Finding the Right Contractor

Selecting the right contractor is crucial to your goal of a quality home at a realistic price, and without undergoing unreasonable stress. Obviously, it's important to check out as many as you can before you decide.

Sources:

You can use any number of sources to find contractors -- the phone book, trade associations, licensing boards, others. They're fine, but unfortunately, they usually offer just names and addresses without telling you anything else. It's worth trying to find better sources, particularly word-of-mouth referrals.

One excellent source is people who have recently used a contractor. If you don't know anyone, talk to your friends, relatives, people you work with, etc. They may know, or have hired, someone. If possible, ask to see if you can inspect their work. Not all contractors are craftsmen.

Another source is local lumber yards and other material suppliers. Generally, they're reluctant to recommend anyone who isn't reasonably good.

One very good source, especially if you have no local contacts, is local banks. A majority of construction loans are made by local banks because they require a lot of administration and local knowledge. These banks won't lend construction money if they don't like the contractor. Visit two or three local banks and ask a loan officer for a list of their approved contractors.

Note that the officer may want to pre qualify you, and that's fine, but you don't want to apply just yet because you'll want to shop around. All you want for now is the contractor list. If a specific contractor isn't on it, the bank probably won't give you a loan.

Finally, are there any other new homes going up in the area? If so, just drive past the site every few days. If the site is neat and seems to be well managed, add the contractor to your preliminary list for further investigation.

Narrow Your List:

Contractors tend to specialize on homes in a specific price range, so start here. You want a builder who has the experience and the equipment to build homes similar to yours. It could cost more than necessary if the builder is used to much more elaborate homes, or the quality may suffer if the builder is used to smaller projects.

Concentrate on builders with a good track record. If you speak with any local loan officers, try to get some indication as to who they prefer. They generally won't offer much help, but they may give you some hints as to who they like best (or least). Ask if there any contractors they personally prefer? Or not prefer? Are there noticeable differences in on-time and on-budget performance?

If you find anyone who has used a specific contractor, ask them:

• Were they pleased with the results?
  
• Did they have any communication problem with the contractor?
  
• Did the contractor stay in touch on a regular basis?
  
• Was the job completed on schedule and on budget?
  
• Would you use the contractor again?

A caution here: bear in mind that terms like "communication", and "quality" often mean different things to different people. For example, people visualize quality very differently. To some, quality is synonymous with the grade of a product -- a Yugo vs a BMW, McDonalds vs an expensive restaurant, etc. Other people equate quality with good vs. shoddy workmanship.

Try to get examples of what someone means when they use subjective terms. Even better, ask if they'll show you the home that they built.

Interviewing Contractors:

Now is the time to find out whether you can build a good working relationships.

No matter how desirable a contractor seems, it's extremely important to meet the on-the-job supervisor(s) before signing the contract. Think twice if you aren't able to establish good relations.

This is your money, and you're entitled to ask hard, blunt questions. If a contractor isn't forthcoming, or if anyone talks down to you, cross him off your list.

At the same time, however, understand that the contractor is also evaluating you. No good contractor will take your job if he feels you will attempt to micromanage your project. That's why it's important to establish good communications before anything else is done.

• Do they build homes in other price ranges? Or do they also build condos, multi-home projects, etc. If they do, their workmen may be oriented toward speed, rather than quality.
• How many homes like yours have they built in the last year? How many in the last 5 years?
• How many years have they been in business under their present name? Were they in business previously, or have they changed names? Why?
• What lenders do they work with? (Get a complete list - then go see each lender.)
• Who will be the on-the-job supervisor(s)? Can you set up on-the-job meetings on, say, a weekly schedule. How can you contact the contractor, supervisors, etc., between meetings, or if there are problems? Ask for specific name, phone numbers, and hours when they can be reached.
• Finally, ask for copies of the contractor's license (where required), workman's compensation, and liability insurance certificates. It's advisable to confirm that all certificates are valid and current.