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HOUSE-N-HOME-BUILDING.COM NEWSLETTER #212

New House Building: Money Saving, Convenience and Healthy House Tips

James Todd
January, 2003
Happy New Year


Selecting a Builder

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Beginning with the April 2002 edition, newsletters are now archived
online at: http://www.house-n-home-building.com/newsletters/newsletters.html
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CONTENTS:

1.  The 10 most common mistakes in the building of a new home, Mistake #4
     Finding the Wrong Contractor -  Guest article by Chris McMinn, Professional
     Cost Analyst and Consultant
2.  The Importance of Selecting the “Right” Builder.
3.  A builder’s interview checklist.
4.  Useful Links
5.  Thought for the Day
6.  Subscription Information


Please forward this newsletter to anyone whom you think may be interested!


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1.  The 10 Most Common Mistakes in Building Your New Home

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This is the third in a series from Mr. Chris McMinn. His firm, McMinn & Associates are professional cost analysts and consultants. They review and analyze a large range of residential and commercial construction projects, applying the same methods and techniques of cost engineering to residential construction projects as they do for their commercial customers.

If you are looking for a professional cost consultant, we encourage you to contact Chris. If you are looking for written Guide to many of the same issues Chris points out, we encourage you to take a look at the House-N-Home Building Guide.

Copyright © 2002 C. S. McMinn

Finding the wrong contractor!

All construction projects come with problems. Some are mere snags– minor glitches we all expect. Others present some real headaches. One of the worst– by far– is to get stuck with the wrong contractor. This can become a nightmare– on a par with the black holes found in space.  Astronomers tell us these dying stars are immensely heavy. Their gravitational fields are so powerful, they suck in everything– even light. One bad contractor can have a similar impact on your project. Excitement soon turns to depression; hope is overwhelmed by despair...

Finding and hiring the right contractor is absolutely essential to the successful completion of your new home or remodel. More than any other factor, if you skip your homework here, you will pay out thousands of wasted dollars and reap years of frustration as a result. Even with cheesy plans, missing details and nothing but enthusiasm to embellish your ignorance, a great contractor will deliver success–  even as a flake will bring misery into your life. I am not trying to be melodramatic. We specialize in finding contractors– any town, country or project. We've had over thirty years experience doing just this. So please, please read carefully what follows, and then apply these essential steps to your project!

First: never compromise honesty and integrity for a cheap price. During the process of trying to find a contractor to complete your project, you will hear many promises. Listen to them all, but apply Reagan's excellent advice: "Trust, but verify!"   No matter how cheap the bid, insist on three references. You need three independent, completed projects you can inspect. Plus, you need to sit down and talk to each owner.

If any contractor's references turn out to be: a "friend" on vacation, someone who's just moved to Alaska, sold their house, is in jail/hospital/went deaf/has been kidnapped by terrorists... smile sweetly and say "I'll be happy to work with you as soon as you give me referrals I can speak with today..."

As you look for the right man, or woman, for your project, integrity and quality– the desire for excellence–  must be core values. Even though you may be an excellent judge of character, independent references deliver the gold standard of true accountability. In addition, these core values must be coupled with experience. There are simply too many opportunities, even in a small remodel, for people to take advantage, misinterpret, misunderstand or twist things in their favor.

Unless you have extensive construction experience, you must learn the process of finding contractors who meet these requirements. I'd like to tell you this is a piece of cake. It's not. In practice, finding good contractors is hard, tedious and often embarrassing work. Your ignorance will be exposed, you have to ask awkward questions and then– you have to do it over and over again!  No wonder most homeowners skip this part! It's common to start with a list of twenty or more contractors in order to find just  three who are qualified, available and competitively priced. Many don't return calls, or dismiss your requests, or show up an hour late smelling of beer...  All in all, it can be demoralizing– even depressing. In the following sections of this article, we'll continue to review and explain this complex process of finding Mr. (or Ms.) Right.

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Don’t let your credit history become a headache in your new home building process. Check your credit. Get your free credit report today  

Save thousands in interest payments and cut years off your mortgage. No need to refinance. Enroll in a Biweekly Home Mortgage program.

