To become home builder in USA and other developed countries you need to meet all the requirements from local authorities or builder associations. In most cases it is a combination of:
- Education and passing exams for local building codes
- Previous experience with knowledge in the field
- Obtaining license as home builder or general contractor
- Liability Insurance and warranty for projects
It can take up to several years to complete necessary training and education before you can apply for licenses that allow building new residential homes. Some states or countries have it much easier than others.
Think of it this way: custom home builder handles hundreds of thousands of dollars (if not millions) for projects that are dangerous and require detailed knowledge. Federal and provincial governments are trying to protect home owners (clients) and city property from potential disasters. Therefore they need to see that home builder has enough knowledge, experience and sometimes financial backup to construct new home.
Home construction affects lives of real people and should be handles by true professionals in their field. You wouldn’t sit in a plane if you knew that pilot has little knowledge and experience of operating planes.
Overall Time and Costs to Become Home Builder
Every designation or position has costs involved. Although every country and region has different requirements and different time factors we want to summarize and provide information for basic or average time with costs needed to become home builder.
We are assuming that whoever is reading assumes starting from zero. Remodel On Point wants to cover as much ground as possible to understand what it really takes to become home builder and possibly compare it to other professions.
Here is a table for average and what we think is adequate time and costs for home construction career:
|Approximate Cost||Recommended Time|
|Experience and Knowledge||Priceless||3-5 years|
|Education||up to $5000||1-2 years|
|Licenses||up to $2000 per year||2 months|
|Insurance||up to $2000 per year||no time|
|Starting Base||$50 000||1 year|
Unlike other professions, new home builders go through physical experienced before start reading books. Working in the field is actually a prerequisite for application for license or enrolment. It kind of makes a lot of sense to learn from inside as a worker to understand the real day to day problems.
With this table can you compare home builder profession to other individuals in your life that you trust with such importance? We don’t want to compare builders to doctors or scientists, but in our opinion such important position needs even more restrictions and qualifications.
How to Become Home Builder and Mandatory Requirements
Let’s start from the beginning and try to understand what are the requirements and why do we need them for home builders. Why not just allow anybody build homes for themselves or for other clients without accreditation.
The answer is actually very simple. The bigger responsibility profession brings, the more requirements government should mandate from individuals.
For example to become a commercial pilot it would take minimum four years of hard work with excellent performance in school and training. Doctors that perform surgeries have much longer and intense program.
We believe that home builders take on the responsibility of constructing perfectly safe and adequate home construction with management of everyone on jobsite. Home construction is on average the biggest purchase throughout the whole life.
With more requirements by government for home builders, construction industry becomes safer and more professional. Even though costs to build new home potentially go up, the service and quality increases with higher standards in residential construction.
Licensing and Enforcement for Residential Home Construction
As we keep on repeating, every state or country has their own regulation and licensing procedures. To summarize it together Remodel On Point had to do research for several weeks. What our team came up with was not a surprise after all.
Most federal governments have outline for what is a home builder but let local authorities handles the actual process.
Dense and developed areas have strict rules and longer education to become home builder. Every several years local laws change and improve on level of demand for new builders.
This is the way home construction process regulates and inspects works:
Federal Government – has little or no impact on how to become home builder.
State (local) Laws – dictate legal requirements and appoint authorities that control education, licensing, enforcement and warranty.
Local Builder Associations (or similar authorities) – come up with education system and license requirements for everyone who wants to be new home builder.
Warranty Authorities for New Homes – protect home buyers and outline mandatory work ethics to follow. They may require deposits and full company check before allowing warranty for new homes.
Inspectors – make sure that building code and other mandatory requirements are met during home construction.
Safety Authorities – ministries and departments that ensure work is done in safe manner. They may randomly inspect jobsites and have authority to stop work if needed.
Can Builders do Most of Work without Licensed Trades?
Once you obtain permission to build new homes with all necessary documents and license you can start construction. But what does that mean? Can you just hire helpers and do everything by yourself? Absolutely not!
The license that allows a person or a company to construct new residential homes refers to management of the project. You still need to obey bylaws and hire professional trades to perform work. All plumbing and drain connections have to be done by licensed plumber, wiring and outlets by licensed electrician and so on.
