From building a new, custom home to a small renovation on an existing home, the residential construction industry is going through some turbulent times. Most custom home builders in Arlington will be upfront about the situation and set reasonable expectations for the homeowner about key aspects of the project that might be impacted. Unfortunately, not all contractors put customer service and transparency first. To avoid a nightmare residential construction scenario, homeowners need to take some important steps to protect themselves.

What’s Causing the Industry Turmoil?

Three factors are impacting custom home builders in the Arlington area. First, the supply chain challenges that are all over the news have impacted the amount of time it takes to complete a project, and they have caused up to a 300% increase in material costs. Second, there is a severe shortage of trained construction workers. Finally, the white-hot real estate market in Northern Virginia has led to a surge in construction and renovation projects. 

As a result of this upheaval, not only are contractors in high demand, there have been major impacts on the pricing and timing of projects. With the escalating prices, contractors are finding that their bids can quickly become outdated as prices for materials and labor continue to increase, leading to a reduction or even elimination of their profit on a job. Homeowners who hired a contractor are finding themselves in a bind as some contractors drop existing customers in pursuit of more money. These contractors are claiming that they don’t have time to work on the project, leaving the homeowner high and dry, often with a deposit that is effectively lost. If money and resources are this much of an issue for these contractors, chances are the homeowner has no way of getting the money back, since the contactor probably has spent the deposit and has no way to pay the homeowner back.

Protect Yourself when Working with Custom Home Builders

1) Only work with a licensed contractor. Virginia contractors who obtain these two, crucial protections for their clients may be more expensive than “Chuck with a Truck,” but if things go wrong, a homeowner has a chance of getting some reimbursement through the bonding.

2) Get the contract in writing. Many contractors try to do business with a handshake, but this leaves the homeowner highly exposed. A written contract will spell out the expectations on both sides and avoid unexpected changes down the line. The contract should include timing and legal options in the event of trouble. 

3) Avoid “lump sum” bids. A lump sum bid from a contractor gives you little or no idea what the costs are going towards in the contract. It places the homeowner at a disadvantage when the contractor abruptly changes the terms. A bid that gives line-item pricing for labor and materials means no surprises. 

4) Talk to several contractors. Even if you feel comfortable with one contractor, it’s important to be certain that you are getting the right fit for the job. Different contractors may have different approaches, and you should be aware of your options before proceeding with the first contractor to bid on the project.

5) Tie payments to deliverables. Often, residential construction contracts call for payment on the basis of time or a vague “percentage complete.” Specific phases of the project can trigger payment so that you know what you are paying for. 

6) Get proof of payment to suppliers. Before making payment on a completed phase, or making a final payout, make sure your contractor has paid their suppliers. 

When investing in your home, you need to be able to rely on your contractor to deliver as promised. Taking steps to make sure the promise is clear and enforceable is the best way to make sure you don’t get stood up. 

At Alair Homes, we believe in transparency and customer service. We deliver detailed, itemized contracts that allow our customers to know what they are getting so that they can rely on us to deliver as promised. If you are looking for a custom home builder in Arlington, contact us for a consultation.