Choosing A Builder - Again

Johnny Brenan’s death required a fresh start in our search for a builder.  When we decided to work with Johnny, it was on personal recommendations from a number of people, including people our daughter worked with.  We liked the work he did on the Keyser house in Leavenworth, and the chemistry was great. But we had to move on.

Now, I think a lot of architects and every one of the trades.  But for me, the builder is the most important member of the team: part conductor, part tradesman, psychologist/marriage counselor, keeper of the purse.  We started with putting out feelers.  A number of people had recommended names of builders in the area.  We also reached out to our architects and others to generate a list of potentially qualified builders.  We researched their websites to look for projects that were comparable in size and type to our project.  After looking into their work, we narrowed the field to 5 and did a phone interview.  From the pool of five, we chose 2 to prepare an actual bid for the project.  That’s where we are now.

The phone interview told us so much about each builder.  Here are the questions we asked:

Background/History – how did you get into this business?  Are you a general contractor/Construction Manager (GCCM), or are you hands-on for certain aspects of the work?

Different strokes for different folks, but our preference was a home builder, not a general contractor.  A GCCM subs out all the work, and delivers value to the owner by effectively managing all the players, the schedule and budget.  This is not to be dismissed – like any other orchestra, someone needs to conduct. But we want our builder to have intimate knowledge of the house in all of its stages, to be able to speak with intimate knowledge of the problems we need to solve together, a good sense of our desires, and the ability to relate to the architect.  Knowing he puts on the bags for various stages of the process felt right.

What parts of the home-building process do you do yourself?

It only makes sense that the foundation be right.  If something is off in the foundation, it will make its way through every other stage of the process – through framing to finish.  Not to disrespect foundation contractors, but if they’re just there to form and pour the foundation, they don’t have as much to care about in how it turns out as does the guy who’s going to frame it. We want our builder to be directly involved in the big parts (foundation, framing, finish carpentry), and are just fine with everything else being subbed out. 

What is your preferred method of contracting?

There are many variations, but most homes are built under either of two types of contracts:  fixed fee (or lump sum), or time-and-materials.  With a fixed fee, the builder absorbs all cost overruns, you make periodic (progress) payments, but run the risk the price is set too high to provide contingency for the builder.  With a time-and-materials budget, you only pay for the work that is done – but there can be no end of the process if a not-to-exceed amount is not agreed to up-front.  

A word on materials costs. On a time and materials contract, it’s the markup on the materials being passed through to you that provides the builder his profit margin. There are basic materials needed to build a house – trusses, nails, concrete.  But there are also all the costs to make the house your own – things like tiles, cabinets, countertops, appliances, etc. - and these can vary wildly in cost.
 

Say you choose a Sub-Zero refrigerator over a GE.  The markup on a $10,000 refer is a lot more than the markup on a $2500 refer. You should not have to pay a markup on the extra $7,500 you chose to invest in your kitchen – it’s just a refrigerator to the builder.  But he may have to do more work enclosing it – and so he should be paid for his labor time.

One builder we talked to had a good way of handling this.  For the time and materials parts of the job, he provides a straight summary of all labor – who did what, when, who was sick, etc.  He passes through all the things he bought for the job – at their actual price, with receipts.   And then he attaches an overhead amount to the bill – that’s his overhead cost and profit, and it’s based on the value of the labor side, not the material side.  That seemed fair to us.  

How do you work with West-Siders and with Architects?

The last time we built a house, we lived next door.  So our nightly ritual to tour the day’s work with a glass of wine kept us totally up to speed.  But not being in the area will create communication challenges.  Equally important, how well does the builder work with architects?  We need to feel the relationship between them and the builder is going to be professional and productive. 

Most of the high-end homes being built in the area are second homes for people from Western Washington.  We will be living there and running a farm eventually.  So our home has to not only fulfill our dreams for a lovely Modern Mountain home, it also has to be a practical and functional primary residence.  Checking previous work and talking with prior customers helps to flesh out the story behind the pretty pictures on the builder’s website.

Questions about sub-contractors and schedule?

Lastly, we inquired about their ability to start soon, and whether their subs are local.  We want to keep on schedule as much as possible.  Everyone we interviewed was bullish about us being able to celebrate Christmas in the new house, and all predicted quick turnaround times for permits at the County.  As for the subs, we were looking for a builder with long-term relationships, quality work and competitive pricing from his team.

We applied for a building permit and line extension from the PUD last week, and we already have the septic, geotech and water approvals.  We will be getting two bids to review in the next week.  At this point in time, we are shooting for a mid-May start.

Update:  The building permit is final; I'll pick it up next Tuesday.  We hope to make a builder decision this weekend.  Also, further discussion over studios ensued - I'm now sharing space with the guest bedroom ("Guest Bedroom/Home Office/Weaver's Studio"), and Wally's using the Loft ("Artist Studio/Workout/Overflow Guest Sleeping").  It is what it is.

Next Post:  The Empty Nest