Questions to Ask Before You Sign a Builder Contract

The last moment you have leverage

Before you sign, you are a prospect. After you sign, you are a project.

That is not cynicism about builders — most are straightforward people doing difficult work. It is just the structure of the thing. Every question is easier to ask, and every answer easier to change, before signature.

This guide is not legal advice, and a construction attorney reviewing your contract is money well spent. What follows is what to understand before you get there, so that the hour you pay for is spent on the things that matter.

What is actually included

Nearly every dispute in residential construction traces back to a difference between what the owner assumed and what the contract said.

• Standard inclusions. Get the specification in writing — what grade of window, what flooring, what fixtures, what appliances. “Builder standard” is not a specification.
• Allowances. An allowance is a placeholder budget for something not yet chosen. If the allowance for lighting is four thousand dollars and you have a twelve thousand dollar taste, the difference is yours. Ask what each allowance is based on, and ask to see a real example of what it buys.
• What is excluded. Landscaping, window coverings, appliances, driveways, and utility connections are common exclusions. Ask directly what is not in the number.

Change orders

Changes will happen. The question is what happens when they do.

• How is a change priced — cost plus a markup, or a quoted lump sum?
• What is the markup percentage, and does it apply to credits as well as additions?
• Who has to approve a change in writing before work proceeds?
• How does a change affect the schedule, and is that stated in the change order?

The last one is where people get hurt. A change that adds three weeks and does not say so becomes an argument later.

The payment schedule

Money should follow work, not lead it too far.

• What triggers each payment — a date, or a completed milestone?
• Is there retainage held back until completion?
• What happens if a milestone is missed?
• How does the schedule interact with your construction loan draws, if you have one?

Ask your lender and your builder to look at the schedule together before you sign. They have to agree, and it is much easier to discover a mismatch now.

The warranty

• What is covered, and for how long — separately for workmanship, systems, and structure?
• How do you report a problem after move-in, and what is the response commitment?
• What voids it?
• Is the warranty backed by the builder alone, or by a third party?

Ask what happens if the company ceases to exist. It is an uncomfortable question and the answer is informative.

Schedule and milestones

• What is the expected completion date, and what does the contract say happens if it slips?
• Which delays are excused, and which are not?
• What are the major milestones, and will you get a schedule you can actually see?

How decisions will reach you

This is the question almost nobody asks, and it shapes the entire experience of building.

• Who is your single point of contact, and what happens when they are on vacation?
• How far in advance will you be told about a selection deadline?
• How are decisions communicated and recorded — email, a portal, a conversation on site?
• What happens if you cannot be reached in time?

The failure mode is not malice. It is a decision needed on Tuesday that reaches you on Tuesday.

References worth actually calling

Ask for recent clients with projects like yours — similar size, similar budget, ideally finished in the last year or two.

Then ask them the questions that surface real information:

• What surprised you about the process?
• How were problems handled when they came up?
• Did they come back after move-in when something needed fixing?
• Would you use them again, and what would you do differently?

Ask to walk a home under construction as well as a finished one. Finished homes are marketing. A job site in progress tells you how a company actually works.

Your own preparation

Two things are your responsibility rather than the builder's, and both belong in place before you sign.

• A contingency reserve. Set aside funds for unforeseen conditions and your own changes of mind. Most projects use it. Deciding the number in advance keeps a surprise from becoming a crisis.
• A place to keep everything. Contracts, revisions, permits, selections, receipts, warranties, and photographs. Somewhere organized, backed up, and not solely on the site superintendent's phone.

What to keep from this stage

Before the first shovel, you should have and be able to find:

• The signed agreement and every revision
• The full specification and every allowance figure
• The payment schedule
• The warranty document
• Your builder interview notes and reference calls
• The project schedule with its milestone dates

If you cannot put your hands on those six things quickly, the rest of the build will be harder than it needs to be.