Choosing a custom home builder can be daunting. There is currently no licensing or ‘watchdog agency’ to which consumers can turn if building the home of their dreams turns into a nightmare. This is how the consumer can end up with a situation similar to what Sandra Bullock experienced in 2004 (www.people.com). Unlike your attorney or even your barber in Texas, there is no agency to keep a builder in Texas from bad behavior. Just like this recent news story about an Austin custom home builder who left clients with shattered dreams, all too often stories like this emerge. Even more frustrating than the original incident, these builders can just rename their companies and come back again under a new name. There is no law and no licensing, and therefore, nothing to keep this from happening over and over again.
Within the custom home industry, there are a wide variety of people who call themselves custom home builders. From the “Chuck in a truck” – essentially a person with a truck and a business card – to those who have years of experience, all have the right to call themselves custom home builders according to Texas law. Since there is currently no formal governing body over residential construction in Texas, essentially, it’s caveat emptor or ‘buyer beware’.
One way to help avoid such a potentially disastrous situation is to ask the following key questions of any builder you are interviewing:
- How long have you been in business under your current business name? (You can then verify this answer in the Texas Names Filing Database, which is public information.)
- Have you or any company you were partner in, been sued?
- Have you ever had a court judgement against you or your company for negligence?
- Have you ever declared bankruptcy?
- What is your educational background and what training have you had in the industry?
- Do you own any spec homes or hold any lots that you owe money on? If so, how long have they been sitting and what is their status?
If these questions seem invasive, just remember – this is not just a business transaction you are making. It is much, much more. These are the pros who will be building one of your most-valued investments, the place which will house the people who matter most to you. The individuals building your home should be dedicated and passionate about their craft and have spent a lifetime learning and improving it. A likable personality is not an adequate benchmark. Knowing that your builder has financial strength and a sound business means that your builder will be there throughout the project and for many years afterward. Unfortunately, many builders are relatively new at running a business, even if they have experience building a home. As such, they have either closed their doors or restructured their businesses because of heavy debt. Just as in any other industry, a good builder will manage his/her business affairs properly and stay in business for many years. This will ensure the company is invested in being around to take care of your home for the next 10 years (which is the Texas statute for structural warranty).
More Steps to Help You Choose a Custom Home Builder
Here are some additional steps you can take to learn everything there is to know about your builder. These may help distinguish the reputable builder from the one who will finish half your home then disappear in the night, leaving you with a huge mess.
- See if the company ranks in the area in terms of a top 10 list, like a local Business Journal. In Austin, it’s called the Austin Business Journal.
- Check out the Better Business Bureau rankings.
- After you narrow it down, call the local municipality and ask for the building inspection department. Ask their opinion about the one or two builders that you are considering. If it is a small municipality, they will know most of the builders in the area and will have inspected their projects.
- Call a few local vendors (a lumber supplier, for instance) and ask if the builder’s accounts are in good standing. This information will give you one more piece of the puzzle. Some builder’s credit is so bad that they can’t get the materials they need to build homes without getting enough cash together or using credit cards.
- Do a Public Records Search. Contact an attorney who has access to judgments against anyone you are considering. Ask them to do a public records search. You want to know if the company changed names recently and other important data that might tell the whole story.
In the end, doing your homework can save you huge headaches. When people tell us about their nightmare experiences with past builders, they often say, “I just can’t believe it! He was such a nice guy and seemed so knowledgeable.”. Unfortunately, there will always be bad apples in any industry. Following these time-tested techniques should help you choose a custom home builder who builds you a great home and takes care of your home for many years to come. If you would like to learn more about this topic, please contact us about attending one of our upcoming educational seminars on how to choose a custom home builder.
To read How to Choose a Custom Home Builder – Down to Brass Tacks! in its original form, see it at Jenkins Design + Build.