Choosing a Builder

You have designed your new building to your specifications now time to decide on a contactor/builder to make your dream building come true.  It is critical to hire a builder with whom both you and the architect feel comfortable working, but that is not the only criteria.

There are many issues to investigate when hiring a builder.  One of the most important factors is the builder’s reputation.  Do former clients have good things to say about the builder?  Has the builder ever been reported to BBB.  Can you easily find projects that the builder worked on and look them over and question the owners?  Another area to check is the type of construction with which the builder has the most expertise.  Does the builder specialize in home residences, retail, healthcare, manufacturing, high rise, etc?  What type of license does the builder hold?  In some states different classes of contractor licenses limit the type and cost of the construction the builder may undertake.  Once you have narrowed down your choices to three, contact each builder and set up an initial meeting with the expectation of narrowing your choice down to one.  Always do additional research based on the information gleaned during the meeting.  If possible you should have your architect and Project Manager included in the meeting.  You should also request the builder’s sales representative, expected project manager, and billing manager also attend.

Prior to your meeting it is extremely beneficial to hire a contract attorney who has expertise in construction contracts.  Your lawyer will make sure you are properly protected during the building process, but you should ask your attorney to let you know any key points that should be addressed during your meeting related to the builder’s contract flexibility, for example retainage, completion date penalties, etc. Ask your attorney if they have worked with any of the 3 builders and if they had a positive or negative experience.

During your meeting with the builder, you need to ask the following questions at a minimum.

  • What experience in building the type of structure?
  • Are they licensed in the State of building construction?
  • What roles does the builder sub-contract versus handles in-house?
  • Will the builder have a designated Project Manager, if so how long has the PM been with the firm and what are the PM’s credentials?
  • Notify the builder that you will have an assigned project manager on this project
  • What is the problem resolution escalation process within Builder
  • Understand the builder Fee structure; Escrow structure and payment (release of funds) and billing and support documentation process
  • Establish completion date, Always!!!!!
  • Understand whether the Builder can meet your time conditions based on their other competing construction projects

Obtain from the builder a list of recent references specific to the type of construction you are considering.  Contact those references and request a meeting time to walk through the building.  While meeting with the owner understand how and why they chose the builder, what did the builder do well and what issues were encountered and how were they resolved, was there any billing issues, and were they completely satisfied with the building.  When asking your questions to the owner, make the questions open ended allowing the owner to open up instead of short quick responses.  The building owner should be talking a lot more than you.  You may also check with the Better Business Bureau for any filings against the builder.  Some states also list license information on their web sites and often this includes any complaints that have been filed.

It is very important to do your homework when hiring a contractor/builder. This is a person who you will be dealing with on a daily basis and it is critical that you get as much information beforehand to try and protect you from problems after the construction begins.

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