What to Ask Luxury Home Builders Before Hiring

Realizing one s dream of owning and living in a luxury home starts with picking a reputable luxury home builder. If only that step was easy, given not only how many options there are but also how many of them are frauds. No matter where you re building your custom dream home, you re bound to encounter the latter in your search.

Take the initiative by asking candidate home builders a series of questions. The good ones aren t afraid to answer them because they re confident that they have nothing to hide from a potential client. Here are a few examples to start with, but don t hesitate to ask as many as possible for peace of mind.

How Many Projects Do You Handle in a Year?

The number of construction projects finished is a key consideration, but not for the reason you may think in this case. For starters, luxury housing projects are synonymous with high-end craftsmanship and timeless elegance, which takes more resources and time to finish than standard ones.

Make no mistake: trustworthy luxury home builders will complete a project on budget and on time. However, one that has fewer but more diverse home designs to show can actually be beneficial. It shows that they take their time designing and building the house based on the client s needs and focus their attention on a couple of projects at a time.

Although no exact figure exists, the U.S. National Association of Home Builders (NAHB) says that custom home builders work on fewer than 10 projects annually. This is different from production home builders, which often work in large-scale urban developments that involve building dozens of cookie-cutter homes. (1)

How Much Can You Do More for Less?

Budget management is a crucial skill for home builders, let alone those who build custom luxury homes. No one wants to be slapped with unexpected expenses throughout the building phase, at least if they can be avoided. Builders should be transparent about the costs of every necessary expense in the project, including unanticipated ones.

Naturally, you can expect to spend a lot more on building your luxury home. According to one estimate, any project that costs over USD$400 per square foot (0.092 square meters) is considered luxury property. Even if some luxury homes fall short of a mansion size-wise, you may still see yourself spending close to USD$1 million. (2)

For this, consider asking the builder if they can do more with the budget you can afford. It would be nice if the builder could supply higher-quality materials while staying within the budget, but just being able to fulfill your specs is okay. They may ask clients to raise their budget, but that won t be an issue provided they give a sound reason.

That said, exercise caution around builders who claim they can complete the project for a significant fraction of the competitors cost. Consumer advocates say such quotes often involve using inferior materials and cutting corners during the building process.

What are My Financing Options?

Luxury custom home builders offer a plethora of payment options, ranging from cash upfront payments to construction loans. They should be able to recommend the ideal financing option for a new home construction based on your ability to pay.

They may also require clients to make a down payment, typically 20% of the project cost. If that isn’t possible, they may require you to take out private mortgage insurance

But no matter the payment option, good home builders never require full payment up front. Spreading the payments out is designed so that builders don t stop the work or vanish with all of the client s money. If they require an upfront payment, make sure to know the reason.

How Reliable Are Your Subcontractors?

As uneasy as the term may make you, subcontractors are crucial to building a luxurious home. Home builders often outsource some parts of the project to specialized services, which is why they maintain close ties with reliable contractors.

A 2020 report by the NAHB stated that constructing single family homes use up to 30 subcontractors. The figure may be higher for custom built homes, given the plethora of features incorporated into their exterior and interior designs. Among the most common outsourced aspects are HVAC, electrical, plumbing, security systems, and masonry work. (3)

As subcontractors work for the home builder, clients typically can t choose their preferred subcontractor. However, the builder can be held liable for a subcontractor s shortfalls and errors. As such, addressing clients concerns regarding a subcontractor is within a luxury home builder s responsibilities.

Key Takeaways

These questions are by no means the only ones worth asking a luxury home builder. You ll soon come up with others as you study more prospects, none of which should dissuade a reputable builder from answering truthfully.