Whether you've decided to build your dream house or you're in the market for an existing home, you're going to need to survey local builders and identify the better ones in your market. If you're new to the world of home builders, that can be a daunting task. In many suburbs, a short drive around town reveals the extreme competitiveness of the builders' market. You'll spot roadside signs everywhere - as many as 10 or 12 in a cluster, and each one of them claiming that a particular builder is the best in the industry.

Who do you believe?

If you're building a home from the ground up, it's especially critical to place your trust in the right builder because you're about to establish a relationship with that company that will last a lifetime. Some consumers merely spot a house with aesthetics that appeal to them, then decide they want that builder to construct their dream house. Unfortunately, attractive surfaces can and often do conceal shoddy interior construction. Those in the market for existing homes often don't know the signs of substandard construction and are captivated by flash, glamour and in the case of model homes, professionally decorated interiors.

Before you even begin this process, learn this mantra: There are no stupid questions. Ask about whatever interests you. You're the consumer and it's the builder's job to satisfy your questions and concerns.

Ask as many questions as you possibly can. Begin your comparison of local builders by gathering as much information as you can. Drive through neighborhoods that have caught your attention, noting builder signs and the styles of homes in which they specialize. Visit online sites that specialize in new homes, architecture, and design. Pick up free real estate guides at your local bookstore or grocery store to become familiar with local builders.

You've probably identified a few architectural styles you prefer, and determining the builders who have constructed such properties will help you narrow down your "inquiry list." Of course, while you're becoming familiar with the builders based in your area, you'll learn the general price ranges for local homes. That information, too, can help weed out your possibilities from pipe dreams, so to speak.

After you've written down a few prospects, contact your local chapter of the National Home Builders Association (or access the association's Web site at http://www.nahb.org, and find your local chapter), and request a list of recommended home builders in your region. The builders appearing on NAHB's list have all met the organization's standards of quality in addition to passing the NAHB Code of Ethics. Builders appearing on both your personal list and the NAHB's should receive your attention.

Word of mouth is an invaluable informational tool, as well. Undoubtedly, you know someone who's in the process either of building their own home or who has recently purchased and existing home. Ask them about their personal experiences and ask questions:

• If that person is building his/her own home, would he or she recommend the same builder to you?

• What kinds of problems, if any, has your friend or family member encountered during the home-building process?

• Has the builder been responsive to problems and/or concerns during construction?

• Has the builder been responsive to problems and/or concerns after closing?

• How often did the builder have "status meetings" with your friend/family member to address problems, ensure their continued satisfaction, or just update them as the home was being built?

• Were the builder's sub-contractors satisfactory? This is an important consideration because sub-contractors' schedules and skills, as we all realize, can be a big point of contention with customers. If the sub-contractors' work didn't live up to your friend/family member's expectations, did the builder rectify the situation immediately?

In addition to friends and family, other good sources of information include local brokers as well as the builder's clients. If you know of someone who purchased an existing home in recent years, you'll want to ask him or her about any problems. Isolated minor problems can be expected in new homes (because new homes are amazingly complex), but expensive repairs should be a red flag. Equally important is not so much the fact that a problem may arise, but what the builder does about it. Is the builder responsive or evasive? Helpful or hopeless? There is a "service" aspect to homebuilding that should not be ignored.

Another one of your homework assignments is to visit local homes constructed by the builders on your prospect list. Don't be dazzled by the aesthetics, and don't just visit one of the builder's homes and assume that's enough to gain your approval. Ask each builder to provide you with a list of several properties in your area -- a list that will give you a broad representation of the builder's work, incorporating various styles of architecture, square footage, etc. Study the quality of the builder's work. It's sometimes very easy to spot hasty workmanship and cheap materials.

Ask the builder also for a list of references. For those builders in which you're most interested, request the names of at least three clients, and speak to all of them before you make any decisions.

In most cases, you're going to receive nothing but glowing reports from a builder-provided list. That's not unfair -- would you really expect a professional in any field to provide references from disgruntled consumers?

For more neutral comments, you might consider simply driving through a neighborhood in which the builder has recently constructed properties, and if you see any residents outside (do this on a weekend afternoon, when you're more likely to spot activity), pull over, tell them what you're doing and ask about their experiences.

The most important questions you can ask are: "Would you build [or buy] another home with this builder?" Why?

In an informal situation like this one, you'll find that homeowners won't hold back. They'll either give you a glowing report, or a detailed account of their misery. Either way, you'll come away from the experience much wiser. This honest account is perhaps your most valuable and telling market research tool.

Selecting a builder is one of the most important decisions you'll make. This is the company in which you're trusting what is likely to be your single largest investment. So leave your rose-colored glasses at home, and keep your eyes and ears open. With time and patience, you'll learn enough information to make a wise decision.

For more articles by Courtney Ronan, please press here.

Published: February 12, 2001

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