Types of Home Builders: Production, Semi-Custom, or Custom?

    When it comes to building a new home, there are different kinds of builders. And the builder you need depends on what you're looking for in the finished product and what you're looking for in the process.

    Here's an overview of the different types of builders and what to expect.

    Production Builder

    A production builder is good if you want to live in a neighborhood, you want a house built sooner rather than later, and your budget is tight. In most cases, you're also not looking for a home you plan to live in forever.

    Production builders only build in developed neighborhoods. They may be the ones developing the ground or they may buy a few lots from a developer alongside other builders in the same price range. They build from several different house plans with a few standard options, but they don't customize a house plan for each customer.

    While there isn't a lot of flexibility in design or options, the fact that they're building the same few house plans in close proximity gives the builder an efficiency that keeps costs down. You also have the opportunity to buy existing inventory, either a completed home or one still under construction, which can save time.

    If you don't want to make a bunch of decisions about your home, then a production builder is a good choice. Here are a few things to look for when searching for a good production builder:

    1. Neat and tidy job sites.
    2. Employees running the job sites drive clean cars or pickups (not the subcontractors working on the job, but the builder's employees).
    3. Visible recent activity on the job sites rather than jobs sitting for weeks with no progress.
    4. Not much building waste lying around, such as lumber, drywall scraps, or insulation.

    Semi-Custom Builder

    A semi-custom builder is good if you want to live in a neighborhood or you want to live on your own land not far from town. It's also a good choice if you're not in a huge hurry and don't need a highly customized house plan, but you would like to make a few modifications to fit your need.

    This type of builder works from a portfolio of plans and will customize a house plan for each customer. They don't design from scratch, nor do they build a house from a plan the customer provides.

    They'll be able to quote you a price per square foot because they know the house plans in their portfolio and have a good idea from past experience what each one will cost to build. But that means each change to the plan comes with uncertainty for the builder and added cost for you. You'll have lots of flexibility in color and material selections as long as you stay within the options they're used to providing.

    With semi-custom homes, the builder might provide the construction financing, which means he will build the house and sell it to you when it's finished, or you might be asked to provide the construction loan. They might have some inventory you can view or even buy, either finished homes or some still under construction. Ask if you can walk through any existing homes in their inventory to get a feel for a particular plan.

    If you're leaning toward a semi-custom home builder, here are a few things to look for as you choose a builder:

    1. All the things we mentioned above in the production builder section, with the understanding that a semi-custom builder might have longer delays between construction phases. This could be because he's using a core group of contractors that know him well and do what's expected.
    2. The owner of the company might be the one running the jobs, which is fine as long as he's not trying to run too many. He or she may also have a field superintendent running each job.
    3. Watch out for lots of waste, as inefficient control of materials can drive up cost and increase your price.

    Custom Builder

    If you own your own land, plan to buy your own land, or have very specific needs and wants in a new home, then a custom builder is right for you. They can build pretty much any house plan—one they design from scratch for you, one that combines the best of several plans you like, or one that you bring to them.

    Using a custom builder means lots of flexibility in design, features, and materials. The only limitations are the methods common to residential construction, such as the materials used for walls, veneer, windows, and doors.

    You might be able to bring some of your own materials and/or fixtures, such as custom lighting, high-end or very specific appliances, and even pieces of stone or other natural materials that aren't easily reproduced.

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    With a custom builder, you'll spend more time in the design and selection phases determining all the details. With this approach, you provide the construction financing in the form of a construction loan since the home is specific to you.

    Custom homes generally take longer to builder because everything about it is a prototype. It's never been built, so some unique problems will need to be solved during construction. You'll have more flexibility to make changes during construction, but those changes cost both time and money.

    With a custom build, you'll invest much more time and energy in the building process. There are more decisions to make, and you'll naturally want to be more involved in every phase of construction. Because it is your vision coming to life, you'll feel a greater sense of connection to the home from start to finish.

    Here are a few things to keep in mind when choosing a custom builder:

    • Many of the same things apply as with other builders, such as neat and tidy job sites, employees driving well-maintained vehicles, and not a lot of waste lying around the job site.
    • Progress on the custom builder's job sites will be slower than either the production or the semi-custom builder. This stems from several sources, including longer lead times on custom materials and waiting for specialty contractors that the builder doesn't use on every job.

    For the best possible home building experience, decide which kind of buyer you are and look for the type of builder that fits you best. Matching your needs with the builder's process will make for a much more pleasant experience all around.

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