How To Choose A Contractor

Choosing The Right Contractor For You

Choosing a contractor is a pretty broad topic.  My background is mostly in custom homes so I will be focusing on that in this post.  Choosing a contractor for production/model/spec housing is a bit different and I’ll try to cover that in a future post.

How To Choose

Unfortunately there is no set formula for choosing the best contractor.  Most custom contractors have their own nuances and ways of doing things.  And each individual homeowner will have their own expectations as to how a project will progress.  The goal of experiencing a pleasant building process is best met by pairing a homeowner with the contractor who can best meet their expectations.  Ultimately, you can have a great contractor who is very reputable and does great work but, if your expectations aren’t met during the process, you’ll most likely find the entire experience disappointing and since building your new HOME is a personal experience, for most, that disappointment is typically amplified.

Expectations

So, how do you match your expectations to a builder?  I’m a firm believer in references.  Make sure you ask potential builders for recent references.  Recent is the key.  If you ask a builder for a reference he is most likely going to give you references which he believes will be positive.  If that builder hasn’t had a happy customer in 2 years (that he can use as a reference) that’s probably a red flag!  Once you start talking to references don’t hesitate to dive in a bit.  It’s important to know what their overall experience was like but it is also important to know how they felt about the smaller detail items.  Were they happy with communication with the builder?  When things did go wrong did the builder work with them to remedy or just dismiss it as their problem?  Did the builder clearly identify different options at various stages of construction or did he constantly push them in a certain direction?  Think about what you are expecting from your builder and then use those references to determine if that builder may meet your expectations.

When it comes to managing expectations it is also important to remember that building a custom house can be a complex process and there are a lot of components that have to come together.  For custom builders these components are quite often different so they are always dealing with new situations from one home to the next.  As a result things can go wrong or it may not progress the way you expected it too.  Reputable builders will always do their best to remedy these situations in a fair manner but if you enter the building process knowing that things may not go 100% smoothly (and you’re confidant you have a reputable builder who will work to make sure you are happy with the end product) you will probably find the entire process less stressful and much more enjoyable and exciting (which is how you should feel when building your new home).

Quality

I would break quality into two categories.  Quality of components you can see (finishes) and quality of components you can’t see (structural/core components).

It’s tough to measure the quality of the components you can’t see.  If a builder is cutting corners with cheap products/materials/workmanship, but these items are being covered up, the negative effects may not be apparent for years.  To measure quality of items you can’t see references are probably the best bet.  If the contractor is reputable and has a commitment to customer satisfaction chances are they aren’t cutting corners on the things you can’t see.

Measuring quality in the things you can see (finishes) ties in quite closely with expectations.  Be sure to get a complete list of what exactly your contractor will be installing.  For example, if your contractor installs a standard hollow core door slab but you were expecting solid core door slabs you may be disappointed and feel you got a lower quality door slab.  The reality is that there isn’t necessarily anything wrong with the hollow core door slab, it’s just a different product with a lower price point.  Make sure you have a detailed list of specifications from your contractor ahead of time to avoid misunderstandings and disappointment when it comes to the finishes to be installed in your home.

Finally, if at all possible, try to see examples of a potential contractor’s work.  Many mid to higher volume builders have show homes that you can walk through.  If you’re looking at a low volume builder who doesn’t have a show home (and doesn’t happen to have any projects nearing the end of construction at that time) you may have to rely more on the provided references.  If a home is available to view take a walk through the home and take a close look at the things that would be important to you in your new home.  If the quality produced in their show home meets your expectation then you have a benchmark for what to expect in your new home.

Contract/Specifications

Any time you enter into a new construction or renovation project the standard “make sure you get everything in writing” applies.  When you hire a contractor to complete work for you there MUST be a written contract (or “Construction Agreement”) that details who is responsible for what and what exactly the contractor will provide and complete, for a stipulated cost.  This agreement may be broken into two parts, the construction agreement (detailing who is responsible for what) and the specifications (detailing what exactly is included).

Most contractors who are members of warranty programs (example, the Alberta New Home Warranty Program) will use a standard construction agreement provided by the warranty program which is designed by the program to be as fair as possible for both parties.  If a contractor uses their own contract/agreement it may be a good idea to have your lawyer review the contract to ensure you aren’t at any unnecessary risk.

The specifications detail what exactly is included in the contract.  There are typically notes and specifications noted on the set of blueprints (which become part of the specifications of the contract) but in residential construction these notes are typically generic and are not detailed enough.  If the notes on the plans are too generic or vague you may need a separate list of specifications which should fully detail everything included (from the type of concrete to be used in the footings to the type of wood, profile and finish of the baseboards).  The more detailed this list is the less chance there is for misunderstandings and “up charges” for items you assumed would be included but the contractor did not have in his price.

Associations and Warranty Programs

Hiring a builder who is a member of a home builders association or warranty program doesn’t guarantee they are a great builder and it’s certainly not a requirement (although, depending on your financial arrangements a builder with a warranty program may be required) but it is a step in the right direction.  Builders who are members of associations and warranty programs typically pay to be members and as such show they are willing to make some sort of investment to show they are dedicated to customer service and staying current with technology and trends in their industry.  In some warranty programs the builders are audited and held to a set of standards which they must meet in order to continue their membership.  Like I said, it’s certainly not a guarantee that you’ll get a good builder just because of their association or warranty program relationship (and there are certainly some great builders out there who don’t carry those affiliations) but if you’re considering a builder and they are a member of a program it may be a good idea to research the program a bit more and see what it expects from its builder members.

One further note on warranties.  Every (reputable) builder, regardless of whether they are a member of a 3rd party warranty program or not) should offer some sort of warranty on your home.  Make sure their warranty policy is written out and included as part of the contract.  Chances are your new home purchase/build will be the biggest single investment you’ll make and you should make sure you have some measure of security for that investment!

Price

Price is a critical determining factor.  It’s your hard-earned money after all and you certainly don’t want to spend any more of it than you need too!  Unfortunately, price is far too often used as the only determining factor.  Most (once again, reputable) contractors operate on similar margins.  So, if you take two good contractors and one costs more than the other chances are there is a reason for the price difference.  In most cases they aren’t simply making a bigger profit, they are most likely including something in their price that their competitor is not.  In a case like that you’ll want to use some of the factors noted above to determine what the difference is and whether the price difference is justified.

Unfortunately, there is no exact science when it comes to making sense of contractor pricing (there are many, many factors that play into it).  In my opinion, you should find a contractor you feel you can trust (using the above noted thoughts and any others that you think relevent) who can provide a product that falls within your budget range… Consider allowing yourself a 10% contingency fund (because even the best contractors out there can’t anticipate everything when it comes to custom housing) and go from there.

 

Building or purchasing a new home should be a dream come true and an enjoyable experience.  Partnering with the right builder will go a long way to achieving that goal and should help you avoid some of the horror stories that are unfortunately far too common!