Published by Jumpfactor 10 Milner Business Court Floor 3 Scarborough, Ontario M1B 3C6

Transcription

1

2 Picking a Custom Home Builder: 12 Things You Must Know to Make the Right Choice Copyright All rights reserved. No part of this publication is permitted to be reproduced, disseminated, published, or transferred except with prior written permission of Jumpfactor. Copyright infringement is a violation of federal law subject to criminal and civil penalties. Published by Jumpfactor 10 Milner Business Court Floor 3 Scarborough, Ontario M1B 3C6 Design by Jumpfactor. Visit us at

3 About this book What? A comprehensive guide explaining the most important factors to consider when selecting your custom home or cottage builder. Why? To help you select the best custom home builder possible, who is capable of executing your preferred designs, has the experience necessary to complete your project on-time and on-budget, and has the skill to deliver an exceptional home. Who is This Guide For? Anyone exploring the idea of building a custom home or cottage, who wants to make this substantial investment the right way. Who is This Guide From? This ebook was prepared by Woodcastle Homes Ltd., one of the most reputable and sought-after renovators and custom home builders in Mississauga, Toronto, the GTA and Muskoka. How Can Woodcastle Help You? Woodcastle Homes Ltd. offers renovation and home building services that encompass the following areas: Design & Build Custom Homes and Cottages Additions to Existing Homes and Cottages Interior and Exterior Renovations Interior and Exterior Design Energy Efficiency And Much More

4 Table of contents Introduction Where to Start: Find Your Builder 1: Why? Assistance Selecting an Architect 2: Why? Assistance Selecting Your Building Site 3: Why? Assistance Finding Subcontractors Selecting the Right Builder 4: You Want: Experience 5: You Want: Expertise 6: You Want: Licensing 7: You Want: References 8: You Want: Warranty 9: You Want: Involvement 10: You Want: Resale 11: Cost Structures: What s in a Contract? 12: Planning the Project: Your Needs & Your Budget Conclusion

5 Introduction Selecting the right builder is arguably the most important decision you will make during your custom home project. You must keep a number of important things in mind throughout the building process, and having the right home builder on your team is an essential starting point. This guide will explain: Why you should make finding the right custom home builder your first step, How to identify the right custom home builder for your project, What kinds of contracts and costs you can expect, and How to plan a project that meet your needs and is within your means. 1

6 Where to Start: Find Your Builder So. It s time to move. And you re thinking about a custom home that s great. There are some excellent reasons why many people are choosing to go the custom home route. You have exhausted all possibilities to buy a resale home and can t find exactly what you are looking for. You have found the perfect lot,but hate the house that sits on it. Construction of single-family homes has dropped to less than 50% of usual rates in most years since 2009, making inventory tighter for existing homes. You want a brand new home that has all the bells and whistles that you desire and that reflects your families lifestyle! There are many other reasons to consider a custom home. Perhaps you know that this home is where you ll likely end up staying for many years to come, and you want to make sure it s a perfect fit. Whatever your reasoning, you have a certain set of needs and expectations in mind, and we at Woodcastle Homes Ltd. are here to help you meet them by finding the right builder. When you first embark upon your custom home building project, you are likely to get overwhelmed very quickly. There are many decisions to make, from builders to subcontractors, architects and design styles, building sites and much, much more. Rather than attempting to wade through all of this information yourself, it is helpful to start with someone who is likely to become the cornerstone of your entire project: your builder. Here are just a few reasons why: 2

7 #1 Why? Assistance Selecting an Architect Your builder is an invaluable resource: he or she is likely familiar with just about every architect in your area. As you start discussing your project, he or she can recommend which architects specialize in the kinds of designs and styles you want in your home, and help you find an architect that fits within your budget. Your builder can also help you negotiate with your chosen architect for better pricing, as builders often have strong referral relationships with architects due to the volume of business that they exchange. A good builder will steer you toward an architect with the right level of expertise in your chosen design and who fits within your budget. By selecting your builder before your architect, you can also involve your builder in the design process, which can help you address budget issues early in the design phase, and can provide you with valuable input in order to avoid construction problems before the project even gets started. #2 Why? Assistance Selecting Your Building Site As you start designing your dream home, the next question is going to be where you will put it. You can save yourself a lot of time, money, and frustration by having your builder give you some insight into what kind of lot works best with your chosen design. Are you currently eyeing a building site that would need a lot of resurfacing and alterations in order to hold your new home? Your builder can make you aware of those kinds of issues and costs upfront, and help you consult with any needed engineers and surveyors, so you can decide the best way to proceed when you go to purchase your land. Excavation costs can be as much as $50 to $200 per yard depending on the company used and the prevailing rates at the time. This does not include other costs like tree removal and grading. 3 Blasting the Canadian shield to accommodate a cottage in Muskoka could possibly run into the 100 s of thousands of dollars. 3