Homebuilding Project Management Software for Builders, Project Managers and Owner-builders.  Provides all the tools you need to be organized, efficient and in control - in one, EZ to use, expandable and customizable software package. If you are exploring the possibility of building your own home without hiring a builder (owner–builder), this software is a must.  Click here to learn more.

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2.  The Importance of Hiring the Right Builder

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Before we delve into the topic of choosing a builder – let’s examine for a moment what a builder is and what a builder does.  A builder is someone you hire to build your house, correct?  Well, yes and no.  It has been said that when you hire a builder you are really hiring four people:  the builder, the builder’s crews, the builder’s subcontractors, and the builder’s suppliers.  What this means is that most builders do not build houses by themselves, but hire outside subcontractors to do part of the work--plumbers and electricians are good examples. 

Except for a few very large builders who have the requisite staff and tradesmen on their payroll to build a house from start to finish, most builders are not only builders, but also general contractors, or GC’s as they are known in the trade.  That is, they hire and schedule other specialized subcontractors to work for them in the building of your house. 

There is nothing wrong with this practice, we are simply calling it to your attention so you have a clear understanding of it. Many of the strategies discussed in the House-N-Home-Building Guide for saving money on your home building project build upon the understanding of this practice.   With a firm grasp of this trade practice, let’s move on to considerations for choosing a builder. 

The difference between a well built house and a poorly built house is not necessarily the materials being used, though these are important, or the tradesmen working on the house.  It is mainly the person in charge of making it all happen – the builder!  The builder’s job is to schedule the tradesmen and materials, while keeping a close eye on the subcontractors, and keeping everyone on time.  No, it certainly is not rocket science; but, it does require experience and expertise in the building process to do it well. 

The builder you hire to build your house is the expert – you are not!  You can and should learn as much as you can about the process of building a house but, ultimately, the builder you hire is YOUR expert on the subject, so you should hire someone with whom you are comfortable, someone whom you can trust and someone with experience.  If you do a good job of hiring a builder, things should go reasonably smoothly.  If you don’t, then you are going to put yourself in the unenviable position of supervising your builder.  And, if you haven’t been through the building process before, there won’t be enough hours in the day for you to learn all you need to know to have a chance of doing this well.

I cannot emphasize enough the importance of this choice and getting it right.  It very well could be the difference between a pleasant dream and a bad nightmare.  So, take the time and do it right. 


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3.  The Importance of Hiring the Right Builder

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One of several steps in the process is to interview the builder. Here is a list of questions that should be asked:
1)     How long have you been in business?
2)    Have you or your partners built houses under any other names?
3)    How many homes do you build per year?
4)    How many homes do you build concurrently?
5)    How much time do you spend supervising the building process?
6)    Do you do the supervising yourself or do you have a foreman or site supervisor?
7)    What work will you do with your own crews – what work is subbed?
8)    Do you have contracts with your subcontractors? Can I see a copy?
9)   Can you provide us with a list of all of your subcontractors, including name,        address and phone number?
10)   How long has each sub worked for you?
11)   Can you provide us with a bank reference?
12)   Can you provide us with a copy of your insurance certificate?
13)   Have you had any suits brought against you by any homeowners for whom you         built?
14)   If yes, why, and what was the outcome of the suit?
15)  How many change orders would you consider “average” in the process of         building a home?
16)   Are there charges or fees for initiating change orders (other than the obvious        costs for the change – some builders charge a flat fee of say $50, plus the        construction charges)?
17)   Can change orders be initiated by the builder?
18)   If a mistake is made during the building process, who pays to fix the mistake?
19)   What kind of warranty do you provide? (some States may mandate warranties)
20)   Do you do the warranty work on your houses or is it some third party?

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4. Useful Links

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The following are useful links relating to the housing industry that may be of interest.

The Permit Place – This website is all about permits.  It has permits from 1309 county and 2913 cities online.  It contains links to more than 4000 local planning and building departments. http://www.permitplace.com/

House Values.com - If you're planning to sell your home in the near future, this FREE service is designed to help establish your home's current market value or suggested listing price. http://www.housevalues.com/HomePage.aspx


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5. Thought For The Day

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Little minds are tamed and subdued by misfortunes; but, great minds rise above them.

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6. Subscription Information

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