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How to avoid costly problems when building a new home

You finally did it. You signed the contract to build a new home. This time around, you get to choose everything. You decide the floor plan, the upgrades, the fixtures and even the location of electrical outlets. It's exciting.

Have fun making all of those design choices, but don't let that excitement blind you to the fact that things could go wrong - and you don't want to be left "holding the bag" for costly repairs. How do you protect your interests during the home building process?

5 tips that can help buyers keep their builders honest

Despite making an endless amount of design choices, it is easy for the buyer to feel like they don't have control throughout the process. After all, it is your first time navigating the complex relationship between builders, contractors and subcontractors - and it isn't easy.

Here are a few tips for buyers from a builder of 35 years:

  1. Review the contract with a construction attorney before signing. Keep in mind that even the most reputable builder wrote the contract with their interests in mind. They know that challenges often present, and they include open-ended language that makes it easier for them to resolve issues or differences in their favor. Make sure you talk to an attorney who understands all the finer points of construction law and litigation.
  2. Specify your building specs. The more detail in your plan, the better. Scrutinize the plan and make sure that you specify important details such as the types/quality of materials you expect. This can help you avoid situations in which your builder or a subcontractor substitutes low quality materials to save money. It also helps you reduce the number of change orders, which can be expensive and cause delays.
  3. Go to the site with your builder before construction begins. Talk to your builder about the property, the plans and the potential obstacles you could face. Ask questions. The more you know about the plans beforehand, the easier it will be for you to spot problems later.
  4. Make sure your builder makes progress inspections. Many subcontractors will be involved in your project. They can and probably will make mistakes, often trying to hide them instead of speaking up. While you make sure to hold your builder responsible, make sure they are doing the same with their subcontractors.
  5. Hire your own inspector. Did you know that you don't have to rely on your builder's word? You can trust but verify along the way. Buyers have the right to hire their own inspector to check progress. Builders also may dismiss buyer concerns about potential defects. Again, don't take their word for it. Don't be afraid to call the attorney who reviewed your contract either. 

A bit of education and vigilance can go a long way in making sure your building experience is one to remember - for the better.

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