8 #3 Why? Assistance Finding Subcontractors Different subcontractors have different levels of expertise, and often offer their services at a variety of different costs. Your builder is likely familiar with all of the different subcontractors in your area, from interior designers to landscapers. He or she can help you pick which ones will give you the best value for your money, and which ones will work the best for your particular tastes and designs. Just as with the selection of your architect, quality subcontractors can make or break your project, and having your builder act as the coordinator for all of these teams helps to ensure you will end up with an exceptional final product. Make sure you ask your builder plenty of questions about the various subcontractors he or she uses. Here are just a few of the subcontractors that will be required: Interior Designers Landscape Architects Plumbers Painters Excavators Roofers Engineers Lighting Specialists Electricians Carpenters HVAC Contractors Drywall Contractors Having your builder assist you with the selection process will likely take a great deal of stress and uncertainty out of your project, and can even help you save on costs overall. 4

9 Selecting the Right Builder If you re now convinced that finding the right builder is the key to having a successful custom home building experience, then you are likely asking yourself how to find the right builder for your project. There are a number of factors to consider, and we will go over them in detail here. 4 #4 You Want: Experience Experience is one of the top factors to consider when selecting your home builder. While natural talent can go a long way, just as with any skill, home building takes time to develop. An experienced builder has likely confronted many different types of building and design issues in the past. He or she knows how to adapt when problems arise, and knows where to turn to get the information needed to fix whatever complications come along. Experience also helps a builder know what special codes and requirements exist in a particular location where you d like to build, and how to find out what permits are required for your project

10 When researching home builders, look for experience that might be present in a variety of ways. They might come from a background working for other custom home builders, or from contractors and subcontractors who have extensive experience in the field. Also look for credentials and schooling: what kind of education does the builder have, and is he or she up to date on current issues in home building via continuing education? You should find much of this information readily available online, and you should always do whatever you can to verify the credentials your home builder provides you. Definitely, you should make sure that your builder is Tarion Registered. #5 You Want: Expertise Prior to even seeking out a builder, you have likely already started planning out your custom home, or at least have a rough idea of the style and design that you would like. Keep in mind that different home styles require different skill sets. A simpler box-style home with only a few roofing accents requires less roofing expertise than the multifaceted designs often found on homes in the French country style. If you have a general idea of what you want and simply need some help fleshing out the details, then a great place to start is by looking at homes in the general area of where you want to build. What homes are there that have the kinds of design touches you want included in your home? By taking this approach, you can find builders who have specific expertise in the type of design you want to implement in your home. #6 You Want: Licensing Home builder licensing is a local matter rather than a national matter in most places. This means that licensing is likely to come from the state or province, or even the local municipality. In Ontario, licensing is handled at the local level. Contractors must have a valid license from the City of Toronto in order to do construction in that area. In addition, some municipalities require that subcontractors be licensed as well, including those who work with concrete, roofers, bricklayers, insulators, and various others. If you want to verify that a contractor is licensed, you can typically call the municipality office that handles licensing to confirm that the license is valid and up-to-date. 6

11 SIDE BAR?: * 300,000 contractors and subcontractors are in the Ontario College of Trades public registry, which can be used to verify qualifications.5 Doing this due diligence for both your builder and any subcontractors you know will be used is a good step in order to ensure you get the best value and that you avoid any potential legal issues when your new home is being constructed. In addition, keep in mind that some trades within Ontario also require a Certificate of Qualification (C of Q) to be part of that trade. These include specialty trades like electricians and plumbers, as well as HVAC contractors and some metal workers. Having this C of Q certifies to you that the tradesperson has experience and has been part of an apprenticeship program, as well as taken certain licensing exams to check for competence before going to work in the field. Licensing exists for your own protection and indicates a certain level of compliance and competence. It may also be illegal in some places for certain types of work to be performed by someone who lacks particular types of licenses. Making sure that all of the contractors and subcontractors involved in your project are licensed will save you time, money, and potential legal trouble with the municipality down the road. In Ontario, it is illegal to build a home with out being a Tarion Registered Builder. 7

