My Builder is Taking Too Long to Build My House

In an on-demand world, having a custom home or even production home built from the ground up requires a lot of patience. As of July 2017, it takes a typical builder in North Texas at least 7 months to complete a new construction home. The reason for this is labor shortage and material shortages. In places like Texas, there is a boom of people relocating to the Lone Star state. Builders are having a hard time keeping up with demand and so trades are spread thin across many homes being built at the same time.

What many consumers don’t realize is that when you sign a contract to have your new home built, you will never get a specific closing date on the day you put your earnest deposit down. This is the exact opposite to resale homes where the contract states a closing date on or before a certain day. Sellers will even favor certain buyers who can close early. This is not the case with building a new home. There are too many variables for a builder to predict the exact date (or even week) your home will be finished regardless of how much you’re paying.

Many buyers are not dissuaded by this, as the excitement of getting their perfect abode outweighs the details of a closing date. A buyer who is living with family or maybe has a month-to-month lease has the added benefit of not having the financial pressure to move on a specific date. But if you’re the buyer having to sell an existing home or paying steep fees to break a rental contract, not having a guaranteed closing date can be a nightmare.

Did you know some builders can take up to 2 years to build your new home?
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The bigger surprise that most consumers don’t realize until month 7 has passed is that a builder may go into month 8, 9, 10 and all the way past one year before your house is complete. In fact, some contracts state that the builder may have up to 24 months to complete your home. The builder wants to mitigate all risks of labor shortages, material backlogs, and even natural disasters like hurricanes and tornadoes in Texas. So this long build time allows them to not be in default of the contract if anything comes up during construction.

What can a prospective home buyer do?

There is not too many things a buyer can negotiate in a contract with a production builder and this is one of them. The best thing to do is go in with eyes wide open and understand your backup plan if things don’t finish in 7 months. What is your plan in month 8, 9, or 10? Also, think about the time of year. Would it be easier for you to handle a delay in the summer? If so, then you’d want to sign a contract 6-7 months prior to May or June. If you know it rains a lot a certain time of year, then plan 12 months ahead so that your home is not being built in the rainy season. Nothing is guaranteed, but you can make a proactive effort to try and mitigate risk on your end just as the builder does it on their end.