Building new is the largest project most people ever commission, and the one where the quality of the contract matters most. The decisions that cause the worst outcomes are almost always made before ground is broken.
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Whether the contract is fixed price, cost-plus, or an estimate with a not-to-exceed ceiling is the single most important thing to establish, and homeowners frequently do not know which they signed. Scrutinize allowances carefully, since unrealistically low allowances are the most common way a competitive-looking build price becomes an expensive one.
Under a fixed-price contract the builder commits to a total for a defined scope and carries the risk if their costs run over, which gives you budget certainty but means changes are handled through change orders and the builder prices risk into the number. Under cost-plus you pay actual costs plus an agreed fee or percentage, which can be cheaper if everything runs smoothly and offers transparency into real pricing, but you carry the overrun risk. A middle option is cost-plus with a guaranteed maximum price, which caps your exposure while retaining some transparency. None is universally better, but you must know which you have signed, because the incentives differ completely. If your contract has extensive allowances rather than specified items, it is functionally closer to cost-plus than the headline number suggests.
For a typical single-family home, construction commonly runs somewhere in the range of seven months to over a year once work begins, with substantial regional variation. What is easy to underestimate is everything before that: design, engineering, permitting and utility approvals can add many months on their own, and permitting timelines vary enormously between jurisdictions. Weather, inspection scheduling, material lead times and trade availability all introduce slippage, and the honest expectation is that some slippage will occur. Ask for a schedule broken into phases with dates rather than a single duration, tie progress payments to those phases rather than the calendar, and define narrowly which delays are excusable. A builder who declines to commit to any dates at all is telling you something worth hearing.
Verify the contractor license with the state directly rather than accepting a card, and confirm the license class covers new construction and that the status is current. Request a certificate of insurance for general liability and workers compensation, ideally sent by the agent rather than the builder. Ask whether they are bonded, which matters more on a build than on smaller work. Then go beyond the paperwork: ask for addresses of homes completed two or three years ago rather than recent handovers, since problems surface with time, and contact those owners. Search the business name alongside terms like lawsuit and complaint, and check the licensing board for disciplinary history. Finally, ask how many projects they are running concurrently, because overcommitment is the most common cause of schedule collapse.
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