Building a custom home feels like a dream come true, but you must make sure every aspect of your contract is clear and straightforward. A well-structured contract protects you and your builder and ensures peace of mind throughout the construction journey. However, not all contracts are created equal, and there are a few red flags you should try to spot before signing.
In this guide, we’ll walk you through five common red flags to watch out for in custom home building contracts, helping you stay informed from the start.
1. Vague Language
One of the biggest red flags in any contract is the use of vague or ambiguous language. Terms like “best efforts” or “as needed” can leave too much open to interpretation, which could lead to disputes later on. A solid contract should be crystal clear about the scope of work, timelines, and responsibilities. If something isn’t clearly defined, it could give the builder too much leeway or leave you unprotected if issues arise. Always make sure every detail is spelled out in black and white to avoid misunderstandings down the road.
2. Unclear Payment Terms
Another red flag is when the payment terms aren’t clearly outlined. If the contract requires a large upfront payment without any ties to specific milestones, this could indicate trouble. Payment schedules should be fair, with installments tied to completed stages of the project, such as foundation work, framing, and finishing. This ensures that both parties remain accountable throughout the build. Be wary of any unusual payment structures that don’t seem standard for the industry.
3. No Provision for Change Orders
Changes are inevitable during a custom home build, whether it’s due to personal preferences or unexpected issues. If the contract doesn’t specify how change orders will be handled, this could lead to confusion or disputes down the line. A good contract will outline a clear process for submitting, approving, and paying for changes. Make sure both the timeline and associated costs for change orders are discussed upfront to prevent headaches during construction.
4. Lack of Insurance Information
A big red flag is if your contract doesn’t include specific details about the builder’s insurance coverage. Without this information, you could be left vulnerable if there’s an accident on the job site or if property damage occurs. Always ensure that the builder has sufficient liability and worker’s compensation insurance in place before the project begins. This protects both you and the builder from unforeseen incidents.
5. Missing Warranties and Guarantees
A reputable builder should stand behind their work and offer guarantees on the construction itself, materials used, and any major systems installed in the home. If a contract doesn’t mention these protections, it could be a sign that the builder is cutting corners. Make sure there’s a section outlining what’s covered under warranty, how long the warranty lasts, and what’s excluded.
Protect Yourself with a Clear Contract: Choose Tucker Homes
At Tucker Homes, we believe in transparency and trust. A well-drafted contract is the foundation of a successful custom home project, and we ensure every detail is clearly laid out to protect your interests. If you’re planning to build your dream home, get in touch with our team today. We’ll guide you through the process and make sure your contract works for you from start to finish.
