The Great Debate: Small vs Larger Builder

You’re about to invest in the single most expensive purchase you will likely make in your entire lifetime – building a custom home – and the marketplace is full of willing builders bidding for your business. So who and how do you choose? These are critical questions as the builder that you ultimately choose could very well end up determining the success or failure of this venture.

Other than that… no pressure!

So hypothetically, let’s say that it comes down to two builders on your list from which to choose: One is a small builder constructing somewhere between 3-5 homes per year, the other is a larger builder constructing in excess of 25-30 homes per year. How do you choose the one that is right for you?

THE CASE FOR CHOOSING THE SMALL BUILDER:

The smaller builder will make the case that since he builds “less” homes per year, your house will be proportionately “more” important to him than it will be to the larger builder. The idea is, “choose me because I will give you more attention than the larger builder; choose me because I care more.”

As well, he argues, he will be the one who is actually building the house and therefore he will be more in touch with what is going on during the course of the build, and since it’s his name on the line, the craftsmanship (so the logic goes) is sure to be better.

Added to this, he is the owner and should any problems arise, you will be able to contact him directly. For the smaller builder, he believes that you will have more attention and better customer service by building with him because it’s his name and reputation that is on the line.

LET’S TALK ABOUT THE COMPLEXITY OF BUILDING:

Speak to anyone who has ever gone through the process of building a custom home and you will hear numerous stories of the struggles and difficulties that seemingly were present from start to finish.

Building a custom home is difficult because it is so complex. Did you know that there are well over 200,000 parts and pieces that go into the construction of a new home? THAT’S a lot of details to get right! That’s a lot of choices to make. That’s a lot of materials to purchase. That’s a lot of communication between buyer and builder to be had in order to get it all right!

Ultimately, that’s a lot of opportunities for mistakes, delays and miscommunication leading to costly overruns.

THE CASE FOR THE LARGER BUILDER:

In making the case for the larger builder, it really comes back to that idea of complexity. With so much money riding on the line and so many decisions to make, materials to purchase, supervision to be had… doesn’t it make sense that a larger builder would have more resources and better processes to make such a complex venture go more smoothly and cost effectively??

For instance, in order for your new home to be constructed, the following areas/ responsibilities must occur:

Plan Development: This stage is where the architect sends your plans through the necessary engineering phases in order to obtain the “permit to build.” During this phase of the build, you should have a personal plan development manager to oversee all of the communication that takes place with your plans between the architect and engineering (foundation, framing, trusses, HVAC, electrical, plumbing, etc). It’s an enormous process and demands full attention. The larger builder has such a person… the smaller builder just sits and waits for it to occur regardless of how long it takes.

Project Management: You should have a fulltime project manager who is aware of each stage of the above processes and orchestrates each of them by being the squeaky wheel on your behalf. As well, as plan development is occurring, your plan development manager will be scheduling all of your design center appointments for you so all of your interior and exterior choices can be made and your project does not get delayed.

Interior Designer: With so many decisions to make and so much money at stake, wouldn’t it be comforting to know that you could have an award-winning interior designer with you while you’re making your selections: color choices, granite, backsplash, flooring, lighting, appliances, etc. And how nice to know you would have a qualified professional walking with you through this entire process! The larger builder has such a professional on staff.

Purchasing Department: With so much material and labor invested into the construction of your new home, your overall price will be tied directly to the builder’s ability to negotiate and track all the expenses of the build. The larger builder has purchasing agents on staff enabling him to put everything “out to bid,” saving you tens of thousands of dollars throughout the course of your build.

Accounting Department: One of the most critical elements of building a new home is having a purchase order system that is checked to the penny against invoicing. It is not unusual for a trade to bid one price and mistakenly bill another – and if this is missed, you the homeowner will be the one who loses via cost overruns.

Construction Managers: It is not enough to have a qualified “builder” of your home – without a site manager to oversee the build, coordinate the trades and provide quality control, your build stands a good chance of being delayed and/or experiencing costly overruns.

Multiple Owners: In most cases, the difference between a small custom homebuilder and a larger building firm, is that the larger firm has two or more owners available to engage in any challenges that may arise during the course of your build. If the smaller builder is building three homes and has a problem with one of them, your build will sit silent while the problematic build gets all the attention. With the larger builder, owners are free to float to problem areas, ensuring that all homes continue construction as scheduled.

THE SUM OF IT ALL:

Years ago, Steve Neary (CEO/President, Copperleaf Homes) was that small custom homebuilder. Looking back on those days Neary says, “I just didn’t know what I didn’t know… I had no idea what processes needed to be in place in order to present the buyer with the best and most economical homebuilding experience.”

What Neary is addressing is the reality of where the small homebuilder comes up short: No one person can effectively wear all of the hats required in building a custom home AND bring it in at the lowest price per square foot with the highest level of included features as demanded by today’s homebuyer.

Custom homebuilding demands a high level of service and communication. And with a larger builder comes the number of specialists needed to cover all of the issues that are sure to arise.

In the end, both the smaller and larger homebuilder will build a good quality custom home… but the difference in the experience between the two will be worlds, and perhaps