars in legal expenses and change orders after you run into disagreements with your builder.

Top notch plans and specs also help make the job go smoother. Subcontractors usually have fewer questions. There are fewer costly change orders. Good plans and specs also minimize job delays. A good set of plans forces you and the planner to make critical decisions in a more relaxed atmosphere.

Sources of Plans and Specifications

You can order a full set of detailed plans and specifications from me. I have a licensed set of plans from a top residential architect. The plans show you what a REAL set of house plans should look like. If you reproduce the detail, schedules, interior and exterior elevations, etc. on these plans, you will have an excellent tool to help you build your house virtually trouble free. Excellent plans and specifications help communicate what you want. These plans and specs can be purchased from my Online Store at my website - www.askthebuilder.com, or by calling 513-407-8727.

15 Helpful Construction Contract Clauses

• Deposit Clause: How much is the deposit? Is it refundable? Who gets it if the deal goes sour? If the deposit is your lot, who holds title to the lot? If you transfer it to the builder, it isn't your land anymore!

• Insurance: Who buys and maintains the fire and extended loss while the house is being built? Does the builder and all of his subs carry adequate Worker's Compensation? Does the contract say to provide copies of all policies? Does the builder have adequate general liability coverage? Does it cover mistakes or work deficiencies that show up during the warranty period? Does the contract state that you get a copy of his certificate of insurance so you can easily make a claim?
• Site Inspections: Are you allowed to visit your jobsite to check on progress and quality? Make it clear. You MUST be allowed to inspect. If it is not allowed or access severely limited, this is a HUGE Danger Signal.
• Drop Dead Date: What happens if the job doesn't start? Can you get out and get your deposit back? What happens if the job runs over? Do you get compensated for extra moving or storage expense?
• Change Orders: What is a change order? Can the builder make substitutions on products and things that do not cost in excess of say $100 without your approval? Spell out what is and is not a change. What is the absolute MAXIMUM amount or grand total of all change orders? State it in the contract so you have cost control.
• Definitions: Define what certain words and phrases mean. Make each word clear in the contract.
• Payment Clauses: When does the builder get paid? How do you know there will be enough money at the end of the job to bring in another contractor if your builder splits? Easy. Get a cost breakdown of the entire job as part of the contract. Each payment is tied to this breakdown. The builder only gets paid for work and materials that are in place in accordance with ALL codes and instructions! He can also get a pro-rata share of his profit and overhead as long as it is a line item in the cost breakdown.
• Warranty: Define the warranty. What is and is not warranted? What is and is not a warranty defect?
• Follow the Code: The contract must contain language that all work is guaranteed to meet the current building codes. These include the general code, the electrical, plumbing and heating/AC codes as well.
• Association Guidelines: The building code is a set of minimum standards. State that all work must also meet industry association guidelines. Many associations have extensive literature that is readily available for all builders to see and follow. It is also easy to understand.
• Manufacturers' Specifications: The contract needs to state that the builder will indeed follow all of the installation guidelines for each product he installs. What is so hard about that?
• Owner's Copy of Manufacturers' Specs: You need a copy of all written installation instructions for your records. They are easy to obtain. They usually come with the material when it is shipped. Have a convenient storage system in place or develop one. This is going to be a hard one, but it is vital if a defect is discovered later!
• Walk Through Inspection: When is it scheduled? It needs to happen several days or a week before closing. If it is too close to the closing, work WILL not get done before the closing. All work needs to be done - depending upon weather conditions - before you close.
• Plans and Specifications: Contract states that all work is done in accordance with the plans and specs. If you have excellent plans and specs, you are golden!
• Escrow: Contract states you have the right to hold back money for unfinished items including a pro-rata share of builder's profit and overhead. See why the cost breakdown is so important? Make sure you define who will maintain and administer the escrow account. If you state the lender, make sure they will do it.

At a Dead End

At first I balked at the idea. I thought that there wouldn't really be enough material and that the concept had been written about on numerous other occasions. A day later a light bulb went off. I remembered a conversation I had with a retired police officer at a holiday party four weeks earlier.

Asking the Right Questions

Donald Clark was the police officer. He had worked as a patrolman and detective in my village for many years. After retiring from full time police work, he decided to start his own business. Donald was smart. He used his many years of police experience to start a company that does pre-employment testing, polygraph work, psychological testing and scientific interviews. Some of the top companies in Cincinnati use his services before they hire anyone.