12 #7 You Want: References Good home builders are not afraid to give you the names and numbers of past clients. Rather than tucking that list away along with all of the other paperwork associated with your home building project, why not give a few of them a call? Better yet, will they let you stop by and take a look at the completed product? If you aren t sure what to ask a builder s references, here are just a few questions to get you started: Did you enjoy working with this builder? What problems came up during the project and how were they handled? Were you happy with the overall experience? Are you satisfied with the house this builder built for you? Did the builder stay within your initial budget? If not, how far off was the final cost and why? Did the builder finish your project on time? If not, why? What recommendations do you have for working well with this particular builder based on your experience? This particular aspect of your due diligence may take quite a while to perform, and may require you to speak with people you do not necessarily know. That said, speaking with past clients is one of the best ways to get insights into how a builder works and how to avoid any potential pitfalls. Take the time to talk to people to get the real story. 8

13 #8 You Want: Warranties Following the building process, a government inspector will come by and conduct an inspection to ensure that your new home is fit to be occupied. While this certifies certain minimum levels of livability, it does not guarantee that your new home meets all of the requirements you agreed upon with your builder, or even that everything in the home works properly. Often times, defects may not even become apparent until a certain season begins, and you put your new air conditioner to the test. You may have to wait to see how well your home stands up to wind, rain, sleet, and snow before you know that it is structurally sound. If defects do emerge, there is a good chance that your homeowners policy will not cover it; why? Because it is considered a construction defect, and these are excluded from many policies. In order to avoid costly problems, you will want to inquire about your builder s warranties. These are a standard practice in most places, and they offer a limited guarantee on the builder s work. These warranties can appear in the original contract signed with the builder, or may show up as an individual document. They should guarantee certain aspects of the work performed, and are often divided into terms. For example, materials and labor tend to have a one-year term, while defects in mechanics like heating, electricity, and plumbing are often covered for two years. If you want to make sure the warranty is good and want to understand more about what it covers for you, then you should be sure to get an attorney to review these documents prior to signing anything with the builder 6. You can also make yourself familiar with the Tarion Warranty guidelines which can be found on line. This ensures that you actually have a 7 year warranty on your home. Any licensed and reputable builder will be able to provide you with a Tarion Warranty. If they can t, this should be a major red flag! 9

14 #9 You Want: Involvement There are a number of professional associations for home builders, from big international organizations to small local groups. You should look for a builder who is involved in at least one or two organizations in some capacity. This kind of involvement denotes some amount of professional responsibility, as well as respect within the general homebuilding community. You can even contact several of these organizations to see if they have recommendations for home builders in your area. Here are just a few to look for in Canada, Ontario, and Toronto in particular: The Canadian Home Builders Association (CHBA) (Canada) 7 The Ontario Home Builders Association (OHBA) (Ontario) 8 The Building Industry and Land Development Association (BILD) (Toronto) 9 #10 You Want: Resale While you may be planning to stay in your new home for a long time, and real estate values tend to fluctuate on top of that, you will want to check how well your builder s resale values have held up over time. Why? Expect the unexpected. If you are still working, there is a chance you could be transferred due to your job, or you may have to move due to unanticipated family needs. You do not want to end up taking a substantial loss on your investment in a custom built home if you end up having to sell it in a few years. Financing. If you are using loans to build your custom home, you likely want to avoid getting into a situation where your house is suddenly worth less than the loans on it. This situation can cause a number of problems if you need to sell or refinance. Equity. Similar to the financing issue, you may at some point decide you would like an additional line of credit on your home, either for further improvements or for other financial reasons. If your home s value is too low, you will not be able to obtain a home equity line of credit or other financing that might be helpful

