Selecting a builder and signing the right contracts is key. We can help you in the interview and selection process to make sure you have the right builder contracts, structure, and protection you deserve. Watch the video below to learn more!
In this video, I talk about how to hire the right builder. I’ll reveal more than just good interview questions and techniques. I’ll show you the importance of bringing a few builders into our unique On-Budget Pathway process.
So, how do you find the right builder to get the right price from a builder to build your dream home? First, I want to show you the 3 ways to secure a price from a builder.
METHOD #1 — interview and select your favorite builder to estimate your completed designs.
METHOD #2 — submit your completed designs to multiple builders via the “Bid Process.”
METHOD #3 — or, you follow our On-Budget Pathway.
The reason I mentioned “completed designs” several times is because builders can only give you an accurate cost to build your home from completed designs and completed finish selections. This is true no matter which method you choose to price your home. Anything left unaccounted for means those costs have not been included in your builder’s estimate, which means you will pay via “change order” for anything you add to the designs and selections after you’ve signed your builder’s agreement. These payments must usually come from the homeowner’s personal funds because a construction loan does not account for them.
The reality is that if you design your home without an on-budget strategy prior to design, then the designs are already over-budget, complete or not, and the builder is simply going to report how much more you will have to pay to build the designs. As I’ve said several times in previous videos, builders don’t control costs, they only report costs. Your designs and finish selections control cost. So, any attempt to have a builder (or the Bid Process) give you the price you want will only result in one of two outcomes; either 1) they will reveal how much over budget the designs are, or 2) a dishonest builder will tell you what you want to hear by price-fixing his estimate with under-valued allowances.
Allowances are budget categories for all the parts and pieces to build your home. There will be allowances for the foundation and framing, for cabinets and appliances, and for flooring and tile. All builders know they can make any contract price “magically appear” by adjusting allowances to result in the price they know you want to see. Good builders will not do this, but the danger is that some will and do. Yet, you won’t realize you’ve been duped until it’s too late. You’ll be committed to building the home by then. The dishonest builders know you’re most likely not going to fire them and find another builder to pick up the process. However, even if you did, it wouldn’t make a difference anyway. The home has already been over-designed.
The only solution to this very real problem is to create an On-Budget Pathway. Our process helps you discover which builder is committed to your dream home rather than simply landing their next paycheck. As I’ve mentioned before, this is done without signing any agreements with any builders in order to see which builder is best suited to earn your trust. During this process, we help you understand the builder’s price estimates, agreements, and unique approach to their services, all the while creating your On-Budget Pathway together.
And furthermore, remember how builders don’t actually build your home, but rather all the subcontractors and vendors do — hundreds of people you’ve never interviewed or evaluated? How do you protect yourself against all these people you have no control over? You must have very specific contractual protections in your construction agreement. That’s why we provide you with critical contract clauses for your builder agreement to help ensure your dream home is completed on time, on budget, and with no costly surprises. These contract clauses are the final layer of protection in the process. We’ll provide these to you when you sign up for our Dream Home Workshop so you can have your attorney coordinate them into your construction agreement.
Our goal is to help give you peace of mind that you’ve chosen the right builder and signed the right construction agreement. Instead of worrying about costly surprises, we want you to have an enjoyable experience building your dream home. So, if you want to discuss how this can work for you, let’s jump on a call by clicking on the SCHEDULE CALL button below.
I look forward to speaking to you real soon.