At the party, Donald told me some stories I couldn't believe. He mentioned that the key to obtaining information is in how you ask the question. "We all like to talk about ourselves," Donald said. How true that is!

Over the years, Donald has perfected the art of asking questions. For example, don't ask if a person has committed arson. You say, "Have you ever set fire to an object worth more than $10,000?" A person might respond, "No, but I once started a trash dumpster on fire." Answers spew out from people's mouths like that all day long!

I Became the Lab Rat

I decided to interview Donald for this column and bulletin. Donald agreed and asked me to come to his office. Once there, we chatted for a few moments. He felt that the best way for me to understand the effect was to conduct an actual interview with me. I agreed to be grilled.

The first few questions were routine. But then, he started throwing curve balls. When he asked me tough questions, I could feel my skin crawl. I told the truth throughout the entire interview. He wasn't pleased that I had driven down Section Road 25 miles over the posted speed limit! Well, I told him I wasn't going to lie!

If you want to hire the best employee or find out if a current one is still on the straight and narrow, call Donald Clark. He is simply superb! You can reach him in Cincinnati, Ohio at 513-891-8869.

See also 50 Contractor Interview Questions for questions to ask.

Related Articles: Find a Pro by Asking the Right Questions, Building & Remodeling Trade Magazines

Trade Magazines

If you have a superb public library, you should visit the periodical section one afternoon and start to browse. You will be amazed at the hundreds of trade publications.

Some of the publications are offered to members of the trade at no cost. They are supported entirely by advertising. There are many of these in the residential construction field. If you want to get the magazine and can't convince the publisher that you have a construction company, you often can still get the magazine for a modest fee in most cases.

Here are some excellent FREE trade publications if you are interested in them:

• Remodeling
  www.remodeling.hw.net
• Qualified Remodeler
  www.qualifiedremodeler.com
• Kitchen and Bath Business
  www.kbbonline.com

Here are ones that cost money but they are well worth it:

• Builder
  www.builderonline.com
• Professional Builder
  www.probuilder.com
• Fine Homebuilding
  www.finehomebuilding.com
• Journal of Light Construction
  www.jlconline.com
• Custom Builder
  www.housingzone.com
• Old House Journal
  www.oldhousejournal.com

Related Articles: Find a Pro by Asking the Right Questions, Asking Your Contractor Questions, Building & Remodeling Magazines & Associations.

Contractor Interview Questions - If You're a Millionaire, STOP reading now

Contractor interview questions are extremely important. You must convince yourself that you're hiring a person that will:

• respect you and your property
• is honest
• is trustworthy
• finish the job for the agreed-upon price to your satisfaction

Do Professionals Refuse to Answer Questions?

No, a professional understands your anxiety. She/he understands that many other homeowners have been taken to the cleaners by dishonest and bottom-feeder contractors. Shifty contractors will get uncomfortable very fast when you start to ask too many questions.

What's at Stake If I Just Hope the Contractor is Great?

Your money and peace of mind. If either of those two doesn't matter to you, then just sign the contract and get on with your life. If you don't care about losing thousands of dollars by hiring a dishonest contractor, then you can just stop reading now.

It's important to realize that you should have complete confidence you have the right person for the job. Don't make a decision based on hope. You only hope for something when you can't control the outcome.

You can control what contractor works for you.

How Did You Come up with These Questions?

I was lucky enough to interview a seasoned police department detective for this column. His name was Donald Clark and he had interviewed hundreds of people over his career about countless topics. "Tim, people love to talk about themselves. When you ask questions in the right way and the right order you'd be surprised what the person will gush out," Don told me during the interview. Don suggested many of the following questions as they open a window into the average person's feelings about all sorts of things.

You may want to modify the order of the questions. A question I propose may stimulate a question you feel is important. Remember, YOU control the interview.

The contractor is on the hot seat, not you. If at all possible, try to have a spouse present with you. Have the spouse ask some of the questions. Don't be shy. Remember, the contractor has sat through many a presentation, while this may be your first attempt.

Open up the discussion by telling the contractor, "It's important to me/us that I/we get to know you. I need to trust that you are the right person to work in my home." Words similar to that set the stage quite well!

• How many people - direct employees - work for your company?
  This answer will give you an indication of company depth.
• What are their job descriptions?
  This answer tells you if the contractor has adequate support staff.
• What do they do each day?
  You should get a feel if the people are full or part-time.
• How many jobs does your company have in progress right now?
  Will your job be lost among these?

