At this time, we do not have a construction loan program available. Below is some information about the process should you be going forward with another lender.
Custom Building
Choosing Your Builder
Choosing the “right” builder can mean the difference between a building process that is an exciting adventure, and one that’s a never-ending nightmare. How do you know who is the “right” fit? Good research will help determine if the builder is ethical, reliable, and knowledgeable. Gut instinct will tell you whether the builder is someone you can interact with on an almost-daily basis for the next several months. Here are some steps to consider when selecting a builder.
Application
You are about to trust your builder with large amounts of money and with the quality of construction of your new home. Don’t you want to know enough about them before you make a decision? Ask them to fill out a Builder’s Application, and then follow through.
Check References
You can do this, or your real estate agent can do it for you. Call past and present homeowners. Check bank references. Talk to his subcontractors. Visit a present construction site. Is it clean, orderly? A messy construction site generally means that there is not enough supervision by the general contractor.
Narrow the List
Ask your architect, real estate agent, friends, and homeowners in the area for the names of several good and reputable builders. If you have been driving in your neighborhood and there are other homes you like under construction, jot down the builder’s name and telephone number. Then do a brief phone interview of five or six, and narrow your choices to three.
Personal Interview
Prepare questions you want to ask. Discuss communication and expectations. Ask the builder what he or she thinks are their strong points: reasons you should choose them over another builder. If you have trouble communicating in this first interview, realize that it won’t get any better and move on.
Set Expectations
If you have a timetable that must be met, discuss how this can be achieved and what penalty occurs if it is not. A promise to finish by a set date is easy to make prior to the commencement of construction, and hard to deliver after the start. The builder should also discuss with you his or her expectations: areas such as timely payment of draws, no interference directly with the subcontractors, and making selections by specified deadlines.
Clarify Selection Process
When should you make these decisions and where should you go to look at your choices? How will you know what products are within your budget and which would go over?
Review Change Order Process
It is very easy, as construction progresses, to make choices in flooring or tile that exceed your allowances. Ask the builder how change orders are handled and paid for.
Bid Prices
Once the plans and specifications have been sent to the builder, they in turn will send the plans and specs to their subcontractors. The builder will assimilate all of the bids, factor in his expenses and profit, and present an itemized bid for your review. You will want to review the bids with your architect, determine what can be cut or adjusted to fit your proposed budget, and compare the offerings of the builders.
Builder’s Contract
After you select your builder, he or she will prepare a legally binding contract that outlines the builder’s responsibilities, your responsibilities, and any rewards or penalty for timely or tardy completion. It will also outline what methods are acceptable should you and the builder get into a dispute. The contract will also reference the plans and specifications and the total cost to build the project.
Construction Commissions
Many states have organized commissions to provide oversite to the construction process. Although too long to list here, we recommend that you research your particular state commission. As an example, the Texas Residential Construction Commission was established to "Provide Texas homeowners and the residential construction industry an opportunity to resolve differences through a neutral dispute resolution process and ongoing education."
Your builder and your home building project must be registered with the Commission.
Go to their website for information and education.
