This column will help prevent the agony caused when a builder abandons a job.
Consider the house on my street that sits unfinished. The builder started construction in May 2016, and it should have been occupied by last Christmas, as it’s not a very big or complicated house.
I met the owner, a single mom, back in March as the building site was covered in slush. She told me she was having a tough time getting the builder to show up each day. She was bound and determined to move in by May 31, yet there were thousands of man-hours of work still left to do. Not knowing her at all, I didn’t have the heart to tell her that she’d be lucky to be in by Labor Day, having seen how slow the project was moving.
The progress on this home has now ground to a halt. There’s been no activity for weeks.
My wife, Kathy, and I drove by it recently on our way home from church. As I was pulling into the garage, Kathy said: “That poor woman’s life has been ruined by the builder. I don’t want this to happen to Meghan and Brent.”
Meghan is our oldest daughter and Brent is her husband. They were planning to fly in from California and take Kathy and me on an adventure to Mount Desert Island on the coast of Maine, where they intend to buy a lot to build a home on. They invited Kathy and me to help guide them so they don’t make a mistake and buy a bad piece of land.
There’s another problematic job site I pass each time I go into town. The foundation was installed three years ago, and after that the house sat. Construction has finally resumed in the past six weeks. I don’t know any facts about this situation, but I know how to avoid it. And I know from reading hundreds and thousands of distressing emails that many homeowners suffer from this dilemma.
I shared the following advice with Meghan and Brent. It’s important to realize the issue is complex. In the first place, you need to perform due diligence to find a professional builder who drives a project like a determined marathon runner runs a race.
Generally speaking, the first thing to do is talk with the general manager or owner of the largest lumber yard in the town or neighborhood where you’ll be building. You ask this business person for the names of builders who pay their bills early, only buy the best materials and are the only builders whom the general manager or lumber yard owner would have bid on their own homes.
It must be remembered that the people running the lumber yard know who the true professionals are. They also know the builders who are to be avoided like the plague. It’s best to visit two different lumberyards, if possible, to see if you can get one builder’s name to pop up twice.
It’s equally important to obtain a very detailed cost breakdown of the new home. I created a spreadsheet years ago that’s available at my website. This document has 100-plus rows where you enter a crisp number for each thing that needs to be done to build a home.
For example, the spreadsheet forces you to put in a number for the foundation cost, the cost of the windows, all plumbing fixtures, the rough carpentry labor and all the other costs to build the home.
You must have this information so you can control the flow of money as the project proceeds. You only should pay for items that have been installed to your satisfaction as the home is being built. If you have a construction loan, the lender will usually only issue checks for work that’s been complete, but believe me, their inspectors can be fooled.
Money is the only real motivator you have when building. You never have to worry if you have hired a professional. However, having a chokehold on the flow of money allows you to sleep at night in the event your builder walks off the job or slows the project down. You’ll always have enough money to bring in another builder to complete the project.
A point often overlooked is it’s vital to have excellent plans and written specifications. A great set of house plans might contain 20 or more pages. Written specifications cover all the other things that don’t show up on the plans. These documents allow you to avoid confrontations or change orders that can cause delays and frustration.
It’s equally important to have a simple paragraph in the contract that allows you to void the contract with the builder if no progress is made for a specified amount of time. There are certain weather conditions that might lead to a delay, but that should be discussed before you sign the contract with the builder.
In the final analysis, there’s more you have to do to protect yourself. The most important thing to do, in my opinion, is to spend the time up front asking tough questions of the lumber yard managers and top local real estate agents. You might even talk with a few of the local residential architects who regularly work with builders.
All of these professionals know who the best builders are. Put on your Columbo trench coat and do the detective work required to locate the best builder. Rest assured, I’ll be starting that process along the coast of Maine!
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