How to Choose a Home Builder
Home owners often fall in love with a floor plan, a community or amenities, and overlook the two most important parts of a home—the builder and the quality of the construction. Don’t let emotions overwhelm good judgment when making the largest investment of your life.
The state of Georgia is in the process of implementing licensing for builders, but it will not be in effect until January 2008. This means that Georgia currently still has no active licensing requirements for builders. There are some local jurisdictions that do have some form of licensing. However, licensing in those areas may give consumers a false sense of security, when in fact the license may lack any real criteria or inherent value.
Whether you are in an area that has licensing, or when Georgia activates licensing of builders in the future, choosing a good builder still takes some old-fashioned homework.
As a real estate agent or home buyer, you may not understand the entire process of building a new home or choosing a home builder. Buying a home is not like buying everyday items such as groceries or clothes, which are frequent purchases. This is why it is even more important to do your homework when it comes to purchasing a home or choosing a home builder. Choose a professional builder who has met criteria that demonstrate knowledge of construction, professionalism as a builder, and commitment to you, the customer.
If you find there are no Certified Professional Home BuildersSM (CPHBs) in your area, we strongly encourage you to use the CPHB criteria to help determine whether you are working with a professional builder who can stand by his or her homes.
The following is a summary of the program requirements. Home owners are encouraged to read the CPHB Program Policies and Procedures, a copy of which is available from The Housing Institute, Inc. or on the Web site at www.cphb.org.
Certified Professional Home Builder Requirements:
- Have a minimum of three years homebuilding experience.
Having experience is important in any occupation. Knowing how to build a home is obviously important, but equally important is having the management skills to run a successful company that will be around in years to come.
- Derive their main source of income from home building.
Finding someone that can do a craft or skill on the side can be a great way to save money on small and unimportant jobs around your home; however, when it comes to an investment such as the construction of your new home, finding a full-time professional is a must.
- Build to the standards set forth in the Homeowner Handbook or equivalent.
Your builder’s contract should provide you with performance guidelines and a warranty program after the sale of your home. These guidelines and the warranty program need to be in writing and reviewed by you and your family members prior to the signing of a contract.
- Have an approved Limited Warranty.
Your written, limited warranty should be clear about what is and is not covered after the sale of your home. The limited warranty should be in writing and reviewed by you and your family members prior to the signing of a contract.
- Offer mandatory binding arbitration.
Offering mandatory binding arbitration in the contract shows the builder’s commitment to resolving issues with a home owner in a quick and cost-effective manner. You are not obligated to accept mandatory binding arbitration as a method to dispute resolution, but a professional builder will offer it.
- Maintain appropriate insurance coverages, including builder's risk, general liability and other insurances required by law, i.e., workers' compensation.
Maintaining insurance for a builder is costly but imperative for protecting your investment. CPHBs must show insurance certificates in the company name with current policy dates.
- Provide written references from a financial institution, home owners, trade contractors, material suppliers and other builders.
Checking references is time consuming, but it is one of the best ways to determine how a builder truly performs. CPHBs are required to provide 14 different references, which are verified in writing by The Housing Institute, Inc.
- Pass an approved building codes exam.
Making sure your builder has passed an exam testing his/her knowledge of the state’s building code is a basic criterion to ensure your home is properly constructed. CPHBs are required to pass an approved International Codes Council® building codes exam.
- Offer customer service warranty procedures.
Be sure the builder offers written customer service warranty procedures. Knowing when the builder will return to address any warranty issues in your home and understanding the proper reporting procedure can help prevent unnecessary worry and stress.
- Allow for home inspections.
Professional builders will allow you to hire a professional home inspector to inspect the home prior to closing. Having your home inspected can give you additional peace of mind about the construction of your home. See page 104 of the CPHBSM Directory and Buyers' Guide for guidelines to help you choose a professional and competent inspector.
- Complete 16 hours of continuing education.
CPHBs attend a minimum of 16 hours of education classes annually. Classes offered include, but are not limited to business management, building practices, mold, energy efficiency and green building.
- Be members of their local homebuilders association.
Choosing a builder who participates in his/her professional industry association means that he/she is more likely to be abreast of current construction issues that could affect the quality of your home. Homebuilders associations also require members to abide by the National Association of Home Builders Code of Ethics.
- Adhere to Customer Service Standards
The Housing Institute, Inc. (THI) has partnered with GuildQuality to perform customer satisfaction surveys for all CPHBs. Each builder gets individual results and results compared to peers of the same size, and the results are currently used internally to improve satisfaction. It is the goal of THI, to make the results available to consumers in the future, once the program has been established. THI has also taken these results and are designing education classes to improve criteria where builders are not meeting satisfaction.
