Ask how long they have been in business. Run from anyone who hasn’t been in business for at least ten years or who went bankrupt during the recession and then reopened

Thanks to you both. One of the issues I'm having is finding available lots and builders in a given area. For example, if I do a search in a town for available lots, only a couple of lots show up. However, there are tons of new subdivisions going in in this town. When I do a search for a given subdivision it looks like multiple builders are building. If I contact the website for the subdivision I usually get a response from a real estate agent wanting to send me listing unrelated to the subdivision (and prebuilt homes). It's all very confusing and I am having a hard time making any progress, Any suggestions?

A lot of subdividions come about because a builder has purchased the dirt in the entire subdivision. Their profit comes from selling you a fully-built house. Sometimes it's a turnkey operation, sometimes you can buy when it's a piece of dirt or partially finished and choose options from their limited selection etc. A lot of times they won't sell through realtors, they want you to buy the house directly from them. Those listings often won't appear as "land" listings in the MLS. Sometimes you'll hear people refer to this as buying a "tract home."

Alternatively, you could buy a piece of dirt yourself and find an architect and/or builder for it. A lot of times people will call this "custom building," as opposed to buying into a subdivision.

Are you looking to have a CUSTOM home built on your lot or are you looking to buy a new build home where you make a few finish selections on a lot in a subdivision? These are two different things. It's rare for the developer of subdivisions to allow a custom home to be built; instead you have to select from among pre-approved plans from builders that the developer has selected for the subdivision. If you want a true custom home, you likely won't be in a subdivision.

I want to know about issues such as quality/thickness/origination of drywall; flooring/subflooring, cabinetry manufacturer, porcelain/ceramic tile quality, etc. Ask for the credentials of his tile setter, flooring people, roof materials (including underlayment, ice guard, and how their roofs are done). Are downspouts putting water at least 10' from foundation, mechanicals, etc. Will you be required to install underground sprinkler systems and sod within so many days of closing? What are the HOA requirements/restrictions, if applicable? Unfortunately, some builders or their agents fail to disclose these things up front. I've known some to become quite agitated when you start inquiring about upgrades... The amount of money you're investing does not purchase what it used to, so perform your own research before signing.

Thanks for all the responses! Ideally we would probably prefer to go custom (buy a lot outside a developed subdivision) but like I said I don't see any suitable lots in the town/school district we are looking at and I don't think a custom home would fit within our price range. We are definitely not opposed to going the "pre-approved plan from builders that the developer has selected for the subdivision" route though. This is what we did with our current house (they considered themselves semi-custom). Like I said though, I'm having a hard time finding a good builder (or even contacting them directly).

Are you planning to engage a local architect?

Couple of suggestions since I live in the area look at the Kansas City Parade of Homes listing of the builders and at last years show listings. Some only build in certain regions. Since Kansas City spreads over 100+ miles in most directions you will find many builders available. Don Julian was one of the builders that springs to mind but he may be a little too pricy any more.

Edited to add that in KC you will find that most of the newer subdivisions have multiple builders working in them. Few of the cookie cutter houses all built by the same company except for a few areas. Depending on where you are looking you might look for infill lots.

Thanks! What are "infill lots"?

Infill lots can go by several names but they are lots that have been either been built around and no one selected or where a house or houses have burnt and removed. The can be both in new and older subdivisions but realtors should know where some are located in your desired location. Some may have obvious defects others the lot may not have been a popular size or shape at the time the majority of homes in a subdivision was built. One subdivision north of the river the builder went bankrupt after selling one house. That house is still standing but the other ones that were there no longer exist. It happens also where a builder/lot owner loses control of the properties, as in a divorce or death.

Adding to maifleur's suggestion: you might also want to look for potential tear downs. I don't know if those are common in KC, but in my area (an older, established town with great schools and transportation, but no empty lots) those are common. If you can find a small, older home on a large lot, that might be a possibility (but you may have to compete with custom home builders to buy it.)

An important question:

"Have you done this successfully before?"

