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Custom Homes 101 - A Buyer's Guide to Success

by Brandon Cornett

So you have decided to turn your dream home into a reality, and you are looking for a custom home builder to make it happen. In that case, congratulations are in order. Moving up to that kind of property is an exciting step.

But it also requires more homework than when buying a more traditional home. You must do more research and consider more things when having a custom home built from the ground up. There are three primary reasons for this:

  1. For obvious reasons, there is usually more money on the line with these types of properties.
  2. Building a customized home takes longer and requires more input from you.
  3. The word "custom" means different things to different builders, so the process can vary quite a bit.

More Builders Today Than 10 Years Ago

One bit of good news for buyers is that there are many more custom builders today than there were just a few years ago. The reason for this can be summed up with one word -- demand. The consumer demand for these types of houses has risen steeply over the past couple of decades. And anytime demand for a certain product rises, there will be more providers looking to get in on the action. To an extent, this has been the case with custom builders.

Of course, this has a down-side to it as well. For one thing, it means you'll have to do more homework when screening builders for your project. In a major metropolitan city, for example, you could realistically have ten or more to choose from.

On top of this, there are also builders entering the custom market who lack experience at that level. Though they are the exception to the rule (a case of bad apples spoiling the bunch), they pose a risk nonetheless. You've probably seen one of these stories on the news in the past, where a project got abandoned halfway through, the buyers had to sue, etc.

The good news, as I've said, is that most custom builders are very good at what they do and take great pride in their work. In addition, it's fairly easy to avoid the "shady" characters within this particular industry. With a little homework, you can find out which builders in town have the best reputations, and which ones have the worst. The Internet makes this kind of research even easier. Google is your friend during this process!

What Does "Custom" Mean to the Builder?

This is another topic worth addressing. Many consumers don't realize that any licensed building firm can refer to itself as a custom builder. There is no special certification to create those kinds of homes. So many who enter the field may have general construction experience, but a lack of experience customizing floor plans and properties.

And while we are on the topic, what exactly does the word "custom" mean to the builder anyway? Here again, the standards are loose. Is it the same as a luxury home? And what the heck does semi-custom mean?

Here's an easy way to look at it. A truly custom builder can create a one-of-a-kind home for you. They can either design it from scratch, or work from plans created by an architect. Either way, the end product is the same -- a house that is built for you, from the floor to the ceiling.

On the other hand, some homes labeled as "custom" do not live up to that label. If it starts with a common floor plan and merely adds on a few customizable options here and there, it does not deserve the label. Sure, it may be luxurious, and you might be able to provide some input on certain features. But if it's built from a common floor plan, then it's not a one-of-a-kind custom home. Keep this in mind when choosing a building firm to work with.

Three Important Questions to Ask

And while we are talking about choosing builders, let's address some of the questions you should ask along the way. When you consider the amount of time, money and energy that go into these projects, it becomes clear why should ask the right questions in advance. Here are a few good ones to start with.

1. How many homes do you build each year?

This will give you insight into the company's experience, as well as their completion rate. Do they start more projects than they finish, or do they complete all projects within a reasonable time frame?

2. Have you ever operated under a different name?

Some people feel like they are being too nosy when asking a question like this, but it's a perfectly fair question to ask. Remember the "bad apples" we talked about earlier? Many of them will simply open up under a new company name, if their reputation gets bad enough. You need to know this information when doing your Internet research.

3. Can I speak to some of your past clients?

Sure, their brochure says they are one of the best builders around. But that's just marketing language. Other companies will say the same thing. The best way to get an honest assessment of the builder's service and quality is by speaking with some of their past clients. Most reputable builders will have a list of references prepared in advance, because (A) they know you will ask for it and (B) they are proud to show it off. If they can't give you any names ... it's a red flag.

About the Author: Brandon Cornett is the publisher of the Home Buying Institute, which has recently launched a new section of the website to help buyers find qualified custom builders in their city or town. To learn more about this subject, please visit

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