How to Build a House
Step 4 – Choosing a Builder
Now that you know where you are going to build and what house you want it is time to select a builder. In some cases you may have a limited number of choices, especially if the subdivision developer is a builder as well as many will not sell lots only. In many cases it is completely up to you who you chose.
It is critical that you do your due diligence on the builders you are considering to build your new home. Things to look at are customer satisfaction results, pending legal actions, mechanic’s liens, the builder’s financial position and the builder’s reputation. Also, it is critical that you find out how they are to deal with during and after the construction of your home. An important part of the due diligence is to speak to current and past clients of the builder. Reputable builders will not have a problem with this and will actually encourage it. Get their names and numbers and ask them to tell you about their experience with the builder.
The builder’s current and past record of mechanic’s liens is critical to understand. When your home is being built, the builder will utilize a number of subcontractors to perform parts of the work. In most states, if the subcontractor is not paid, they can place a lien on the house for the amount owed. A lien is basically showing that they now have a financial interest in your home. In many states, liens can be placed on the home even after you have closed on the home and taken possession. Liens can be impact the ability to close on the home as well as your ability to sell it down the road. In some cases lien holders can take steps to force the sale of the property to recover their money. If you find a lien on your home, be sure to consult an attorney immediately that specializes in real estate law in your state.