You had binders of research ready for your building loan interview. You designed a thorough checklist of questions and needs before committing to the perfect piece of land. Your home building Pinterest board is the stuff of legends. You created a neat space in your home to store all your building communications and materials, and you have your builder on speed dial. You are on top of your game from the moment you decided to build your house.
So, what could trip you up now? Even with all the planning that homeowners put into creating their perfect home and seamless home build, many people are unprepared for a common lack of communication between themselves and their builder.
Just as there are terms and items at our job that are specific to your industry, construction and home building also has its own vernacular. All too often, that outside of the home construction field has a difficult time understanding the terms that appear in their paperwork, on building plans, and in discussions with their builder.
But not you, savvy home builder, because below is a list of the common terminologies and jargon used in the process of building a home so that you never have to be in the dark about the stages of your home build again. You will be filled with confidence and ready to talk shop with your builder – and possibly save yourself some money in the process.
Allowance
Every home contract lists which items and costs are covered, but there are always smaller items that can be covered in the contract without specification, like fixtures and other additions. An allowance is a money set aside to cover these items not named in the contract.
Change Order
You may find the perfect set of home plans right away, or you may find plans for a home that are close to what you’re looking for but require a few changes to make it your dream home. A change order is a document that is used to modify existing plans and features of your custom home.
Conditions, Covenants, and Restrictions (CC and R’s)
Yes, your property may be all your own, but much of the land that is for sale is a part of a larger community ecosystem. When you buy into one of these spaces, you will be confronted with the CC and R’s, or standards and rules developed by the community’s HOA to ensure that the land is protected, used correctly (like not using building a horse ranch on a non-designated horse property), and that all community standards are kept up to retain the property’s value.
Builder’s Risk Insurance
Your builder incurs a lot of risk during the home construction process. Builder’s risk insurance covers your builder throughout construction and may be included in some contracts.
Variations
The home that you envisioned before construction began may not fall in line with your revised plans for the home. Building a home takes a few months, and things come up that can lead to changes in the original plans. Maybe there’s a new baby on the way, and you want to add a room. Perhaps you have taken your photography hobby to a professional level, and your crawl space attic needs to become a professional darkroom. Variations are the additional costs incurred as these types of changes are made to an existing build.
Written Warranty
When we choose a builder, we assume that they are professionals who know the ins and out of the construction process, as well as how to make a home that is structurally sound and built to your specifications. A written warranty is a policy that holds the builder responsible for the repair of covered items for several years after the home is built.
Implied Warranty
If your builder did not offer you a traditional written warranty (which they absolutely should), they are still responsible for their completed work on the home. Though a written warranty may not be drawn up, you can sue your builder if something is wrong, damaged, or otherwise incorrect due to an error on the part of the builder because of the implied warranty.
