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General Contractor/Builder Do’s and Don’ts
Paragon C&D Builders / Vallone Real Estate
Wednesday, March 30, 2011 • Posted April 1, 2011 2:59 PM

There are some do’s and don’ts in the area of General Contractor/Builder areas. Here are a few things that might help you in the future.

Don’t ask a General Contractor/Builder for their subs list so you can contact them to do work for you. Either you hire the general contractor or find your own subcontractors/trades for your project. This is how the General Contractor/Builder makes their money! Not to mention know if the work is being done properly. Most General Contractors will not give you their sub list, unless you want to pay something. Put the shoe on the other foot, would you want them to by-pass your business for something that would only help them and cut you totally out?

Don’t go by the Preferred Builders list at a Subdivision Development. When you see the "Preferred Builders" list, most of these have committed to paying the developer or salesperson a % to get on this list. How do you know if your contractor is charging you any hidden referral fees on that new home? Most of the time you won’t know. Most builders will pay a salesperson up to 3% to recommend them in a subdivision. Who do you think will pay this additional 3%? You the consumer will pay this! As a consumer, do your own home work. You might not see this additional cost; it could be embedded in their profit margins. Ask them if they are paying the sales person a referral fee. Again, they might answer truthfully, and they might not. Just beware of the possible additional amount you might pay on your home. Is this sales person qualified to recommend builders anyway? How do they know all the details about quality and reputation? Check out local builders yourself. Great place to start with, is the local Chamber, newspaper, or asking locals.

Can a realtor advertise service providers such as contractor? Yes, but if they offer, recommend, or promote the use of a service provider and expect to receive compensation from the service provider if a party uses those services, they must disclose that they may receive compensation. Also, acceptance of fees from service providers may be a violation of the Federal Real Estate Settlement Procedures Act (RESPA), which prohibits certain referral fees and kick-backs. (http://www.trec.state.tx.us)

Do check references on the General Contractor/Builder prior to selecting them. And do ask them if they carry insurance. Also make sure they warranty their work, and give it to you in writing.

Is there an Honest General Contractor/Builder? The answer is yes. But you the individuals need to know what to look for and what to ask. Once you get into the selection process, always get at least 2-3 bids. And most important, compare apples to apples in your bid selections. Your construction project can be fun.

For all your real estate and building needs or questions, call Debbie at 830-833-4249 or 713-818-6658, or send an email to debbie@vallone realestate.net.

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