Building a custom home today on Hilton Head Island and in Bluffton is not a hot topic of discussion, but if you are in the market and shopping for a general contractor you might want to take considerable caution. In today’s blog and my 8 a.m. posting scheduled for this Monday I would like to explain why.
Hilton Head Island and Bluffton are blessed with our fair share of quality, reliable contractors, but if there’s any area that is feeling the pinch of these tight financial times it is the construction industry. The problem that lurks for the consumer who is looking to get a steal while building a home is that in the process they might just be doing business with a thief.
Custom home builders face a market that is extremely soft, more so than even the real estate market. The foreclosure market has made short order of any hopes for a recovery in the construction trades anytime soon, so it is true that contractors are willing to work at reduced profits. However prudence in pricing out a home should be your utmost concern.
When I built my first home back on Hilton Head Island in 1991 I chose a builder who came recommended from several resources. In all honesty I chose him because he offered the best price. Everything seemed to work well through the process until the very end. It was then that I received phone calls from two of the builder’s other clients whom had started construction on their homes well after my house was underway. They told me of incomplete work and overcharges on work orders.
What transpired next was alarming. I received calls from sub-contractors, lenders and material suppliers asking me about the builder. I learned that I narrowly escaped the byproduct of shoddy business practices where the builder was taking construction draws from one job to pay for expenses on homes that were already completed. Within a year after the completion of my home, the builder was bankrupt. One absentee property owner showed up to his home site four months after supposed construction had started to find nothing more than an empty lot.
All of this leads me to a call that I received from a well-known and respected general contractor this week. He and two other builder’s priced out a home that was going to cost somewhere in the $1 million range. Two of the bids were within 1/4 percent of one another. The third was 17% lower!
The problem is that the contractor that had the low bid is in deep financial Kimchi. He is behind in payments to a number of suppliers around the island as well as tardy with some of his sub-contractors.
In this environment, everyone is looking to take advantage of the market’s weaknesses. Just remember, this knife cuts both ways and it’s possible that in your zeal to get a great deal it’s very possible to end up with the short end of the stick.
My suggestion is that you look for more than a referral list of past customers. Ask for the name and number of the contractor’s building suppliers (lumber, hardware, etc.). Get more than one of each. Ask for the name and number of the contractor’s sub-contractors (plumbers, framers, electricians). Get more than one each. And don’t be afraid to ask for the name of the contractor’s bankers. Finally, in this environment, asking for a credit report is not out of order either.
If your requests are met with anything other than an open-book compliance, you might want to look for someone else to build your home. Just remember, when you do something on the cheap, cheap is very likely what you will get.
Look to my Monday morning blog for more on this subject.
