For those interested in building a new home, you have two options.
Tract Builders are also known as Production Builders. They can be regional or national companies and will likely build in master plan communities partnering with land developers who are responsible for subdividing land, paving streets and providing utilities. Tract Builders will often offer various floor plans with different elevations and may charge a premium for larger lots or more desirable lots. Some Tract Builders can provide changes to the floor plan but typically changes allowed are minor.
The good news about Tract Builders is that they buy products and services at a massive scale saving you money and as their building process is efficient, the home can be completed in less time. Moreover, as a Broker, we are able to negotiate a better financial deal than the consumer as well as act as buffer, provide good information and represent your interest. There is never a charge for these services as most Tract Builders work well with Real Estate Professionals and welcome the opportunity.
Custom Builders may have their own lots or can build on a lot you have purchased. While they offer flexibility in design and the final product; your responsibility as buyer is more complex. Zoning, Deed Restrictions, utility availability, and special covenants, homeowner association by laws and restrictions are your responsibility and must be adhered to such as architectural features, building materials etc…
Building a Custom Home can also more expensive and may take longer to finish as their system may not be automated. You will need to get a mortgage from which draws are made by the Custom Builder at periodic times. You will also need to make sure that documentation that all sub contractors were paid so as to preclude mechanics liens on your home.
Whatever you choose to go with, one of the most important first steps is to make sure that the builder is solvent and that they have a history of building homes and honoring warranties which are typically one year from completion.
Some builders (both Tract and Custom), especially smaller ones, are privately held and will not provide financial information. Buyer beware. Your Real Estate Professional will have good information on the builder and can research their reliability giving you more solid footing.
This is a very brief explanation and not inclusive of all information regarding these options or others that may be available.