• What is the average number of jobs you do at the same time?
  Does this number seem in line with the amount of support staff
• Do you have any other outstanding bids right now?
  If these turn into jobs, will your job drop to the bottom of the list?
• Do you work from your home?
  This can be a sign of under-capitalization. I never had an office of my own, so ask more if this is important to you.
• How do you manage your jobs on a day-to-day basis?
  All jobs require management. Ask for details! Who checks for quality, mistakes, and progress?
• Who will be on-site and in charge of my job each day?
  Get a name and cell phone/pager number!
• Have you or your company ever been sued before?
  The truth is available in the courthouse records!
• Have you or your company ever sued anyone or filed mechanics liens before?
  What happened? Why the disagreement?
• What is the worst building experience that happened to you?
  Listen! What is the story behind the tale?
• What has been your best building experience?
  Listen! What is it he/she likes to do? Ask why.
• What are your business ambitions?
  Are the words quality, customer satisfaction in the answer? If you hear, "...make a lot of money..." WATCH OUT!
• Have you ever been on unemployment before?
  Many people have. Ask why, how long.
• What is the longest amount of downtime you experienced between jobs?
  A contractor in demand has little or no downtime.
• Who were your two best customers? Why?
  Listen! Do you sound similar or opposite?
• Who were your two worst customers? Why?
  Listen very closely..... do you sense a conflict on the horizon?
• Who do you most admire? Why?
  It better be the person's spouse or a close family member.
• Do you volunteer to work at your church? Describe.
  Need I say more?
• Do you have children? Ages?
  If so, does the contractor seem interested in them? Sense any negativity?
• Do you do volunteer work at your child's school? Describe.
  Coaching, PTO, committees, etc?
• Have you/your company ever caused/been involved in an accident that caused someone to receive hospital treatment or be hospitalized?
  This is ANY accident. Automobile, construction incident, etc.
• What is the dumbest thing you ever did?
  Was this recent activity or a childhood mistake?
• What is the smartest thing you have done?
  Look for wisdom here. Do you sense intelligence or luck?
• May I please inspect the inside of your truck or car?
  This tells/shows organizational skills.
• Do you use sub-contractors?
  Most contractors do.
• What is the average length of time they have worked for you?
  You are looking for 5 or more years here!
• Do these individuals have Workman's Comp & General Liability coverage?
  Better be a "Yes!
• Can you supply me with the individual certificates from each company to prove this? When will I have them?
  Stop the conversation and write down the day he says they will be delivered.
• May I please see your driver's license?
  He/she may not have one! DUI, suspension, etc. Stranger things have happened!
• What are your two favorite hobbies?
  Everyone needs to unwind. Listen to things that you like.
• What is the title of the last book you read?
  Listen! This answer tells you much about personal interests
• What trade magazines do you subscribe to?
  Ask to borrow some back issues for design ideas.
• Do you have Internet access?
  In today's world, it should be a "Yes!"
• What are your 2 favorite building & remodeling websites?
  Go visit them. See what you can learn.
• When was your last vacation?
  It better be within the past 18 months.
• Where did you go?
  Modest or extravagant
• Do you plan to vacation during my job?
  If "Yes", who will manage in his/her absence?
• What do you want to accomplish in life?
  Listen again. Is it a selfish answer or one that has a sharing theme?
• Do you belong to any professional associations?
  A "Yes" would be preferable, but not necessary.
• If "Yes", do you attend regular meetings or hold an office within the association?
  Active membership tells you a Pro is answering the question!
• Do you attend national trade conventions?
  Ask where and when. Where is the next one? Go to www.nahb.com to find out!
• Have you taken any continuing education classes?
  In what areas?
• Where do you bank?
  Is it local?
• Do you have a separate company bank account?
  Mixing funds in one account is a recipe for disaster.
• Do you supply notarized affidavits or release of liens BEFORE I give you payments of any kind?
  This must be a "YES!" It is unconditional.
• Do you invest in the stock market?
  Doesn't have to be a "Yes", but is this person a forward thinker - a planner?
• Who are your top three material suppliers?
  Contact the general manager or accounts receivable person at each place. Is the contractor in good standing?
• Have you ever declared bankruptcy or operated a company under a different name?
  Listen to this answer!

Construction Deficit

Homeowners across the nation are victimized each and every day by builders and remodelers who really don't know what they are doing. These builders and remodelers are often referred to as non-professionals. Well that is true, however, very few people that I have come into contact with have ever discussed the root of the problem.

