7 Tips in Selecting Your Contractor

Essential Steps for Hiring Your Custom Home Contractor

Building a custom home is one of the most significant investments you will ever make. Choosing the right general contractor is the single most critical decision in this process. Your contractor is not just a builder; they are your partner in realizing your vision.  Once you have your lot selected, your next step is to vet your contractor to assist with your new home build.

1. Begin with Trusted Referrals and Due Diligence

A contractor's reputation is their most valuable asset. Start your search by seeking recommendations from reliable sources:

• Personal Network: Consult with friends, family, and neighbors who have completed large-scale construction or custom home projects.

• Industry Experts: Ask a local building inspector for contractors known to consistently meet or exceed code requirements.

• Supplier Insight: Contact reputable lumberyards and material suppliers. They can offer valuable, candid insight into which contractors purchase quality materials and maintain sound financial practices by paying their accounts on time.

2. Conduct a Focused Initial Phone Screening

After gathering a list of candidates, a brief, structured call will help you quickly narrow the field to the most promising professionals. Ask pointed questions:

• Project Scope: "Does the scale and complexity of a custom home align with your typical projects?"

• Capacity Management: "How many other projects, and specifically how many custom homes, will your firm be managing concurrently with mine?"

• Team Stability: "How long have you maintained relationships with your key subcontractors (plumbing, electrical, HVAC, etc.)? A long-standing team indicates proven coordination."

• Client & Financial References: "Can you immediately provide a list of recent custom home clients and current financial references from suppliers or banks?"

3. Schedule In-Depth, Face-to-Face Interviews

Select three or four top candidates to meet with personally. This step is about assessing their expertise and, critically, gauging your rapport.

• Communication is Key: Choose a contractor with whom you can communicate clearly and comfortably. This relationship will span many months, and mutual respect is essential.

• Focus on Expertise: Discuss specific challenges your project may face (e.g., lot restrictions, unique architectural elements) and listen closely to their proposed solutions.

4. Execute Comprehensive Background Checks

Vetting your potential partner thoroughly protects your investment and ensures peace of mind.  If you are financing your project, most construction lenders will require that your chosen contractor be approved.  To obtain approval, they will need to provide financials and other key details to the lending institution.  

• Financial Standing and Lender Vetting: Inquire about the contractor's history of working with construction loan lenders. Ask for a list of financial institutions where they are currently pre-approved or registered as a vetted builder. If you plan to use an outside lender, confirm that the contractor is willing to promptly complete the lender's required financial and background documentation (the "approval package") to ensure a seamless transition from loan closing to construction commencement.

• Client Outreach: Call former clients to discuss their experience and, if possible, arrange to visit the completed homes.
  

• Current Site Visit: Request to visit one of the contractor's active job sites. Look for evidence of professionalism: Is the site clean, organized, and safe? Are the crew members respectful of the property and neighboring homes?

• Check Official Records: Consult the state consumer protection agency and the local Better Business Bureau for any record of unresolved disputes with clients or subcontractors.

5. Request Detailed, Itemized Bids

Provide the three strongest candidates with the same clear scope of work and your budget expectations. Demand a fully transparent, itemized bid.

• Transparency: The bid must clearly delineate the cost breakdown for materials, labor, permits, fees, and other expenses.

• The Low-Bid Warning: Do not automatically choose the lowest bid. Construction experts strongly caution against this. A bid that is significantly lower than the others often signals a contractor is cutting corners, using inferior materials, or is desperate for work. Base your final selection on proven expertise and trust.

6. Establish a Fair and Secure Payment Schedule

A well-defined payment schedule is a cornerstone of a sound contract.

• Structured Payments: A typical schedule involves a reasonable initial deposit (e.g., 10-20%), with subsequent payments tied to the measurable completion of major milestones (e.g., foundation complete, framing complete, etc.).

• Final Holdback: Ensure the final payment is substantial (often 10%) and is only released after all work is completed to your satisfaction and all final inspections have passed.

7. Meticulously Review the Final Contract

Before signing, ensure the contract is comprehensive and includes crucial protections for you, the homeowner:

• Key Dates: Specify the official start date and a reasonable, agreed-upon projected completion date.

• Scope Detail: Include a detailed description of the work and a precise list of all agreed-upon materials, products, and finishes.

• Proof of Coverage: Require proof of General Liability Insurance and Worker’s Compensation coverage to protect you from claims related to accidents on your property.

• Lien Waivers: Crucially, require the contractor to provide signed Lien Releases from all major subcontractors and material suppliers with every payment. This protects you from having a lien placed on your property if the contractor fails to pay their vendors.

Ready to start your custom home journey? Please text, call, or email us today to discuss your vision and learn how Doug Eggleston can help you build the home of your dreams.