Expert: Paul S. Brown, AIA - 7/14/2006

Question
I am putting things together to start my own Home Building Company. I have a few questions that I need answered.

First off, will I need to find clients before I build a home or can I build a home using plans that I obtain and hire a real estate agent to then sell the property?

I drive around and I see these community homes, and there are some lots that are still for sale for residential building. If I buy a plot, where would I get the designs from so that my home looks like all the other homes in the vacinity. Or does a community have one builder behind it?

If I choose to, and make custom homes for people, will I not need to hire a archetect, so that we can draw up the plans. Ill need to find clients and have them sit down with the archetect and work out some plans that both parties can agree on. I will charge the clients money naturally for time spent making the plans or if they decide to go ahead and buy then I can offer to drop those charges.

So my more important question is, Do I need to find clients to be a successful home builder, or can I hire a real estate agent to sell my home after its all done and completed.

If I choose to go the real-estate route I will probably need to make sure the land plot is in a nice area, in a good school neighboorhod and jobs. This will keep new home buyers circulating and Im sure with all the people looking for homes that a house that I built will be sold and I can make some profit.  

Answer
Many home builders run their businesses "on spec", meaning "on speculation", meaning that they buy a lot, build a home, and put it on the market without having a specific client first.  It is a risky thing to do; if you don't build well, and can't find a buyer, you can loose a lot of money quickly; but it is the way many builders operate.  In some ways it is easier than finding a client first, and having to design to their specifications; which can be a long frustrating process when they want to make lots of changes, etc., or have trouble just making up their minds about what they want.
Many builders become thier own real estate agents; or, if married, sometimes the husband is the builder and the wife gets the real estate brokers license.
Good luck; sounds like an adventure!
PB