Building a New Custom Home? Talk to an Attorney FIRST and Save Yourself Money

You’ve been thinking about your dream home for years and know exactly what it would look like. You’ve accounted for all the nooks and crannies. You’ve finally had a professional draw out the plans in your head.

You even shopped around and found a contractor who has approved the plans and drawn up a contract. All you have left to do is pay the deposit and sign the contract, and you’re ready to go, right? Wrong.

Building a custom home is complex, and you’ve likely forgotten to address many important issues with the contractor. These issues can cost you a significant amount of money down the road.

An experienced real estate attorney can help make your dream home a reality with less work and headaches. An attorney can guide you through the process by recognizing, addressing, and avoiding problems before they happen.

The Problems

Qualifications of the Contractor

It can be difficult to know whether a contractor is qualified to do a particular job. You may have looked online for reviews or got a recommendation from a friend.

But did you go further? Did you check to see if they have any licenses or confirm they received permits for the work? Did you check the subcontractors?

A contractor may take on a project they cannot handle or promise completion dates they cannot make. How can you ensure everyone working on your project is capable and suitable for the job and avoid construction defects?

Differing Perspectives

For many of us, a home is the largest purchase we’ll ever make. When we make that purchase, we want everything to be perfect and expect the process to go smoothly. However, it rarely ever does. This is especially true in a custom home – you’re paying a premium and want to ensure your vision is realized. Otherwise, what is the point of building it custom?

While these concerns are a big deal for most homeowners, the job is just another Monday for the contractor. Your project does not carry any particular significance for them. They may ignore your request to install a custom door for your bathroom, and you won’t know until the home is finished and it is too late to change.

How can you be sure everything you discussed and agreed to with your contractor is followed?

Change Orders and Financing

During a custom home build, things are constantly moving and changing. Thus, there is a standard process for it – usually called a “change order.”

However, contractors are not always the best at implementing change orders. Some don’t have a process for it at all. They may be poor communicators or may not have the best management skills. They’re specialized in construction, not business.

When tracking the finances of these changes, they may be worse. Contractors may change materials or designs without assessing the difference in price or notifying you of that change and those differences.

How can you be sure you’re aware of any changes and the consequences of those changes? And how can you be sure that the project’s finance account addresses those changes?

The Mortgage

A custom home is usually financed by a lender. The process usually goes like this:

  1. The buyer will get a “construction loan” from the lender.
  2. The construction loan will be converted into a mortgage once the project is finished. Those agreements will have different terms, including differing interest rates, which are only “locked in” if construction is completed by a deadline date.
  3. The project begins, and draws will be periodically taken from the construction loan.
  4. The project is completed on time and converts to the mortgage.

Contractors aren’t parties to these separate agreements with the bank and don’t necessarily know or bind themselves to their terms.

Sometimes, they go around the homeowner and get draws before it is proper. Sometimes, they say things to the lender that can negatively affect your relationship. Sometimes, they ignore or forget the deadline for your loan, a mistake that can cost you hundreds of thousands of dollars in interest over the course of a 30-year mortgage.

How can you be sure these things don’t happen?


As mentioned above, contractors are not always the best communicators. They also aren’t lawyers. Despite these two things, they often draft the contracts for their projects.

Due to this, many items in their contracts are often unclear. The completion date and how that date can change needs to be well-defined and often, is not. The process for acceptance of the home and transfer of title needs to be exact, and often, is not. The process for handling subcontractors and their payment needs to be clear, and often, it is not.

How can you be sure that all of these steps in the process are clearly outlined?

The Solution

An experienced real estate attorney knows these problems all too well.

They are often tasked with cleaning up after the fact, after the home has been finished and the problems come to light. It can get costly, messy, and confusing to sift through, and issues cannot always be fixed because the home is already completed.

The good news is that the solution is simple: speak with and be advised by an experienced real estate attorney before signing a contract for your custom build.

Benefits of speaking with an experienced attorney:
  • An experienced real estate attorney can ensure the contractors and subcontractors are qualified to do the work by verifying their licenses and permits.
  • They can cater a contract to your needs – a custom contract for a custom home – so everything is addressed.
  • They can ensure the contractor follows their word and address any deviations as they come, instead of six months after the contractor has abandoned the job site.
  • They can be a liaison between the lender and the contractor, balancing their needs.
  • They can create processes for change orders, financing, completion dates, acceptance and transfer, and everything in between.
  • Not only could they save you money by catching and solving potential mistakes in a custom home, but also, having a lawyer from the beginning saves on potential litigation costs.
  • It is often more expensive and time-consuming to clean up the mess after it happens than to keep something orderly and controlled while it is happening.
  • You can factor legal costs into your budget from the outset instead of having to figure out where to scrounge up cash after you spent your savings on your dream home.

If you are thinking about building a custom home but are wary of the pitfalls along the way, give us a call. Thrift McLemore’s attorneys pride themselves on their expertise in real estate law and will fight to get you the home you deserve without any complications.

Contact Thrift McLemore by email at or by phone at (678) 784-4150.