3 Important Things To Consider When Building A Custom Home

19 January 2015
 Categories: Real Estate, Blog


A custom home is one that you are building from the ground up, and even though you are having a home built, you still have to deal with the same issues that buyers of older homes do. You should not only pay close attention to the reputation of the home builder you hire, but also the check his or her references, inspect other homes he or she has built, and evaluate the warranty and contract carefully. 

The Warranty

Many home builders offer insured ten year warranties to protect home buyers from faulty materials, shoddy workmanship, structural defects, and other things that could go wrong within that time frame. This also includes problems with improperly installed electrical or heating systems, roofing, plumbing, and other important aspects of your new home. 

Read over the warranty carefully to make sure you fully understand what it does and does not cover. The warranty should also state what steps you must take to activate it, and whether your home remains under warranty if you choose to sell it. You should beware of any warranties that seem to protect the builder more than the home buyer. 

The Contract

There is generally a standard contract used by most home builders, but keep in mind that negotiations can be made. A good contract between you and the builder should include the following:

  • The amount you are to pay the builder plus any other charges
  • The deposit amount and whether it is refundable, and if so, under what conditions
  • At what times you can inspect the house during the building process, and how the builder should respond when problems arise
  • The right to visit the house periodically and just before closing
  • The completion date for the home
  • Financial penalty clause that costs the builder money for every day after the completion date that the home is not finished
  • Any provisions included in your builder's warranty

The Closing

Before closing the deal, do sit down with a lawyer and go over all documents you must sign and exchange at the closing. You'll most likely to need write checks for many things:

  • Your lender's title insurance
  • House related taxes
  • Builder fees
  • Other expenses for the purchase and sale agreement obligates you to pay

Whether building a home or buying a home, a real estate agent comes in handy to help you find the right property for you. Once you've found it, the next step is getting together with the builders, which the real estate agent may also be able to recommend for you.