As a first time buyer and hearing stories about builders walking away from unfinished projects and bankrupt, what is the best way to select a builder?

Asked by monk, Troutdale, OR Sun Jan 30, 2011

I would like to know how you can make sure a builder is reputable, and is not going to cut corners, and not overcharge me for building my first home? Also, is there a rule of thumb as to how much I can expect to pay
(per sq ft) depending on options selected? Is it better to buy a lot before I select a builder, or buy a lot in a builder's subdivision?

Help the community by answering this question:

+ web reference
Web reference:


Kim Noonan, Agent, New Lenox, IL
Sun Jan 30, 2011
Drive around in areas where you would like to live, and look for homes that appear to have been recently built. Try a Saturday or Sunday. Approach the homeowners, and ask if they recently built their home, who their builder was, and if they would recommend that builder or build with him/her again.

Check with the BBB in your area to see if a builder has complaints or a track record on file.

In my area, public records are available. You can find many bits of information, including if the builder has filed for bankruptcy, is being sued by anyone, is in foreclosure on any properties, has a valid business and/or construction license. Find out if you have access to that info in your area.

If you find builders that seem to be reputable and are building a product that you like, ask them for references of homes recently built, and then talk to those homeowners.

Since this is your first home, you might also want to consider getting someone else on your "team", wheter it be an attorney, home inspector, and/or a Realtor.

Some builders will not sell you a lot in their subdivision outright, but require you to build with them. If you want to buy your own lot first, then select a builder, you should make sure your lender will permit this (unless you're paying cash outright for the land) . You'll also want to determine if you want to obtain a construction loan, or if you can, and look into the fees and terms relating to them.
Web Reference:
0 votes
Chuck Simpson, Agent, Gresham, OR
Mon Oct 31, 2011
Find a broker that is working with new home sales. They will have good idea of who is doing well, and who is on shaky ground.
Feel free to contact me, I am currently helping two buyers, purchase their new home. You and I would work with the builder through the whole process from planning to the occupancy inspection.
I love my job!
0 votes
Jon Cole, , Oregon
Mon Feb 21, 2011
References. Call and or go visit with the builder's past clients. If you need a representative between you and the builder you have selected the wrong builder. The reason contracts and specifications are so detailed is to avoid any misunderstandings. If in doubt - write it out.
You can only get $/SF numbers to become meaningful after you get more detailed about what you want to build.
If you are worried about getting left holding the bag, insist on joint checks to the suppliers and subcontractors. Many lenders require either joint checks or a check exchange - builder submits checks made out to the suppliers and subs for each line item the draw for and the bank then cuts the progress check. If you have the builder get a bond guess who pays for it? ( the buyer)
0 votes
Ashlee Mulle…, , Gresham, OR
Tue Feb 15, 2011
I believe that there are no guarantees as to whether a builder can complete the project or not. But what you can do is make sure that the builder provides a bond in the amount of the estimated cost to complete your home. Which is what we always provide. The bond assures that your home will be completed in the event the builder you hired is unable too and that there will be enough funds to complete it. As far as cutting corners, I recommend that you thoroughly understand the nature of the project and do periodic on site inspections. Find out when the city or county inspectors will be on site for their inspections and be present. Ask intelligent questions, take photos, but stay out of the way as best as you can and never ever tell the subcontractors how to do their jobs better! Discuss your concerns with the general contractor and him only, as soon as possible if you don't like what you are seeing. What you can do is get comparable costs/sq ft from several builders. Remember the cheapest is not necessarily the best. During these times prices are negotiable but don't be insulting. Everybody has to eat and provide for their families and run their business.
If you would like a bid please don't hesitate to call us.

JR Coto, Business Manager
Property Quest LLC/Coto Construction LLC
707 NE 151st Ave
Portland OR 97230
503-261-9167 Office
503-252-4962 Fax
503-278-0110 Direct
CCB 153329/ORMWESB 6655
0 votes
scott farmer, Agent, Scottsdale, AZ
Mon Jan 31, 2011
As a former new home sales associate for a new home builder that went belly-up - hire a realtor to represent you as a buyers agent! I cannot stress this enough. An agent should be able to help guide you and be your advocate to protect your interests. A buyer's agent has a fiduciary duty to their client.

Stick to builders that are national and even publicly traded on the stock exchange and you should have better success in getting a completed home in a completed subdivision. You can also purchase a spec home for quicker move-in.

Good luck in your pursuits!

Sandy Farmer
Realtor, GRI, CSSN
John Hall & Associates
Web Reference:
0 votes
The Stephen…, Agent, Portland, OR
Mon Jan 31, 2011
If you are building in a lot you own (or purchase) - I've got dozens of recommendations. There are a number of reputable builders that have been in the business here in Portland for decades.

If you are buying a lot in a builders subdivision, let me know who it is. Also, it is good to check the public information like the others have mentioned.
0 votes
Wallace Ashby, Agent, Bend, OR
Sun Jan 30, 2011
Kim has given you a lot of good advice. Talking with someone in the industry, like a local realtor can help you more quickly uncover reputable builders. Checking the local contractor board for complaints is always a good start. My advice would be the same as kim and team up with a professional. Buyers agents work are free to buyers as the seller traditionally pays them at the time of sale. If you have any more questions, you can call me at 503-888-0585
0 votes
Search Advice
Ask our community a question

Email me when…

Learn more