New Home 101: Shopping for Your New Home, Part 3

The left-hand side of this picture talks about getting a new home. To the right is the representation of a calendar.

One of the most important steps in shopping for a new home is selecting the right builder. We can show you how!

How to Choose the Right Builder

There’s a builder for every budget — from affordable homes to luxury mansions. You have likely narrowed down your choice of builder based on your budget and your priorities in terms of a neighborhood or a particular home style. Before you settle on one particular builder, you should do a little more research to get a sense of the builder’s reputation and quality, if you haven’t already.

Erin Hungerford, a Realtor with Long & Foster Real Estate in Richmond, Virginia, says Realtors can help you recognize the level of quality in different homes and can share their expertise and knowledge about particular builders. Realtors who sell new homes discuss various builders among themselves and talk about their clients’ experiences with different builders, so they can be a great source of information.

You can also ask the builder for references. Even though those references are likely to be satisfied customers, you can get a sense of what those homeowners particularly appreciate about their builder to see if that matches what you want in a builder. And, when you visit a particular community, ask if the builder provides a written warranty. If residents haven’t moved into a community where you want to live, you can always go to completed communities by the same builder to ask homeowners there about their experience.

Karen McCaffrey with McCaffrey Homes says that to determine whether a builder is offering a quality product, “you should look at the list of included features to see what materials are being used for counters, vanities, and flooring. Check to see if the roof has a thirty-year warranty and look at the exterior materials being used.”

Dale Adams of JLS Design and Construction recommended not only looking at the model home, but also asking to visit similar houses that are still under construction to see what they look like without optional features.

By this time you’ve likely identified a couple of builders that you think could suit your needs. Let’s take a look at how to pare down that list to the ideal builder for your needs.

As you learned earlier, home builders are typically identified as either custom builders or production builders, but most builders fall somewhere in between pure custom builders who work with an in-house architect or your architect to create a unique home and production builders who offer varied options. Along the spectrum, you’ll find builders who offer complete customization of their own floor plans, including moving walls and redesigning spaces, and other builders who offer an “A,” “B,” or “C” choice of finishes but won’t let you make structural changes to their plans.

You may have already decided that you want to build a custom home on your own land, but if you’re not sure if you want a production home or a custom home, there are several issues to consider.

Your timeline. If you need to move into your new home by a particular date, then a production home may be the better choice. In addition, for buyers who especially wish to move more quickly, look for so-called spec homes or quick move-in homes. Spec homes are typically built on speculation (hence the name) rather than to the design of a specific homebuyer. Many builders equip spec homes with their most popular options, so while you may not be able to select your favorite color or type of countertop, for example, you can move in much more quickly and know that your home reflects popular design choices that should pay off some day if you sell the home.

Some builders may also offer quick move-in homes that may be partially constructed when you purchase them, but still allow you some range of choices in colors and options, depending upon the degree of construction at the time of purchase. And some homes that were initially ordered by a specific buyer may end up back on the market. In this case, your choices may be whether or not you like design choices the would-be buyer selected.
Many buyers are attracted to new homes because they love the thrill of designing and building “my home, my way.” When you do so, most builders have a good idea of how long it will take to finish each home, since they typically have a well-honed system for the permit process and inspections and a pipeline for supplies. In addition, most production builders have crews of construction workers (many times regular subcontractors) that they can rely on to complete projects. Custom builders, simply because they typically build fewer homes each year, generally have a smaller staff of employees but may also have a strong team of core sub-contractors. Of course, by their nature, custom homes vary widely, so the time it takes to build one depends heavily on the size of the residence, the intricacy of the design, the availability of materials, and whether the land is ready for building or requires extensive prep work.

“Building a custom home can take as long as six months to design and to obtain permits, followed by another year to build,” says Jim Rill, owner of Rill Architects.

A production home, depending on the size and complexity of the design and the weather, takes roughly five to seven months to build, says Karen McCaffrey, vice president of McCaffrey Homes in Fresno, California. She says that sometimes it’s possible to build a small home in four months during the summer when there’s less likelihood of extended weather problems.

Your budget. Custom homes can vary according to the limits of your imagination, zoning laws, and budget, but they’re not necessarily more expensive than production homes. After all, you can build a small, one-level rambler on a budget and it qualifies as a custom home if it’s built according to your own plan. However, most custom homes will be costlier to build than a similar production home simply because production builders have the advantage of economies of scale when it comes to the cost of labor and materials.

Your desire for personalization. The decision about whether to build a custom home or work with a production builder depends heavily on how much you want to put your own stamp on your home. Custom homes are usually chosen by buyers who have a strong sense of what they’re seeking in a home, according to McCaffrey. On the other hand, many production builders offer semi-custom homes that allow you to make a variety of changes to the floor plan and features to build the home of your dreams.

Don’t Forget about Resale Potential
When you’re shopping for a home, a builder, and a community, you’re probably focused pretty tightly on what will meet your needs now and in the future. However, many people own a home for five to seven years and then sell it and move to another. While your decisions about where and what to buy shouldn’t be dictated solely by resale potential, you should keep in mind that you’re making a major investment.

Some simple online research or a Realtor can help you understand historical real estate values in a particular area and the key factors that can influence home values, including the school district, transportation, nearby retail and infrastructure and future development. In addition to looking at neighborhood values, keep in mind the context of the rest of the community. Real estate experts often say it is best not to own the most expensive house in the neighborhood because it can be harder to sell than one that better fits in with other homes in the area.

“A Realtor can give you professional advice so that you don’t overbuy on options in comparison with the rest of the neighborhood,” Century 21 Beal, Inc.’s Raylene Lewis says.


This article is the third part of a three-part series discussing how to shop for your new home. For part one, click here. For part two, click here

For more expert advice on buying and building a home, check out the free eBook download of New Home 101: Your Guide to Buying and Building a New Home at

Michele Lerner is an award-winning freelance writer, editor and author who has been writing about real estate, personal finance and business topics for more than two decades. You can find her on Google+.

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