When you sign a contract with a homebuilder to begin construction on your custom home, it’s an exciting time! If you’re like most people, it’s tempting to sign without reading every word. Sometimes, we gloss over details in our contract or just don’t remember them. We get bored with all the legal mumbo-jumbo and miss some important stuff! We get it! We’ve done it too!

I could tell you a humbling story about an investment property we were trying to sell. There was language in the contract with the lender that we specifically told the broker we didn’t want in there… but guess what? It made it in there, and we missed it. I felt like an idiot because, at the end of the day, I signed on the dotted line. I was 100% responsible and had to deal with the massive headache it caused—not to mention over $10,000. There was no one to blame but the person staring back at me in the mirror. Ugh… it was pretty painful.

Many homebuilders will tell you they often have to remind clients about terms outlined in their contract. We make it a priority to go over everything with you upfront, so there are no surprises down the road.

So, what are some things in your contract you may need to know?

Key Contract Details You Need to Understand

• Your responsibilities—such as HOA approvals, builder’s risk insurance, and site prep requirements.
• The home builder’s responsibilities—almost everything else! 😉
• How payments are disbursed
• The scope of work

One of the most important things to understand is what’s included in your custom home price. Most of it is outlined in your specs and allowances, which we review carefully with every client.

Basic specs will include details like:

• Do I have a gas stove?
• Is my water heater gas or electric?
• Do I have wood or vinyl shelves included?

What About Home Allowances?

These vary by homebuilder, but they typically cover flooring, lighting and plumbing fixtures, cabinets and countertops, appliances, and sometimes even your driveway and landscaping.
Skipping over these details can lead to major misunderstandings:

• Is a refrigerator included? Wait, what? I thought it was, but right here in black and white, it says it’s not!
• Oh good, my porch rails are vinyl and my deck is Trex. Whew!
• Hold on… I’m responsible for all items not purchased through a preferred vendor? I didn’t even think to ask why, much less read the whole contract!
• Maybe I should check to see if landscaping is included—so my house isn’t just sitting on a pile of dirt.

Ugh… Many facepalms have happened after rereading contracts! That’s why we take the time to go through these details with every client—to prevent any surprises later.

What Is the Biggest Thing Clients Forget in Their Contract?

If I quizzed you about the most common thing anxious clients overlook—something that’s in bold print in their contract—what do you think it would be?

Got your guess?

Drumroll…

Here it is: The homeowner CANNOT move in to the house before their homebuilder is paid in full.

Many clients assume they can move in to the home as soon as the building department issues a CO (Certificate of Occupancy). Sorry, not true. The contract states that both must happen: a CO AND final payment.

But wait… what if:

• My mortgage loan officer is taking their sweet time sending the inspector out?
• The payment processor is slower than a snail running through peanut butter?
• They suddenly decide they need another appraisal?
• My lease is up, and we have nowhere else to go?
• We’re living in my in-laws’ basement with their 14 cats, and I’m about to lose my mind?

While we completely understand these challenges, unfortunately, the homebuilder can’t budge. These are just part of being an adult signing a contract. We can’t be responsible for an expiring lease, your in-laws’ overly friendly cats, or a mortgage lender that moves at the speed of a turtle.

As I used to tell my daughters growing up, “We’re all responsible for carrying our own backpack.” AKA: Don’t make someone else responsible for your stuff.

Why Final Payment Matters to Your Homebuilder

While this may sound harsh, what’s actually harsh is when our suppliers need to be paid, and if they aren’t, they call us upset. Worse, they may lose trust in us, freeze our account (!), and cut off our ability to order materials for another person’s home—because yours hasn’t been paid for—causing cash flow nightmares and sleepless nights.

If you’re building along the NC coast, you already know there are unique challenges to constructing a custom home in this beautiful part of North Carolina. From wind load requirements to flood zones, working with an experienced homebuilder who understands the NC coast is essential. We’ve been doing this for decades, and we make sure our clients fully understand their contracts before we break ground.

I’m sure you can see the domino effect. Unpaid bills can stress out even the most stable person—especially for builders like us who pay everything as close to on time as humanly possible while juggling multiple homes. After all, this is what we do for a living. You expect to get your paycheck on time, right?

What If You Absolutely Must Move In Before the Final Payment?

If you must move in before the bank issues the final payment, there is a solution: You cut a check to your builder for the final payment and work it out with your bank. Once your check has cleared, you’re free to move in.

Thinking About Building a Custom Home on the NC Coast? Let’s Talk!

Building a custom home is an exciting journey, but understanding your contract is key to avoiding costly mistakes. We make the process as smooth as possible by walking you through every detail—before you sign.

If you’re looking for a homebuilder with decades of experience on the NC coast, we’d love to guide you through the process. Contact us today to start planning your dream home!