Hiring a Home Builder versus Being Your Own General Contractor (DIY)

Building a home from the ground up can be very stressful. One of those stressors is the financial aspect.  In our current economic times, many wonder whether they can afford to build new. Questions of cost, loyalty to clients and the thought that “everyone is out to make a buck” pass through the minds of many when considering building. It brings up a great question: should I hire a builder/general contractor, or can I do this myself?

Since I work for a builder, my most common response would be “Yes, you NEED to hire a builder!” However that is not a biased response. After looking at some research, checking out some homes done by both contractors and homeowners and asking my own clients after their homes have been completed; it is evident to me that hiring a professional is the way to go.

There are many Advantages to hiring a contractor. For example, you can get exactly what you want in your new dream home. When using a semi-custom or custom homebuilder you can avoid a “cookie cutter” type home. Customizations include your lot, size of home, placement on lot, price, style, and my favorite, interior finishes. Better yet, you have the combination of all professional talents such as architects, builders, sub-contractors and interior designers who have worked together on multiple projects so they know what to expect from each other. By utilizing a builder that has been in business for years, you avoid some of the hassles that naturally occur from the construction process. Builders are a nice buffer between homeowners and sub-contractors when issues arise, and believe me…. Issues WILL arise.

Another advantage is that your semi-custom or custom home may be completed faster when you use a builder. Sub-contracting crews tend to work quickly through a job hired by a known builder. When you hire your own subs based on referrals, they tend to “squeeze” your project in between bigger builder’s projects. Builders have a more rigid schedule and sub-contractors are more willing to be on those jobs because they are more organized. Many sub-contractors get used to working with other sub-contractors, especially if they work together on several projects from a builder. When hiring your own subs, they might not know each other and not be as willing to work side by side to complete your home, thus it may take longer to complete.

Building a new home is not rocket science, but it’s also not an easy thing that just anybody can do.  Dealing with designing the home, soils reports, water and sewer taps, engineered foundations and building permits can be a nightmare for somebody who has never done it before.  That all happens before construction even begins.  There are hundreds of steps involved in the process and probably thousands of decisions that a general contractor makes during the planning and construction of a new home. There are 20-50 or more different subcontractors and suppliers involved in building a home.  They all need to be communicated with during the entire process.   A homeowner acting as their own general contractor can rely on subcontractors knowledge to get through many situations, but there will also be many times when you will need some construction knowledge to make the proper decisions.

Semi-custom and custom home builders tend to use higher quality products and get great pricing as they are repeat customers to the building supply companies. Homeowners may get price breaks, however it may be on sub-par products or items that supply companies are trying to blow out of their inventory. Subcontractors and suppliers rely on the builders for their livelihood, thus they offer better service, pricing and quality to their builders than they do to somebody trying to build a home on their own.  They know that a homeowner acting as the general contractor usually means more questions, less structure, more schedule delays and ultimately more time for that supplier or subcontractor.  They also know that the homeowner is building a home one time, whereas a builder offers repeat work.  There may also be extended warranties from builders based on those relationships with suppliers and repeat sub-contractor use.

Another factor to consider is the resale value of the home that is built.  Eventually there is a good chance that you will sell that home.  A potential buyer’s decision making process could be greatly influenced by who built the home.  Being able to say a reputable builder built the home instead of saying that it was done by the homeowner could determine whether that person makes an offer on the home, and if so, how much that offer will be.

While doing my research, I found only a few Cons to hiring a custom or semi-custom home builder. First, it is more expensive. However, I would question the value of this extra expense, and whether it truly is more expensive in the end. A home builder may charge anywhere from 10-20% for a supervisory fee.  For a home that is $500,000, that is a fee of $75,000 at 15%. The cost of time and materials to fix issues that occur due to lack of knowledge could easily reach $75,000 once you factor in the extra costs for material and labor, repeat visits from sub-contractors, extra construction loan interest and living expenses for the extra time it takes to build, and the time away from work to coordinate these fixes. Time equals money, regardless of if you build it yourself or hire a contractor.

Another Con is that with smaller, more custom home builders you must communicate with only a select few people. If there are personality conflicts, it is much more difficult to get through the process. When you are in control of your sub-contractors, you can run the conversation as you wish, however that does not guarantee you will get better results.  If you choose to hire a builder, personality is very important.  You will be dealing with the builder and their employees on a weekly basis for several months.  Make sure that builder is someone that you feel you would enjoy working with.

So now you’ve decided to hire a professional. What steps can you do to help your project run smoothly? First and foremost, make sure your builder is licensed and has an above average reputation. When a builder isn’t qualified for the job at hand, he or she may low ball the estimate due to lack of knowledge about the project. This leaves you with a subpar project or paying more for something that should have been included to begin with. If a builder is licensed, there are strict regulations they must follow to ensure the best quality work for your home. Ask some neighbors in the area you wish to build who their builder was. Don’t forget to ask them what they liked and didn’t like about those builders. Ask friends and family in the area who they used. Research sites like the Better Business Bureau or the National Association of Home Builders, or the builder’s own web site. Organized web sites generally lead to organized builders.  Pay close attention to your initial interactions with a builder.  Their communication, professionalism and promptness up front will be a good indication of what you will receive during the construction process.  Many builders have references you can speak to about the process of building a home with that company.

Another idea would be to visit model homes or prior homes built by the builders you are considering. Check out the craftsmanship of the home and inquire about any special features you may need such as green building, passive solar or a hypoallergenic home. Finally, make sure you get things in writing. Areas to consider would be time agreement, specific terms or specifications, budget and any special items that would be custom to your home

The bottom line is if you have some construction experience and more free time than you know what to do with, then you might try to take the plunge and do it yourself.  If you’re doing it to save money then you will probably regret trying to do it yourself.  Building a new home is a fun and exciting process. Utilize the tools provided by custom home builders to help lessen the stress, cost and time associated with building your dream home. Have fun, enjoy the process and happy home building!

Below are articles on this same topic and resources that were used to write this article:

http://ezinearticles.com/?The-Advantages-of-Hiring-a-Custom-Home-Builder&id=4435879

http://www.bestnewhousesforsale.us/new-home-builders/

http://www.askthebuilder.com/benefits-of-hiring-an-interior-designer/

http://nationalbuildersassociation.blogspot.com/2013/04/hiring-builder.html

http://nationalbuildersassociation.blogspot.in/2012/09/why-hire-builders-for-building-padding.html

http://nationalbuildersassociation.blogspot.in/2012/10/four-steps-to-hiring-perfect-builder.html

http://www.redbeacon.com/hg/pros-and-cons-custom-builder/

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