Examine your custom home building contract carefully, and have your attorney look it over before you sign anything. Don’t be afraid to walk out if the contract isn’t right, and the builder does not offer to amend it according to your wishes. Have a disinterested building expert look over your building materials list if you are in doubt about it, to make sure that the materials used are excellent, not just adequate and meeting minimal code. Make sure the materials list has lumber weights or brand name and the thicknesses of both outer shell, and insulation on any structural panels used.
Custom Home Building Contract Tips: Ignore High Pressure Salesmen
Do not let the salesmen rush you to sign. Actually, pushy salesmen waving a contract in your face are a very, very bad sign. Quality homebuilders and contractors do not need a pushy sales force, and would not tolerate them. Avoid salesmen obviously trained to hard sell and close like timeshare salesmen. That is not the mark of a quality home builder. There is no logical reason to rush, and the home builder will still be there a couple of weeks later when you get around to signing. Take your time. Shop around for reputable home builders and make sure that this builder is honest and will build a good home.
Upgrades are sales tactics used for a distraction. They are like those big teddy bears displayed at carnival games, designed to attract the gullible. I am not saying don’t get your upgrades, by all means get them, just don’t act overly interested. If the salesmen tell you that you have to use their lender or their appraiser to get the upgrades, just ignore them. Don’t use their lender, unless they are offering the absolute best interest rates and terms. Insist on using an independent appraiser. Do not give up the protection of an independent appraiser, to insure that the house be worth what you are paying.
As a potential customer you do not have to tolerate hard sell tactics, or feel intimidated by anything they say. If the sales staff get pushy, try to hold upgrades over your head, or start pushing you to sign a contract, tell them you are still deciding if their company is the right builder for you anyway. There are more important matters to discuss than carpet and cabinetry. Make it clear that you will go elsewhere as easily as you walked in, if they do not give you what you want, at a fair price. Believe it or not, there are a lot of very capable, top quality home builders out there who would love to build your house.
• Do not sign if there is an arbitration clause. Arbitration clauses forfeit your right to sue for damages if the worst should happen. Never sign one. If the builder insists, then find another builder. There are plenty of builders out there.
• Do not sign unless you have a signed copy of the materials list in hand. Make sure that the list is detailed and that an adequate amount of materials will be ordered. Make sure that the materials are top quality and of adequate size and weight.
• You will also want to scan your selections list to make sure that these selections are exactly what you want. Most builders will allow you to change your mind on small details, but this can hold up the process, so make sure everything is as you want it and then do not ask for changes.
• Always have your attorney look over the contract. Tell him to especially look for arbitration language or anything else that would restrict your rights as a buyer.
• Make sure there is a clause in the contract that will insure your right to inspect the property weekly or bi weekly during the building process, or at least that there is no policy or language against it. Keeping you off your own jobsite is a deal breaker.
• Insure your rights and interests are represented on the contract, not just the builder’s. It is a buyers market, so if you don’t like the deal go elsewhere. There are a lot of builders who would love to have a client like you.
• If you are buying a shell, make sure the contract specifies exactly what is materials and how much of the labor will be included. Make sure you are saving money by pricing the other labor and materials that will be required to complete the home.
• For more information on contracts download our 98 page free book, and read the other articles on this site. There is a wealth of information to help you when dealing with building contracts.
When deciding on a contractor or home builder to build your home, remember that there are many contractors who can do the job. You do not have to deal with a huge corporate builder if you don’t want to. You do not have to endure a hard sell from anyone. Choose a builder you can deal with, and make sure your interests are represented in the contract. Hire your own realtor if you feel you need the help in dealing with a home builder, and do not forget to have your own attorney look over the contract, strike out language that is not in your best interest and send it back to the builder. Give your builder the position of take it or leave it, but do not sign a contract that takes away your rights. You do not have to sign a custom home building contract that goes against your own best interest.