Home builder is responsible for organizing entire process of construction and insures quality. That means as a builder you have to check other peoples’ work and make sure they don’t cut corners. Within time every project becomes easier to take on. Especially when homes are somewhat similar.
Each trade on jobsite must be separately insured and licensed if necessary by local building code. They need to warranty their work and come back for repairs and deficiency if there is a problem down the road.
Meaning of Insurance and Warranty in Home Build
Home owners often misunderstand purpose of insurance and warranty that builder provides. It is slightly confusing if you have never come across it.
Builder Warranty for New Home – Every home built is warranted by home builder and specific items have different warranty period. For example home builder can provide warranty for wear and tear for one year, but plumbing and electrical for 3-5 years. Maximum warranty is always for structural parts of the house and can go up to 10-15 years.
Liability Insurance – Protection of project and property can be insured by general contractor or new home builder. Clients need to be completely safe and should not worry about worst case scenarios while paying huge amount of money for construction. Liability insurance costs several thousand dollars per year and cover losses due to damages, natural disasters, thefts and many more.
Workers Compensation Insurance – directly hired workers by builder have compensation insurance. All other trades should have it as well and builder is responsible for checking it. It protects clients (home owners) and builder from lawsuits and covers lost money due to injuries at work.
For example carpenter falls down and gets hurt. He cannot work for next two month and have to be compensated. Workers comp insurance covers the losses.
Professional Knowledge and Experience in Construction
Complicated home builds can last a year long. This type of work is super technical and it’s not a secret that knowledge with experience is a must for project manager. But how to become home builder and where to get that experience?
To get licenses most regulators and builder associations require several years of experience specifically managing large projects. We suggest working at least 5 years in home construction to learn enough aspects of the job.
Even with experience in physical work there is lots to learn. Home builder needs to provide adequate pricing break down, complete scheduling of all trades, and learn communication software and many more. Simply knowing how to build a house does not make you a great builder.
With hands on experience our recommendation is spending at least 2 years managing projects and estimating jobs. This time should be enough to get confidence and potentially start taking on full project as a home builder.
Don’t Really Need Money to Buy Extra Equipment
There is a lot of talk about home builders owning necessary construction equipment for work. Some have dozers, excavators, trucks, bobcats and other machinery.
In reality home builder does not require any of equipment unless he directly works a trade and for that he needs heavy equipment. There are those residential home builders and general contractors that try to do most of work themselves or save portion of money by doing parts of it. That can be excavation, moving soil and stones, transporting materials, lifting roof trusses and beams.
For the most part home builders are those who manage everything and use their expertise in home construction.
Only recommended machinery is pickup trucks. You can’t really drive in low profile car on home construction site with no driveway in place yet.
Is Builder and General Contractor the Same?
Generally the answer is no, but it depends. Some home builders take it personally when they are called general contractors or just contractors.
The actual meaning of general contractor is the person who manages and controls all trades with full responsibility of the job. But it is not limited to job size and general contractor could be the person who manages basement renovations, kitchen remodeling or other jobs.
Home builder is a designation that can be achieved through experience and education. Normally person would study and provide enough information to obtain such license. Saying that, technically builder is a general contractor because he manages trades and subcontractors. Ask local departments how to become a custom home builder in your region.
Many countries and states in US have separate licensing for home builder and general contractor, while less developed areas combine it together and even general contractor can build single residential homes.
How to Start as a Home Builder and Get Jobs
The most popular starting point for home builders is completing a project for themselves or family member.
Imagine you are working for a construction company as a project manager and want to build your first house. There is no portfolio or any completed houses to show. You can’t just quit job and start looking for clients.
Our suggestion is to keep the job and slowly build first home on your own. It would be slower and should be on discounted rate, but it’s your first step in. After completion you can start looking for clients and with new contract can transition to be home builder on your own.
Usually first contract’s profit is somewhere similar to annual salary that you would lose at work and from there on you control the growth. From first thought how to become a custom home builder to actually building a company may take many years.
Remodel On Point team suggest building online presence with website and social media pages like instagram, facebook and even tiktok. We provide help to new builders with potential clients other assistance. Reach out to us by email.