MISTAKE #1:
Before Beginning Your Build
A.) Home Building: Handing Over a Blank Check
Most of us would never even dream of spending money for a large purchase like a car just by simply looking at the exterior. We would never purchase it without a thorough investigation of the interior, checking out the ratings by the experts, or getting the opinion of others who have owned the car. We even usually find it necessary to test-drive the actual car that we will be purchasing. If the circumstances are such that it turns out we bought a “lemon” car (that is, a car that has defects through no fault of the consumer)[1], then each state has laws to protect the consumer, generally requiring the dealer and/or the manufacturer to reimburse the consumer for all costs associated with the “lemon” vehicle. In fact, most of us wouldn’t spend more than $40.00 on a shirt or pair of pants from the store without trying it on, making sure it is made of the quality material we are looking for, and that it fits in all the right places (i.e. the legs aren’t too long, the rear end isn’t too baggy). Finally, there is no way we would hand the auto-dealership or the store clerk a blank check and say, “Go ahead and charge me what you need.”
Most of us would never even dream of spending money for a large purchase like a car just by simply looking at the exterior. We would never purchase it without a thorough investigation of the interior, checking out the ratings by the experts, or getting the opinion of others who have owned the car. We even usually find it necessary to test-drive the actual car that we will be purchasing. If the circumstances are such that it turns out we bought a “lemon” car (that is, a car that has defects through no fault of the consumer)[1], then each state has laws to protect the consumer, generally requiring the dealer and/or the manufacturer to reimburse the consumer for all costs associated with the “lemon” vehicle. In fact, most of us wouldn’t spend more than $40.00 on a shirt or pair of pants from the store without trying it on, making sure it is made of the quality material we are looking for, and that it fits in all the right places (i.e. the legs aren’t too long, the rear end isn’t too baggy). Finally, there is no way we would hand the auto-dealership or the store clerk a blank check and say, “Go ahead and charge me what you need.”
We would never
find ourselves in those circumstances because it is not economically smart, we
don’t want to be taken advantage of, and we want to make sure that the purchase
is exactly what we need and want for the price we expected. Yet, for some unknown reason, the
residential home building industry is exactly that.[2]
The industry norm
is that average, every day people have an idea or have seen a home they want to
build, and then hand what will most likely be the largest purchase they have
ever made in their life over to the “professionals.” Entire television series have
developed capitalizing on the nightmare build- where the “professionals” cut
corners and/or fail to do their job properly, resulting in sometimes thousands
of dollars more than the homeowners had budgeted and years of subsequent
problems.[3]
B.) The Professional
vs. You.
This problem,
unique to the residential building industry, occurs because of the incredibly
unequal positions of the players: the builder (i.e. the “professionals”) on one
side, and the homebuyers on the other.
It is as if Steven Spielberg goes against a high school film student in
a competition for “Best Movie Director.” While most of you may be “professionals” in your own
right, you most likely wouldn’t be hiring a builder unless you lacked the
skills to build your dream home yourself.
This problem is
almost never found in the commercial building industry because there are professionals
on both sides of the table. Before
a multi-million dollar airport is built, the attorneys and professionals
representing one side, discuss and meet with the attorneys and professionals
from the other side, and engage in extensive, lengthy discussions. The commercial contracts, often
dozens of pages long, explain in detail every minute aspect of the build. Now, while your home build will most
likely not be near a multi-million dollar project, to the average homebuyer who
has scrimped and saved, it might as well be that amount. It is just as important to protect your
“widow’s mite”[4] as it is for
the commercial industry to protect their millions.
C.) Tip
#1: Due Diligence
This leads to tip
number one: never begin your home
build without doing your own due diligence!! This step should be completed even before you start
with the blue prints of the home. With
the miracle of modern day technology, you have at your fingertips thousands of
pictures of homes without even leaving the comfort of your own living room. For example, there are free websites that allow you to enter specific search terms bringing you to sometimes
hundreds of pictures matching that description (i.e. “hardwood kitchen floors,
white cabinets”).[5] Additionally, most home improvement
retailers allow you to see pictures of their products on their websites or even
eBay lists hundreds of home improvement items.
When you find a
picture you like, save it, print it, bring it to a local retailer and say, “I
want this…what do you have?” If
you have a little more time on your hands, drive around to the various home
improvement show rooms and see what you like.
Ask what the
difference is between the various priced items. Do you like solid wood doors or will hollow be
sufficient? Do you like Travertine
or does a normal tile work? Do you
like painted cabinets or simply stained? Keep a list of those items you love-
know how expensive they are. The
difference between these seemingly insignificant details can lead to
significantly larger amounts of money added to your bottom line.
The more prepared
you are going into the home building process- the more realistic you can be on
how much you can expect to spend on your home and the happier you will be with
the process and your builder.
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[1] “A lemon
is a car,
often new, that is found to be defective only after it has been bought. Any
vehicle with numerous, severe issues can be termed a "lemon," and, by
extension, any product with flaws too great or severe to serve its purpose can
be described as a ‘lemon.’” http://en.wikipedia.org/wiki/Lemon_(car)
[2] http://money.usnews.com/money/personal-finance/articles/2012/04/23/build-or-buy-a-housing-market-dilemma
(stating that building a home is not “economically smart”)
[4] The “widow’s
mite” is a Biblical allegory explaining that “the small sacrifices of the poor
mean more to God than the extravagant, but proportionately lesser, donations of
the rich.” http://en.wikipedia.org/wiki/Lesson_of_the_widow's_mite
[5] See e.g. http://www.houzz.com
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