Real Estate

Woulda, coulda, shoulda: How to avoid homebuilding mistakes

‘More goes wrong out there than goes right. You want to ask the right questions.’ Tell us: What advice would you give people looking to build a home?

By Cameron Sperance -- Boston.com correspondent

July 12, 2023

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Know your budget and do your homework when it comes to building a team to build your home.

It may save you a therapy bill.

Buying a home is stressful enough, but building one from the ground up can be a blessing — you have control before the first shovel hits the ground — and a curse — did the builder run off with your money?

“The largest investment you will make in a lifetime is your single-family home,” said Cindy Stumpo, CEO of luxury builder C. Stumpo Development. “More goes wrong out there than goes right. You want to ask the right questions.”

References

Ask prospective builders for at least 20 client references to show their knowledge of the industry, Stumpo recommended. Make sure the builders were excellent to work with and addressed any issues that arose during the three-year implied warranty of habitability, which is required under Massachusetts law.

Vendor references are also helpful.

“If the guy’s jumping around and there’s no consistency to where he buys his materials, that shows red flags,” Stumpo said. “Do not give anybody a third [of the total cost] upfront. How many of those people cash your check and don’t come back?”

Budgeting and payments

Once you select a contractor, clear communication and self-awareness of your budget are vital to making the working relationship a success.

In a worst-case scenario, if you pay your builder a hefty sum upfront for all the vendors, and the builder doesn’t pay them, you are on the hook. Instead, Stumpo recommended micromanaging payments throughout the building process and getting notarized lien releases that show you vendors are getting paid.

From the start, be confident in your design preferences and layouts to avoid blowing past your budget with mid-process changes.

“I’ve had clients that wanted to change things where we had to go in with chainsaws and basically cut things apart,” said Howard “Chip” Hall, owner of the Maine-based home development firm Cottage Advisors.

Everyone interviewed for this story emphasized that a construction budget can make or break a project. Don’t give a builder an aspirational figure you can’t afford to pay. Now is not the time to keep up with the Joneses.

“One of the biggest mistakes people make is looking at home shows and getting an unrealistic expectation on schedule and cost,” said David Bushnell, construction supervisor for the design and build arm of Cape Cod-based Architectural Design Inc. “People are dishonest about their budget because they’re hoping to get more for themselves or swindle it. When they do, that causes confusion.”

The cost of building materials fell for the second straight month in May, according to the latest inflationary figures from the US Bureau of Labor Statistics. While that’s good news for people building a home, the rosy outlook will probably be short-lived. Canada’s wildfire season is crippling the country’s forestry industry and driving up lumber prices, Reuters reported in June. Being budget conscious (and honest) with your builder is going to be as important as ever heading into the fall.

Budget for problems

Experts said it’s best to pad your budget to account for inevitable cost overruns. It’s not unheard of for projects to go up to 20 percent over budget, given volatile material costs and other unforeseen issues that arise during the homebuilding process.

“I always tell people to have a contingency for things that you have to pay for that are not by choice and then have a budget for things that are just for yourself because you may want to make some upgrades,” said Susan Kadilak, secretary/treasurer of the Home Builders & Remodelers Association of Massachusetts and broker/owner of Kadilak Realty Group in Burlington.

“Lumber yards won’t hold quotes for three or four months like they used to,” Kadilak said.

But savvy homeowners-to-be can save money amid higher lumber costs if they ask the right questions.

Standard building practices in New England entail wood framing with studs every 16 inches, said Greg Procopio, an executive vice president with developer Procopio Cos. But it’s common to find frames with studs every 20 or 24 inches in other parts of the country, which cuts down on lumber needs and costs.

“Talk through the actual structural package with the builder, because they’re overdoing a lot,” Procopio said. “They send their drawings to a lumberyard, and the lumberyard gets to size everything. Well, the lumberyard is chasing a sale there. Of course, they’re going to size things in a certain way that makes that package a little bit better.”

But Stumpo warned consumers not to trim costs on things not visible to the eye.

“The stuff that you don’t see is the most important: your site work, your drainage, the stone underneath your basement slab,” Stumpo said. “You have to remember there’s the engine. If the car looks like a Ferrari, but it has a Honda engine, it’s still a Honda.”

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