Home Building Tips for the Owner / Builder
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Contracting a Home: Sites, Permits and Subs

Most first-time self-contractors are eager to start building right away. But this is where the real legwork begins so the whole building process will go smoothly. Well, it may not go perfect, but you'll sleep better knowing the legalities and paperwork are taken care of.

Finding A Site

Selecting a site is based upon a few things like availability, personal tastes, and price. Other self-contractors say that finding a good lot to build on is getting more difficult. One reason is that large blocks of open land are purchased by developers/builders. They get the lots fairly cheap, and that keeps prices down later when they build. But it really ties up a chunk of land and can limit your choices when there are several builders around.

Many "hot" areas with lots for sale are all owned by a building company. Most (if not all) new homes built there are done by that company. But in some cases, the lots can be bought.

Keep searching the areas you like and hunt down any lots for sale. Or, track down the landowners and make them an offer they can't refuse. Otherwise, keep your eyes open and jump on any leads.

There are a few key items to think about when buying a lot. For proper drainage, the house shouldn't be in a low spot or at the bottom of a hill where runoff will head. Each piece of property has easements that dictate where utility lines can go. Easements and lot restrictions will also influence the actual location of the house.

Permits & Inspections

It's your responsibility as the contractor to make sure that the proper permits are purchased and that inspections are scheduled. Many subcontractors will help out by calling for inspections by themselves. But you should always agree ahead of time exactly who makes the call or later on you may be ripping out insulation and drywall to show inspectors the plumbing or wiring that wasn't checked.


Timing can be critical when your crew finishes the forms at 2:30 and you've got concrete coming at 3:00. So it helps to call the inspectors the day before with an approximate time so that they can be ready when you are. When it comes to staying on schedule, inspections can often fit right in. Coordinating subs is a juggling act, but it's one way to get back on schedule.

Planning Detail

We always emphasize having a detailed plan before trying to set your schedule and budget as this will allow you the opportunity to get actual quotes from sub contractors and suppliers. However, in this case, we're not just referring to the houseplan, but a construction schedule and work details that are as specific as possible. Anything that isn't fully explained in the plan will raise questions and delays with subcontractors. Quickly coming up with on-the-spot solutions takes experience that most of us just don't have.
The whole planning process depends on getting specific and thorough with techniques, fixtures, millwork, wall & floor coverings, and everything else you're including.
That means taking time to research specific brands and prices -- not just general notions like vinyl windows or nice shingles. The resulting plan will also help subcontractors and suppliers give you more realistic bids.
Building materials are often related. For instance, certain shingles may require copper flashing instead of metal; otherwise the warranty is voided. Be aware of these sort of requirements and account for them in your plans.

Getting & Comparing Bids

Make Multiple copies of the construction plans right off the bat so you don't have to shuffle the same sets of plans to subs and suppliers when getting bids. Send plans out all at once and expect responses in a week or so.
Then you'll have a pile of bids to go through. Each can look very different, but as long as they cover the same labor and materials, you'll be able to look for bids that are consistently lower in price. Often, a bid is lower due to cheaper materials. Check that all the bids include the same plan specifications. Then you'll know it's a fair comparison and be confident going with the lower bid.
A few people automatically accept the lowest bids in each area and build their house as cheaply as possible. However, as most people realize, the low bid is not always the best bid. For one thing, a small minority of subcontractors will "low ball" bids to get the job, then find a hundred extra things to charge you for.
That's one reason you want the plans to be real specific on what products and materials you want. To compare bids fairly, you need them to be the same.
Several work items like trim, garage door openers, and appliances overlap between subs. Siding, for example, is often done by framers or finish carpenters, or even a siding contractor. You'll need to do some more legwork on bids for the overlapping and leftover jobs. But your subs will usually take on the odd jobs if the price is right since they're already on-site. Yet, double-check that what they'll charge for the job is reasonable. Sometimes, the subs you contact are too busy to fill out a detailed estimate. Instead, they'll give a price over the phone and promise to follow up with details later.
It's not the ideal way to get a bid, but there's usually some flexibility in accepting it. You can start with the bid to get the loan process going and change it later if it's way off -- as long as the banker agrees.
For remaining items you can't nail down, put in a realistic allowance and replace it with the exact figure later. But it's important to use that estimate as a bookmark figure so your whole budget doesn't get thrown off.

Choosing Subcontractors

We've talked about bankers, architects and inspectors, but you'll spend the most time hiring, scheduling and supervising subcontractors (subs). And finding good subs is one of the hardest parts of self-contracting.
As we've discussed, you should have detailed plans available before you start calling subs. When you gather bids, the subs should give you references, a license number (if applicable in your area), and proof of liability and worker's compensation insurance.
Always call a sub's references. Ask what the sub is like on the job, if they stay on schedule, and if they do good work. Also check with the Better Business Bureau, local building officials and the sub's bank to make sure the subs have good histories.
Hiring good people is usually worth the extra money it may cost. You'll be able to trust them and won't need to be on-site to constantly supervise.

Hiring A Construction Consultant

We think it's a good idea to periodically meet with an experienced builder to serve as your consultant. Our packages include the services of a qualified site instructor for the first week however this time period can be extended for an additional charge. A thousand questions develop throughout the project and it helps to find someone who'll give you some good answers. How much help you require will depend on your experience and addaptabillity. Once we have left the site you may wish to retain a contractor as a site supervisor on a part time basis. You'll also need to agree on payment like a fixed or hourly fee, or a percentage of the home's final cost.
Budgeting for on-site observation on an hourly basis can save you time, money and trouble down the road. Just don't call them out every day or you'll break the budget pretty quickly. Try to manage their on-site time well and try to set a fee limit.

Buying Insurance

As your own contractor, you should be covered by more than just a homeowner's insurance policy. Minor mishaps are typical on construction sites, but a major accident and/or a lawsuit can halt a project.
Make sure you have enough insurance to cover those "worst case" situations. The policies can get pretty complicated, so consult with an insurance specialist before work begins.
Check into a builder's risk policy, owner-contractor protective liability, general liability, auto liability, and worker's compensation to cover any gaps that your subs' policies may have.

Signing Contracts

A good labor contract will basically lay out your expectations on price, schedule and workmanship; all are issues that can end you up in court when there's no signed agreement before work begins.
Contracts should deal with situations involving completion date and a holdback of funds until the work is done. It also should have some warranty provisions regarding the quality of work and materials. If penalties are written in, include provisions allowing for bad weather, holidays, late deliveries or on-site changes.
Changes usually cost more money, so include a provision that requires written change orders with prices requiring signatures from both you and the sub. That way, everyone knows what's involved.
You could write a standard contract for your subs or if you wish you could go to a real estate specialist, they'll have standard forms that should get you through the whole contracting process. They can tailor the contract to your project for a flat fee. There are standardized forms available, but they may not cover every transaction.
Many subs will send you back a signed estimate after getting your plans. If you sign, it becomes a legal contract. But it's not written to protect you. We recommend sending your contract with each plan that's mailed. You take the initiative and structure the deal your way. If a sub refuses to sign your contract, you can work out a compromise or find another sub that will work on your terms.

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