15 If you are working with a realtor and strongly considering a particular builder, conduct some due diligence: what homes have recently sold in the area that were done by this builder? How much did they sell for? How much did the owner who built the home pay for it? If there are consistently significant disparities, you may want to take a closer look before proceeding. Remember that housing prices have been on an upward trend, with last year s data indicating a 4.1% increase in new housing prices. Is your builder s average in line with that statistics? #11 Cost Structures: What s in a Contract? There are a few different types of building contracts you are likely to encounter as you seek out a home builder for your project. Here is a breakdown of each one and the pros and cons to consider: Fixed Price Contract. In this contract, all costs are detailed in advance and the owner knows exactly what price s/he is going to pay. This is often a great contract from the owner s perspective, as costs won t fluctuate. Lenders also prefer these types of contracts, as they then no longer have to worry about budgeting. The downside is mainly by the builder; miscalculations can lead to very bad losses. This can cause builders to overestimate to be on the safe side, which can cause owners to overpay for their homes. Cost Plus Contract. Also known as a cost-plus-percentage contract, it seeks to eliminate many of the downsides of the fixed price contract, and is often ideal for projects that are more complex or which may be difficult to estimate. This is also a helpful contract when the owner is not certain about many of their specifications and may make certain decisions on the fly, which can then be factored in later. Owners often get greater control over costs here, which makes them more comfortable. However, it can lead to overpayment in some cases. Owners may go over budget due to the flexibility, and this structure also gives the builder a reason to spend more money in order to increase the percentage. Project Management Fee. This method allows the client to be in full control of all costs. The project manager will enter into a formal contract with each contractor on behalf of the client, in the form of a fixed price contract. The client can take as little or as much involvement in the actual construction as they desire. This is beneficial as it provides limitless flexibility to save on costs if the client wants to get involved in any of the work. 11

16 Which contract structure you select will depend on your budget, the size and scope of your project, as well as the customs in your particular building area. It is a good idea to consult with an attorney before signing anything, in order to be certain that you understand the nature of the contract and the rights and obligations of all of the parties to it. #12 Planning the Project: Your Needs & Your Budget If you have followed our advice, then you have likely started the process of finding and interviewing your builder prior to doing anything else. When you select a builder who meets your particular needs, and agree upon some preliminary contract terms, you will then need to start planning out your new home. The final product you agree upon will likely depend on a mix of what you need and what you can afford: 1 Location. You may have a general idea of where you need to be, but your builder is hopefully familiar with the area and can give some recommendations about sites. This can include areas close to where you need to commute for work, or near desirable amenities that fit your lifestyle. As always, school districts are a major consideration for many families, and you should keep an eye on property taxes in the area as well. 2 Energy efficiency. A big perk of building a custom home is that you can add in a number of energy efficient features, working from the ground up. While many of these features can cost more upfront, they tend to save homeowners lots of money over time. 12

17 3 Materials. Your builder may present you with a number of different options for building materials, from the siding to the roofing, and even interior options. Always get an estimate and make sure the materials are within your budgetary limits. 4 Finish. Many homeowners enjoy the process of adding the finishing touches to their homes. From picking out doorknobs and cabinet handles to deciding what colors to paint in each room, finish is what often makes a house feel like a home, and gives you a chance to help your house stand out from the rest. These items are often matters of personal taste, but if you are working with a skilled builder and design team, you can likely find trim and other specifications that meet your tastes without going over budget. 5 Special needs. Many custom homes these days are equipped with features to help people with mobility problems. From built-in elevators and chairs that assist with stair climbing, you may want to incorporate these items for yourself or members of your family. These considerations can mean everything from building wider halls and aisles in the kitchen to accommodate mobility devices, to installing ramps to assist with getting in and out of the house. As you complete the planning process, you should get a better idea of what areas will end up costing you the most. Do not be afraid to ask your builder for recommendations on how to save on costs while still getting the features you want and need. 13

18 Conclusion You are now equipped with the knowledge you need in order to decide on the best custom home builder for your particular project. You should also have a better idea on how to find and interview home builders, and what role your builder will ultimately play in your home building project. Hopefully you also better understand the costs involved, and how you can ensure your home building process goes as smoothly as possible. As you progress through the various stages of building your dream home, be sure to check out our website and blog for additional resources to assist you. We are here to help you make your dreams into a reality. -The Woodcastle Team 155 Queen St. E. Mississauga, ON L5G 1N2, Canada Tel: (905) Fax: (905) Toll Free:

19 Additional Resources Find the Builder With the Best Luxury Custom Homes Toronto Can Offer: Finding, Interviewing, and Hiring the Right One Constructing Your Home with the Expert Home Builders at Woodcastle Homes What Services can Custom Home Builders in Mississauga Provide That You Can t Find Anywhere Else? Choosing the Best Home Renovation Contractor Doing Home Renovations in Toronto? Avoid These Common Mistakes and Save Thousands

20 About the Company Woodcastle Homes Ltd. is one of the GTA s most reputable and sought after Custom Home and Renovation Builders in Mississauga, Toronto and the GTA. We have achieved this by building a reputation based on building solid, luxurious mid-to high- end projects in some of the most sought after neighborhoods in the GTA. 16

21 Visit our website at: for more information about our products, please Contact information: tel: Fax: toll free: SHARE THIS EBOOK Tweet it!