Home Building 101

There are numerous misperceptions when it comes to home building. Here are just a few of the answers to some common misunderstandings:

Question: When is a Building Permit required?

Answer: Basically any residential structure built in NC requires a building permit. The local code official (Usually County) is responsible for overseeing permitting and inspections. It is a misperception that if you do not require being hooked to an electric grid (in other words, electricity being provided by an electric company), then building inspections are not required. This misinformation stems from the fact that code officials have the authority to deny electricity hookup to the home unless all code requirements are met. Though this is true, this does not mean that inspections are not required on homes that do not require electricity hookup from an electricity company. Furthermore, code officials have legal authority to impose fines and other punishment up to requiring that the home be uninhabited until the home can be inspected and brought up to code. The bottom line is that all homes built in NC require a building permit and inspections. Trying to get around this fact could cost the homeowner drastically. So, follow the rules and obtain the necessary permits and inspections when building a home.

Question: When is it necessary for a Licensed General Contractor to build my home?

Answer: In NC, state law allows for a homeowner to act as their own contractor in building their home provided that: The home is their primary residence, and they will live in the home for at least the next 12 months after the home is completed. Some Counties in NC actually require that an affidavit be signed to this affect. Obviously, any commercial structure would not fall under these requirements. Also, any home that is being built specifically as an income producing property (rental) does not fall under these requirements. Keep in mind also that some Counties require that a test be passed in order for an unlicensed homeowner to provide electrical, mechanical or plumbing work on the home. For clarity, ask your local code official.

Question: How do I go about finding a “good” Licensed General Contractor?

Answer: To answer this question, it is necessary to understand how General Contractor licensing in NC is managed. To become a licensed General Contractor in NC, a person must first apply and be approved to “sit for” the Contractor’s exam. A contractor can apply to take the residential or building exam. A contractor with residential license may build any residential structure including single family homes and duplexes. A contractor with building license can build any structure, residential or commercial. Once an applicant passes the desired exam, the applicant is eligible to apply for a license. The level of license granted depends on the financial strength of the applicant. In NC, Licenses are issued as Limited, Intermediate or Unlimited. As of the date of this post, a licensee holding a limited license may build a single structure with a construction cost of up to $500,000. An intermediate license is good up to $1,000,000, and unlimited is…just as it implies, good for any structure of any value. Armed with this information, ask potential contractors for a copy of their license. On the license will be the type of license (residential or building) and the level. There will also be a license number. Armed with the license number, you can go to www.nclbgc.org to inquire regarding a particular licensee. After you verify the existence of a valid contractor’s license, one of the best ways to evaluate a contractor is to ask for a list of 10 or more references. It is true that almost any company can come up with 3 or 4 references that will speak well of them, finding 10 is a bit more difficult. In many cases, the contractor can arrange for you to visit some of the homes they have built. Lastly, evaluate whether the contractor has the support to supply your needs, i.e., a design center, well established subcontractors, etc. Use good common sense to evaluate the contractor, and you should be fine.

Question: How many pricing estimates should I get from Contractors to ensure that I get a quality home at a reasonable price?

Answer: There’s certainly no magic answer to this question. Some people feel that three bids are adequate, while some do their homework early and find a builder they are comfortable with, and only have that builder quote the project. I believe the answer is to feel comfortable with pricing and quality. One misperception is that larger builders can somehow build for much less than smaller builders. The truth is that there is very little difference in the pricing structure between large builder and smaller builders. Most of the pricing difference comes from negotiated pricing with national suppliers for specific windows, doors, siding, cabinetry, etc. Special pricing provisions may well lower overall costs by 3%-5%. But, larger builders’ overhead more than offsets any savings from national contracts. Further, such national contracts serve to limit the choices of the homeowner rather than providing true custom choices. The bottom line is that builders who have been in business for a while have done so because they have been able to keep costs under control while providing the best quality available.