You are ahead of yourself in talking to a builder. You’ve got a couple of months of educating yourself about general home building first. You may decide your money goes further to buy existing. Because it does. Go to open houses. Add 30-40% cost differential from a tract subdivision build to do a full custom. Or picture the open house you’re looking at smaller.

Thanks all! Unfortunately it's going to be difficult to go to open houses as we currently live in Illinois. So we are also in the process of looking for new jobs. We have actually been looking at various suburbs and neighborhoods/houses for sale the couple times we have visited and have not found a lot to be honest. Seems every time a decent house goes on the market it's sold within a day or two. This makes it very difficult for out-of-state shoppers.

You need to rent. And unless you have 500K in the bank as cash, you’ll need to wait a couple of years. You aren’t good credit risks to a bank for lending purposes. You have to show job longevity as well as having a substantial pile of cash to put down. Now if one of you can arrange a job transfer, and makes enough to be the loan qualifier, that's a different story.

Looking at the Parade of Homes goes beyond visiting them. As Celadon stated you need to educate yourself while looking for new jobs. By looking at the pictures for things that you both like and dislike and perhaps looking at houses where you live you should come to recognize which builders do a quality product vs. something flashy.

There is also your lack of money to build in this area if you want even a semi-custom because your budget is simply not large enough. You can find existing houses for that price range and make changes but not a new build with custom interiors.

I also agree that you should rent once you find jobs in this area. It will allow you to decide if living here is what you want and need along with does the area suit you and your families lifestyle.

There is also the possibility that the economy may not sustain the current number of workers with the resultant glut of houses.

Thanks all. My wife is a teacher so I highly doubt she will have an issue finding and keeping work. I also have a side business which is growing (and can be done remotely) so I will have a sustained income stream beside my full time job. We have family in KC that we can stay with for a month or two if immediate move in isn't possible this summer. We also have a large dog which makes renting difficult. And like I said earlier semi-custom (making minor tweaks to a pre-existing floor plan) is totally acceptable to us.

First, you need to determine if anyone is willing to take on your project as a custom build. With a budget of $350K to $450K including the lot--and, I assume the cost to design the home-- I suspect your choices of "custom" home builders will be limited.

If you determine there are a number of candidate builders, I recommend you not waste your time and theirs asking about what kind of drywall they use, etc., because you're not purchasing a product. You're purchasing a service.

Focus on the process of building a home. You want to understand how each would take you from design to completion. Ask process-relate questions: how would you approach my project? How do you determine the construction schedule and how do you manage activities to achieve it? How do you determine the construction cost? How do you ensure completion will be on-budget without the "surprises?" How do you manage changes and how do you price change orders? How much on-site supervision is there? How often do you update us on the project and how? What about on-site meetings? You get the picture.

You are a “nobody” in the real estate market unless you have been pre approved (not pre qualified) by a bank/lending company, preferably one in the city you want to live. Right now you are flying by the seat of your pants.

Download this checklist of Things You Must Do Before Hiring a Contractor. It covers a lot of items that people often overlook when engaging with a contractor before they're ready.

freeguide.kickstarthouse.com

@Re:modern Design + Architecture,

The link you provided is for selecting a renovation/remodeling contractor. The required skills and selection criteria for a new home builder are different.

Yeah, new builds are different. After thinking about this post a bit, I put together a longer-form answer here.

Also consider whether you are going to finance the construction or whether your builder will carry the construction cost.

One minor issue we found when we contracted for a custom home (where we owned the lot and were going to finance the construction) was that we had to qualify for the final home purchase total when we got the construction loan. In other words, on the day we got the construction loan we had to be able to qualify for the final completed price of the new home and lot, which was a stretch since we had just moved and my wife hadn't finalized her job contract. They had some crazy finance term for it (traveling spouse?), and would only allow a portion of her salary to be counted as part of our loan qualification.

Bruce

Relocating is stressful. Finding and starting new jobs is stressful. Home building is stressful. Doing all three at once is extremely stressful. Rent and get to know the different parts of the city. Talk to people for references.

I’ve been at my current job for seven years and my lender said until I close in May (I hope) do not change jobs, even if it’s for more money. Any major changes to employment or debt between now and then could derail the process.