When building a custom home, one of the main benefits is getting to select who you work with. Ultimately, you want a trusted builder as you make one of the largest investment of your life. But where do you start and how do you go about making a selection?
Identifying potential builders will take some work in order to come up with an initial list and then narrowing down to a few companies to scope out in further detail. We think the research can be focused on three main sources or categories:
Firstly, you would want to begin your online research by finding builders with construction projects in your desired neighborhood. But instead of clicking on the many individual company websites, you want to focus your search on sources that have done some due diligence for you. There are websites and organizations in every area that will be great for identifying potential companies. For our area in Toronto, we recommend:
The first three sites will give you a pretty good overview of potential builders to select from. However, this list maybe overwhelming if you live in a big city like Toronto. Homestars and Houzz will also return a big list, but offer some advantages because you get to see ratings and reviews from previous customers. These may all be great resources when you're starting out completely fresh and maybe you're new to the area you're looking to build in.
Essentially, market research would reveal how well newly built homes are doing on the market before they sell. Watching out for what goes on in your desired neighborhood and what homes actually sell for is incredibly important. But when looking for a builder, it's equally important to understand who is building there.
Hitting the streets walking or driving through your neighborhood and looking for those building permits and construction fences will give you a pretty good clue about some of the companies currently active in building homes right where you're looking. Don't be shy about looking them up and contacting them directly!
The other main task is to check for listings of new home sales and pre-construction sales. Looking at the properties and contacting the selling agents will reveal who the builders behind the listings are. Now, we're not saying that you should go and buy one of those listed properties, even though you could, but you want to know the builders first.
Many home builders don't want to wait until their completion date to find a buyer. They are very motivated to make a committed deal early on, so knowing your market is a really good way of getting in touch with your future builder!
For most cities, you can search new building permits online on the municipal website and get a good overview of the general activity in your desired neighborhood.
Referrals can come in many ways, but we would classify them into professional referrals and personal referrals.
Professional referrals could come from your real estate agent, a contractor you are working with or have in the past, home inspectors, city inspectors, architects --- basically anyone in the real estate or custom home construction industries.
Personal referrals are your family, friends, neighbors and co-workers. They may have gone through the same process as you or know of people in the industry and are generally curious and willing to help you out.
It doesn't matter from where the referrals come, we strongly recommend you listen only to the sources you trust and still do your own due diligence!
Based on all the research you have done to this point, you should be able to come up with a shortlist of builders that you may want to work with. Now it's time to vet them some more...
The Selection Process
There are several topics you want to cover during your vetting process. Some will require an in-person conversation, others you can check into yourself. Here is our recommended list of questions to ask:
Is the builder licensed in your area? Are they part of an an industry association (like the ones named above)?
Are they registered under Tarion (or equivalent in your region) and are there any known claims?
What is their reputation?
Do they provide you with references of past builds that you can go to and past customers that you can (and must!) talk to?
What do you know about their business? How long have they been operating? What is their financial status? Who are the owners and who are their investors or lenders?
To what extent will they allow you to influence the home specifications?
What kind of warranty do they provide?
Do you feel they listen to your needs as a customer and give you a realistic picture of the challenges, timelines and cost (or do they just want to make a sale)?
Do they give you a detailed estimate?
Who will actually manage the construction and what's their plan on keeping you up to date, select finishes, etc.?
Do you connect well with them personally?
Answers to all of the above will give you a really good idea where you stand and who to select. This list is by no means exhaustive and it doesn't mean that the builder has to check out on top on all of them. On the flipside however, there may be some answers that come back as red flags and that's a good indication to keep on looking...
At the end of the day, you want to work with someone you can trust, that listens to you and addresses all of your questions. It is a business partnership, but you want to make sure it is a good one and that you can treat each other fairly through changes and obstacles down the road.
How did this work for us?
We were definitely looking for awhile, at times more actively than others. For sure, we kept a close eye on the local market activities and also tried to contact companies directly. Eventually, we found our builder by visiting an open house of one of their projects that was for sale. While that house was not for us, the agent present at the open house put us in touch with the builder directly and we had a conversation about a week later. In the meantime, we did our due diligence and the rest came down to figuring out that we were a good fit for each other and finding the right deal. It may be of interest to know that we first decided to proceed with our builder, before having settled on the final lot. Since they are very active in our neighborhood, we knew that the right lot would come up and we would be off to the races.
The builder we are working with is Midnight Building Corp. They checked off all the right boxes for us and we're excited to work with them to build one of the first certified Passive Houses in Toronto. Feel free to browse Midnight's collection of custom built homes at midnightbuilding.com.
P.S. Our blog has been featured on the Top 25 Toronto Real Estate Blogs and Websites in 2020 by Feedspot.