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Eliminate Surprises by Clearly Defining the Job - The "Big 3" Documents!
Building a new home is one of the most important investments a family will make. In many cases it represents their single largest financial investment. The home is designed and built to provide years of pleasure, comfort, and security. It is the physical manifestation of "family" and the place where celebration and joy are expressed and experienced.
No wonder that when it comes to building a home, no one likes surprises. The "Big 3" Documents that spell out the details and help set expectations for both builder and client are the Construction Contract, Construction Plans (Blueprints), and the Specifications. These 3 documents are the roadmap that define the destination, describe the details of how the project will proceed, and steers everyone clear of obstructions and delays.
They are designed to protect both builder and client, and clarify everything about the job. It is organized into a number of sections, including information about the project location (address, lot number, etc.), permits, contractor insurance and licensing, materials, finishes, allowances, project timetables, and payment schedules.
While all of these details are important, most builders find that if conflicts arise during construction, they're usually caused by misunderstanding over the "who, what, and how" of the job. Effective documentation works to clarify these issues.
Who makes the decisions?
One very short but important section names the owner’s representative. This should be one person -- for instance the husband or wife, but not both -- who will act as the builder's main contact for approvals, changes, and questions. Having one owner as the representative helps eliminate confusion and makes communication more efficient. Similarly, the language should define who on the builder's team can sign off on changes -- whether it's the company owner or the owner plus the site manager or superintendent.
What, exactly, is the client buying?
The project description defines exactly what the homeowners will be getting for their investment. The more detail the better. Most Construction contracts accomplish this by referencing the project plans and specifications.
The plans are the visual description of the new home, and include floor plans, elevation drawings, and all electrical and mechanical systems. They should note who prepared them and when they were signed. The plans should include all necessary changes -- for instance, from the building department and the Home Owner’s Association that are made prior to commencement of construction.
The specifications, or "specs," are the written description of what will be done. They list all items that will be installed in the home: Windows, Doors, Roofing, & Insulation, the type of furnaces, and water heaters; the brands and type of paint, and Allowance $ amounts included in the construction contract for items such as Kitchen Appliances, Plumbing Fixtures, and Lighting. The project price is based in part on the specs, so clients should study these carefully to confirm that they understand what they are getting before signing the contract.
How will allowances be allocated?
How will allowances be allocated and calculated? It's important that both be crystal clear. Allowances cover parts of the job that haven't been fully specified yet, such as when the homeowner has yet to decide on types of flooring or faucet fixtures. There should be a date specified when the decision is needed.
The contract should also clearly explain the builder's change-order policy, who can sign off on changes (the owner and builder reps), and the administrative cost for preparing change orders. It's in everyone's best interest for even small changes to be documented in writing.
A contract that clearly defines the who, what, and how of the job steers the project clear of the most common minefields. This will help ensure that the homeowners get the home they want, on the timetable and for the price they were expecting.
 Warm Regards,
Adam Sanchez
Diamante Custom Homes
5139 N. Loop 1604 West, Suite 102
San Antonio, TX 78249
(210) 341-6430 - phone
(210) 568-4514 - fax
www.diamantehomes.com
dchinfo@diamantehomes.com
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