20 Questions to Ask if You’re Building a Home
Building a brand new home can be extremely exciting. It puts you in the designer’s chair and allows you to customize a home to meet your exact needs and tastes. However, many buyers don’t realize just how complicated and time-consuming the process can be. To help you get started off on the right foot, I’ve compiled 20 questions that I recommend asking before you start to build a home.
1. How many years have you been in business, and how many homes have you built? Are you licensed (where required) and insured?
Obviously you want someone with experience and a good track record. Look for a company that specializes in or has previously built the type of home you’re looking for.
2. What sort of new home warranty do you offer?
Many people assume that brand new means no problems and nothing will need fixing. The reality is that even on new construction, things can go wrong. Ask about the warranty provided by the builder in the event of a mishap early on. There should be a short term whole-house warranty and a longer structural warranty (10 years is standard). Ask what exactly these warranties include and how long they last.
3. Do you only build from existing floorplans, or can I provide my own set of plans?
Most builders will have an approved set of plans they work off of. This makes estimating costs easier and limits the amount of involvement from the architect. If you are looking for a more customized design, make sure the builder is comfortable with that idea and to what degree.
4. What features are standard in the homes you build? What are the upgrade options?
When a new construction home is listed for sale, the price for that listing usually covers a set of standard fixtures and features. Anything beyond the standard offering will be considered an upgrade and will be added to the total price. This is why you see ads for new builds with copy that says: “starting in the 300s!”. The unit in question starts in the $300,000s but with upgrades and add-ons, it could be tens of thousands of dollars more. Be sure to ask which features are standard and which are considered upgrades. DON’T rely on pictures from the brochure or model home as these are often shown upgraded to draw buyers in.
A specifications sheet from a listing I worked on recently. Notice the areas where it says “optional” or “upgrade”.
5. When and how can I make changes or upgrades throughout the building process? Do all decisions need to be finalized before construction begins?
Often builders will use a “buyer selection period” where you’ll have an opportunity to discuss and plan all the features you want in your new home. Once these selections are locked-in they often cannot be changed or can only be done at substantial cost. Make sure your understand what this selection period looks like and when your final choices are due.
6. What are the energy-saving features of the homes you build?
One great advantage of new construction is the energy efficiency of modern design and building materials. More efficiency means lower costs over the long-term but usually higher costs upfront. Try asking your builder where their home falls on the Home Energy Rating System (HERS) index to gain more insight into how their homes typically measure up.
7. Who will be overseeing the construction of my home? Who can I reach out to with questions as they arise, and how can I contact them?
Likely the person selling you on the idea of your new home is not the person overseeing the actual construction. Make sure you ask about who your point of contact will be as things progress.
8. What is your process for inspections throughout construction, final walk-through, and to address any matters that need to be corrected or finalized?
Inspections should be done in multiple phases and you really should hire an independent inspector that your agent recommends. At a minimum, the first inspection should be done before the walls are closed in order to inspect the framing and systems installation. The second should be after the home is complete, so the inspector can check the finished product.
9. How long will it take to build my home?
Don’t forget to include time for permitting. Depending on the city and the time of year, this can take an additional 30-60 days.
10. How and when will the final cost of my home be determined?
You want a detailed accounting of exactly what is going into your final purchase price – and so will your lender! Just don’t take the easy way out and assume your bank will make sure everything is being accounted for correctly.
11. Can I view a current project you’re working on?
Ideally, the builder will either have a model you can tour, another home for another buyer currently under construction, or a finished project that you walk through. Make sure the qua
12. Can you provide me with references or testimonials from previous home buyers?
Just like a job interview, a good reference can go a long way. Ask the previous buyer about the building process, issues they ran into, and things they would have done differently now that they’ve been through it themselves.
13. Do you provide a designer or consultant for help with finish selection?
One of the most exciting parts of building a new home is getting to select all fixtures and features! Everything from the sink to the flooring and the doorknobs to the lighting can be custom-designed to fit exactly what you’re looking for. The only problem? Too many choices! Many a home builder has found themselves lost in a sea of decisions with no idea what the final product will look like. Having a designer or consultant as part of the deal can go a long way to keeping this part fun.
14. Is the lot cost included?
Be sure to ask if the cost of the land (lot) is figured into the base purchase price. It’s also possible that certain lots will have a premium tied to them based on size, grade, or position in the development. If the lot cost is not included, find out what it is and whether there are additional premium costs.
15. Are you allowed to purchase your own appliances or materials?
If you have a particular brand of appliance or manufacturer for flooring you prefer, it’s possible that you may be able to purchase them yourself and then have the builder install them. However, some builders will restrict what you can and cannot bring in on your own. If you have your heart set on something that isn’t normally offered by the builder, be sure to ask about it ahead of time.
16. If you can bring in your own materials or appliances, will you get credits?
Most builders work off allowances and credits. This means you have up to a certain amount for each fixture and feature. Go over that set amount and you need to cover the difference. Go under that amount – usually that’s too bad for you. However, if you do bring in outside materials or appliances, see if the builder can give you credit for these expenses off the total purchase price.
A shot from a recent deal I worked on with some of the allowances that are being set aside for plumbing.
17. Is landscaping included?
Depending on the size of your yard, sodding and putting in trees and plants can easily cost tens of thousands of dollars or more. Some builders include your basic yard work, while others leave you with unfinished land that becomes your responsibility to landscape. Check to see what is included in the base price and what is covered by warranty.
18. Does the contract include a cost escalation clause?
A cost escalation clause allows the builder to charge you for any unanticipated costs that arise as a result of the necessary labor and/or materials. So if flooring prices go up before the builder has purchased the materials you may be on the hook for those costs. If this uncertainty stresses you out, find a builder who doesn’t use escalation clauses.
19. Are there any homeowner rules or regulations?
Some developments have homeowners associations (HOA) that can restrict your use of the property. This could mean only allowing certain paint colors for the exterior or limiting the height of a privacy fence. The builder may also set some guidelines as far as what’s allowed and what’s not on your property even if there is no HOA. Be sure to ask this question early so you aren’t burned by these restrictive covenants later.
20. Are there any financial incentives for using the builder’s preferred lender/agent/etc?
Some builders offer discounts or credits for working with certain preferred vendors. It doesn’t mean these are always the best deal to be had but it’s worth asking the question.