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Trouble ahead? Red flags for custom homebuilders

Building a custom home is one of the biggest projects you will ever undertake. The most important person during the process is the contractor (also known as the builder).

A good contractor can make the building of a house a fantastic experience. A bad contractor can make it a nightmare that seemingly lasts forever.

Bottom line: take the time to find a contractor you can trust. With that in mind, here are red flags for custom homebuilders.

Signs of trouble with a custom builder

  1. The contractor is from out of town. Most reputable contractors have a longstanding connection to their communities. Be skeptical of a builder who is new to Austin. The builder might be excellent, but let someone else be the "guinea pig."
  2. The contractor will not provide you with a list of subcontractors. A contractor is only as good as his or her subcontractors. Subs are the plumbing company that installs the pipes. Subs are the heating and cooling company that puts in the furnace, air conditioning and duct work. It's the electrician who does all of the wiring for the home. Top-quality subcontractors are crucial for the building of any house, and a reputable contractor will be proud to let you know who the subs are.
  3. The contractor's bid is much lower than the other bids. If you receive a bargain-basement bid, you can eliminate that contractor from consideration. It's a sign that you will receive a low-quality house.
  4. The contractor wants a big upfront payment. Anything up to 15 percent is reasonable. If the builder wants 30 percent down, eliminate that builder from your list.
  5. The contractor has poor reviews on social media. There are online reviews for nearly everything, including builders. No builder will have only 5-star ratings, but a builder who has a lot of 1-star ratings with angry comments is probably not worth your time.
  6. A contractor who is difficult to communicate with. You will need to be in close contact with the builder throughout the process. If the contractor is hard to reach now, it's unlikely his or her communication will be better when the house is being built.
  7. Look at the contractor's older homes. If you want to see a builder's finished product, you will probably be shown houses that are less than one year old. That is fine, but also ask to see a house that is at least 10 years old. A lot can be learned from checking out an older structure, even if you only see the exterior.

For more information about working with housing contractors, contact an attorney who is experienced with issues related to construction law.

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