When I decided that I was going to be a builder and a remodeler, I just started doing it. Fortunately, I didn't try to tackle projects that were totally beyond my capabilities. But, I constantly was experimenting with products and techniques. I was an amateur chemist, as I would apply paints, adhesives, add water to concrete, etc. without bothering to really find out what was happening. In many cases I found out very quickly what happened, as the installation was botched. I licked my wounds, repaired the damage and went on. It didn't take too long to figure out that these mistakes were costing me money.

Homeowner Losses

The problem, however, is that the vast majority of the time, the problems associated with improper installation appear long after the installer has cashed your check. You are left holding the bag. My guess is that millions of dollars a year are spent on premature replacement and repairs of materials that have been improperly installed.

You can avoid this happening on your next building or remodeling project. The trick is to hire an individual who has decided to take his or her professionalism to the highest level. These individuals are the ones who invest time in reading. They take the time to read exactly how a particular item is supposed to be installed. They read as much as they can about new products and construction techniques. More importantly, they read the technical trade journals that specifically explain just how some things work in building and remodeling.

Examples

For sake of discussion I will give you some examples. Concrete is a very popular topic with many of my readers. Every time I write a column concerning concrete I get a big response.

I attended a conference sponsored by the Portland Cement Association in the fall of 1994. We discussed the installation of residential concrete. The consensus of the group was that over 90 percent of residential concrete is finished improperly! How, might you ask? It's very simple. Almost invariably, concrete finishers will sprinkle water on a slab as they finish it. They do this because the concrete is getting away from them. They do not realize that this added water is severely weakening the top 1/8 inch of the concrete. This added water is diluting the amount of cement at the top of the slab.

The reason that many finishers continue this practice is because it was the way they were taught! Too much information in residential construction is passed along verbally or by experimentation. Very few individuals have self-educated themselves or taken the time to read the many fine pieces of literature that are readily available.

Another example is lumber shrinkage. Just about everybody knows that lumber shrinks as it dries out. But how many builders and remodelers do you think know that this shrinkage is not equal in all dimensions of a piece of lumber? Across which dimension does a piece of lumber shrink the most? Why is this important to know?

I'll tell you why it is important to know. If you have been a victim of drywall nail pops, this information could have helped you. If your new cedar or redwood siding developed splits this could have helped you.

Just for the record, wood shrinks the greatest amount across the face of the grain. It shrinks the least (actually hardly at all) along its length. If you visualize an 8 foot long 2x4, this means that the 2x4 will virtually always remain 8 feet long. But, when shipped from the log mill, most 2x4's measure 3-1/2 inches wide. If a particular 2x4 has not been adequately dried, after installation and drying, this 2x4 might measure 3-5/16 inches! It lost 3/16 inch! And you wonder why seams open up in your hardwood floor, or why plywood buckles. Remember, this same movement will occur in the opposite direction when wood swells!

In the May 20, 2016 AsktheBuilder Newsletter, Dorina got ripped off by a contract installing a replacement septic tank. CLICK HERE to read her story!!

For many years, I was oblivious as to the anxiety that homeowners experienced concerning the selection of a builder or remodeler. This anxiety was brought to my attention during a consumer panel discussion in Washington D.C.which took place in the spring of 1993. The homeowner panelists who answered questions indicated to the remodelers in the room that they were frightened about the prospect of hiring a contractor. They made it very clear that large sums of money were at stake and they were placing their most valuable possession, their house, in the hands of a stranger. My guess is that you have or are experiencing this same anxiety. I hope the following tips will aid you in spotting the professional.

Tips for Finding Professional Contractors

First and foremost, professional contractors are also business people. This is a very important quality. Your remodeling or building project is also a major business transaction. The professional will have the staff or the ability to handle all of the required paperwork in a timely fashion.

A professional will comply with all laws and regulations, both on a local and national level. Generally speaking, these laws are in place for the protection of people and property. A professional will respect these laws.

A professional will execute all change orders promptly and in writing. This practice helps to minimize confusion and disagreements.

A professional will return phone calls promptly. Twenty four to 36 hours is a reasonable expectation. Because a contractor may be tied up on a job or in a meeting, instantaneous response is not always possible. However, you will find out that when dealing with a pro, you will rarely need to phone him or her. They generally have things under control and you already know in advance what is supposed to happen.

CLICK HERE to get FREE & FAST BIDS from local professional contractors who can build your new home.

