Building a custom home with a contractor

Everything on the owner-builder side of this site assumes you hold the permit and carry the liability. Hire a general contractor and four things move onto their side of the table, and four new ones land on yours.

Their license is now your protection, so verify it yourself. Every state that licenses residential contractors runs a public lookup. Check the name on the contract against it, check that the license is active and in the right classification for a house of your size, and check the complaint history. Do it before you sign, not after the first draw.

The contract is the whole relationship. Fixed price or cost-plus, what an allowance is and what happens when you exceed one, how a change order is priced and approved, who owns delays, and what the warranty actually covers. A retired GC will tell you that most disputes were written into the contract on day one by omission.

Lien law runs the other way now. As an owner-builder you protect yourself from your subs. As a client you protect yourself from your builder's subs and suppliers, who can lien your house for work your builder was paid for and did not pass along. Lien releases at every draw are the paper that stops that, and the rule for them is set by your state.

The draw schedule is the only leverage you keep. Money should follow inspected, completed work, never the calendar. The lender's inspector is on your side here; so is the permit card, which records what passed and when.

The owner-builder guides earned their keep by citing the statute on the page instead of summarizing someone else's summary. The hiring guides will do the same for the client's side: what your builder's contract can and cannot do in your state, the lien and draw rules that protect you, warranty and licensing law, and what happens when a builder walks. They are being written for the states with the most readers first.

Until yours exists, the owner-builder guide for your state is still the best plain-English account of the code, permit, and inspection sequence your builder will be working through, and the financing page covers construction loans, which are the same product whether or not you swing the hammer.