Before signing, make sure the agreement identifies the builder, spells out the work and materials, ties payments to milestones, and explains how changes, delays, warranty claims, and disputes will be handled. Verify the builder’s credentials and read the actual contract and warranty; state and local rules vary, so general consumer guidance cannot determine your rights without your location and agreement.
What should I ask a custom home builder before signing?
Take these questions to the proposal review. Ask for answers in the contract or attached documents—not just in conversation. FTC contractor guidance recommends a written agreement and cautions consumers not to sign with blank spaces. Its advice is general contractor guidance, not a state-specific custom-home contract checklist.
1. Who exactly is the contracting builder, and how can I verify its credentials?
- What is the builder’s full legal business name and, where required, license number?
- Can you provide proof of insurance?
- Which state or county authority can confirm the license?
- Can I speak with recent clients whose projects are comparable to mine?
Verify a required license with the relevant state or county authority. Check local builder-association or consumer-protection complaint information, and read online ratings critically. These checks help assess the business; they do not replace reviewing the contract.
2. What work and materials are included in this price?
- Does the written scope describe the work, materials, price, and estimated completion date?
- Which items, allowances, site conditions, or related work are excluded or not yet specified?
- Are promises made during meetings or calls included in the written agreement?
Compare estimates only after checking that their scope and specified materials are comparable. Ask about substantial price differences rather than choosing automatically by the lowest bid. The FTC recommends getting multiple estimates and cautions against selecting a contractor solely on price: FTC: How To Hire a Contractor and FTC: Roofing and Improvement Scams.
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3. When is each payment due, and what work triggers it?
- What deposit is due at signing?
- What specific completed work or other event triggers each progress payment?
- What must be complete before final payment is due?
Get the schedule in writing, and do not pay the full project amount upfront. Some states limit contractor down payments, but the applicable limit depends on where the home is being built. Check local rules before agreeing to a deposit.
4. What are the start and completion dates, and how are schedule changes handled?
Ask for estimated start and completion dates in the agreement. Clarify how the builder will notify you about delays or schedule changes and how those changes will be documented. Any remedies or other consequences for delay need to be addressed in your actual contract and checked against local law; general consumer guidance does not establish a standard custom-build remedy.
5. Who obtains permits and coordinates inspections?
Ask the builder to state responsibility for permits and inspections in writing, then confirm the local requirements with the permitting authority. FTC contractor guidance flags a contractor asking a consumer to obtain required building permits as a warning sign. That general warning does not determine how every custom-home agreement must allocate permit responsibilities.
6. How will changes to plans, materials, or site work be approved and priced?
Ask whether every change must be documented in a written change order that states its price and effect on the schedule before the work proceeds. Treat this as a term to resolve in your agreement: the available general guidance does not establish a universal change-order clause or pricing method.
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Scan for outdated or missing drivers - takes under a minuteDriver Scan →Repair Windows errors before they cause bigger problemsFix Now →Fix the driver behind crashes, sound loss and screen glitchesFind Drivers →7. What does the builder warranty cover, and how do I make a claim?
Read the offered builder warranty, including its coverage periods, exclusions, and claim steps. FTC guidance says a builder warranty comes with new construction and may cover permanent parts of the home, such as concrete floors, plumbing, or electrical work. The actual coverage and duration depend on the documents provided. A builder warranty is different from an optional home warranty or service contract. See FTC: Home Warranties.
8. What dispute process applies to contract disagreements or warranty claims?
Ask whether mediation or arbitration is offered or required, and what notice or claim steps apply. The FTC notes that many new-home warranties offer or require mediation and arbitration for disputed warranty claims. Confirm the terms in your warranty and contract; do not assume a particular process applies.
9. What cancellation rights and payment limits apply where the home is being built?
Ask which cancellation terms apply and verify relevant state and local rules with the appropriate consumer agency. Requirements vary by location, and some states cap contractor down payments. Without the build location and the agreement, general guidance cannot establish your specific rights.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What should be in a custom home building contract?
Use the draft to confirm that the deal is specific enough to understand before you commit. FTC advice for contractors says, “Even if your state doesn’t require a written agreement, ask for one.” Its home-repair guidance also says, “Don’t start work until you have reviewed and signed a written contract.” Those are general consumer recommendations, not statements of a particular custom-home statute.
- The legal name and identifying information for the contracting builder.
- A written scope describing work and materials, the price, estimated dates, and any exclusions or unresolved specifications.
- A payment schedule that identifies the deposit, progress-payment triggers, and final-payment requirements.
- Written terms for communicating schedule changes and approving changes to the plans, materials, or site work.
- Responsibility for permits and inspections, stated in writing.
- The builder warranty and its coverage, duration, exclusions, and claim process.
- Applicable dispute and cancellation terms.
Do not sign with blank spaces or rely on verbal promises that are absent from the written agreement. Contractor guidance is useful for basic safeguards, but it does not settle custom-build issues such as delay remedies, subcontractor responsibility, lien waivers, or termination rights. Resolve material questions in the agreement and check applicable local law. If the consequences are significant or unclear, consider review by a qualified local construction attorney.
How should I compare custom-home builder proposals?
Compare proposals against the same practical checklist rather than ranking them by the headline price alone.
| What to compare | What to check |
|---|---|
| Scope and materials | Whether the written work description and specified materials cover equivalent items. |
| Price and exclusions | Total price, items excluded, and any material details left unspecified. |
| Schedule | Estimated start and completion dates, plus how changes will be communicated and recorded. |
| Payments | Deposit, progress milestones, and final-payment requirements. |
| Builder | Legal identity, required license verification, insurance proof, references, and relevant complaint information. |
| Warranty | Coverage, duration, exclusions, and claim steps in the actual warranty. |
| Changes and disputes | Written change-approval terms and any stated mediation, arbitration, or other dispute process. |
A low estimate is not necessarily comparable if it omits work or specifies different materials. Ask the builder to explain major differences in writing before you decide.
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