Professionals are knowledgeable concerning project financing and how your project will enhance the value of your home. Studies are done on a regular basis which indicate the relative value of improvements. A professional is informed about these values and how and where to obtain financing.

Professional contractors are polite, well mannered and well groomed. They are clean and courteous. They respect your privacy and do not indulge in off-color jokes. Professionals refrain from profane language and will not pollute the air with loud or unwanted music. A professional who wishes to listen to music will request permission to do so and will listen to tasteful music that you also approve of.

A professional contractor is considerate of your house, its furnishings and the grounds. He or she will provide protection for all of the above when work is in progress.

Professionals will notify you in advance of disruptions to utilities. This will allow you plenty of time to prepare. These disruptions will generally be timed so as to cause minimum disturbance to your lifestyle.

A professional will not resort to 'special deals' in an effort to sell you his or her services. Their work and past record should be enough to prove to you their value. A wise homeowner recognizes that quality comes with a price tag. A professional does not have to 'discount' his or her services.

Professionals pay great attention to detail. They take notes at meetings. Nothing is left to chance. Follow up is a constant driving force. A professional will, in most cases, keep you abreast of all developments. There generally are no surprises.

A professional is honest. Integrity is a given. A professional will readily admit to a mistake. He or she will not hesitate to tell you what will be done to correct the mistake. There will be no excuses.

Professionals know the value of clean job sites. A clean jobsite is a safe jobsite. Production takes place at a higher rate. Clean-up is done on a daily or regular basis. Provisions are employed to minimize and control the spread of dust.

A professional will only request deposits for special order non-returnable items which need to be ordered in advance. A professional will sometimes request a deposit for other services or permits which are obtained prior to the start of work. These services, however, must be exclusive and must be for your benefit only.

A professional will take excellent care of his or her vehicle. Tools and equipment are also maintained on a regular basis. Organization of materials, tools and paperwork is evident on a professional's job site. There is never confusion.

Professionals pre-order materials. They call ahead. Professionals will readily make use of a supplier's free delivery policy. A professional will plan ahead so that materials are on site when needed. A professional generally never has to resort to 'crisis management'.

A professional charges a fair profit. This profit is then reinvested back into the business. Professionals know that they need to constantly upgrade their capital improvements. They want to continue to be in business. Profit is the only way to ensure that this will happen. They realize that they have to invest this profit, not take it in the form of a payroll bonus.

Professionals respond promptly to legitimate warranty or service calls. They do not hesitate to fix problems. They do not push blame onto something or someone else. They simply correct the problem and get your life back to normal.

A professional does everything possible to keep an appointment. They realize that you have adjusted your schedule and plans in order to meet. However, things happen. When and if an appointment has to be rescheduled, a professional will give adequate notice.

A professional will not hesitate to give a job cost breakdown. He or she knows that this often is the way in which you can see why the other contractors are the low bid. A professional has nothing to hide.

Professionals have all necessary insurance. Their policies are up-to-date and they can provide copies of all certificates of insurance. Frequently, professionals will automatically provide copies of their certificates with their quotations.

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In states that require licensing, professionals are always licensed. They can provide necessary documentation to prove that their license is current.

Professionals will provide a detailed description of the work they intend to do. There will be no questions as to who, what, when, where and why.

A professional will provide accurate start and completion dates. In the event of a change order during the course of work, a professional will readjust the completion date accordingly.

Professionals do not use high pressure sales techniques. They do not have to. Their work and reputation are all that they need.

The contract which a professional uses is clear and concise. It clearly spells out all responsibilities. Often it will have an article within the contract which allows for a fair procedure to settle any disputes.

Professionals possess a wide grasp of knowledge concerning building and remodeling techniques. They are experienced with past building practices. Not only are they aware of current building procedures, they are also aware of future trends.

A professional is often an active member of a trade association. Often, a professional will participate in seminars or other opportunities which will provide for continuing education.

Professionals can provide you with countless references. These individuals can be readily reached and will tell you both the contractor's strengths and weaknesses.

Often, a professional is a member of his or her local Better Business Bureau. They will often have a very good record. However, in the event that the B.B.B. tells you that a complaint or complaints have been filed, don't be alarmed. The more important issue is to ask whether or not the complaints have been resolved. A professional will resolve problems and the B.B.B. will be notified after the problem has been corrected.

CLICK HERE to get FREE & FAST BIDS from local professional contractors who can build your new home.

Related Column:

Hunting For a Professional

Column B020