Choosing a builder for a household that will look different in ten years is a very different exercise from choosing a builder for a couple of people who are downsizing. As the requirements of the family in the household change during the course of the project, the builder needs to be able to deal with the changes in a flexible manner. The family’s tolerance for delay will be lower than for a couple of people who are downsizing, and the decisions that are made during the framing of the house will affect whether or not the house is going to work for the family in ten years’ time. So the practical work of choosing a builder for a household that will look different in ten years is to vet the builder, to set up the contract in the proper manner and to establish a process to check on the quality of the work that is being done while the walls are still open.
Define the ten-year program before requesting proposals
Having a Family create a Program Document, even if it’s only a page or two, forces the family to decide on several critical issues. Stating how many bedrooms a family of 5 with 3 children (under the age of 10) will need at peak occupancy is a good place to start. Next, the family will have to decide if there will be a parent left in the household in the future. Quantifying the amount of storage needed for the family’s vehicles and bicycles is another important decision to make. Lastly, determining where homework will be completed as well as where remote work will take place is important to the Program Document.
Questions that surface future conflict
- Which rooms will change function twice, and can they take plumbing or a closet later without structural work?
- Where will noise collide, for example a playroom below a primary bedroom or a laundry beside a nursery?
- How many people will use the busiest bathroom on a weekday morning?
- Is aging-in-place capability required on the main floor, including a shower with no curb and a 36 inch door clear width?
Handing a Wish List to 3 Builders is Not Going to Work!
Evaluate capability rather than portfolio photographs
A finished house is a single day of a builder’s best work. However, a builder’s true capability can be evaluated by three things, volume, staff and financial position. So, for example, how many houses does the builder close in a year? How many superintendents does the builder have? And how many houses does each of the superintendents manage as custom homes?
Reference checks that produce usable information
Don’t ask for a list of references. Ask the builder for contact information for the last 2-3 clients that the builder closed with. Ask the family member of that client how responsive the builder was to any warranty issues that arose. Ask the family member how the builder handled any subpar work from subs. Ask the family member if the final cost of the project was equal to the contract price. Ask the same questions of the builder’s trade partners. Ask the supplier if the builder pays within terms. If you are shopping in northeast Ohio, it is worth starting with established Cleveland home builders and then cross-checking their names against local permit records and lien filings.
Match the contract structure to the family’s risk tolerance
The type of contract is important, because how a builder deals with selection, allowances and changes during the build process can cost a lot of money. Therefore a family that is still making decisions after the slab has been poured will need a contract structure that allows for these decisions to be made without incurring excessive costs.
| Structure | Price certainty | Cost visibility | Best fit |
| Fixed price | High at signing, erodes with change orders | Low, markup is embedded | Complete plans and finalized selections |
| Cost plus fee | Low until closeout | High, invoices are open | Complex sites or evolving scope |
| Cost plus with guaranteed maximum | Capped, savings often shared | High within the cap | Families deciding finishes during construction |
The contract type affects how the choices (selections), the trade allowances and the changes during the build process are handled. Families that are still making decisions after the slab was poured need a structure for their decisions that does not cost a fortune in markups. Therefore, a written allowance schedule with the unit quantities for the choices for finishes (e.g. Flooring, cabinets, countertops) is a necessity to avoid later costly disputes over the cost of finishes.
Specify the decisions that are expensive to reverse
Upgrading finishes later will get you nowhere. However, a growing household will feel the consequences of the decisions made with respect to the structural, envelope and mechanical parts of the house.
- Frame for the future opening. Blocking, a header, and a chase cost little at rough-in and turn a later basement bathroom or second-floor laundry into a weekend job rather than a demolition.
- Zone the HVAC by floor. A single-zone system in a two-story home produces bedrooms nobody can sleep in.
- Insulate interior partitions around bathrooms, laundry, and any room adjoining a shared wall.
- Oversize the electrical panel and run conduit to the garage and attic while they are accessible.
- Locate storage where it will be used, which usually means near the entry the family actually uses rather than the front door.
Verify quality at the milestones where defects are still visible
Independent Third Party Inspection of Construction of Home will cost a small percentage of construction cost of home, but Builder will complete work in a different manner. Schedule reviews for the following stages of construction, (1) foundation and waterproofing, (2) framing before installation of insulation, (3) rough-in for mechanical and electrical, (4) air sealing and installation of insulation, (5) pre-drywall. For each of the above stages of construction a written punch list of work items to complete prior to arrival of next Trade should be completed and confirmed with Builder that all items on list were completed.
Contract terms worth negotiating
Make sure the builder is required to fix any problems found by an inspector that were caused by the builder’s work not being in accordance with the plans and codes. Set up a change order process that requires the builder to provide a price for any changes within a set amount of time. Detail in the contract how the builder will conduct the 11 month warranty walk and how payment for the final amount due will be withheld until all items on the list have been addressed.
A builder who cheerfully allows third party inspection of his work, and prices change orders quickly, has more important qualities to a household that will look different in ten years than any credentials he may have.
