Questions to Ask a Custom Home Builder
Lists of questions to ask a builder are easy to find. What almost none of them tell you is what a good answer actually sounds like, which matters, because a builder who wants your business will have a confident response to every question on every list.
The questions below are organized by what they protect you from, with the North Carolina specifics that generic national articles leave out. Several of them reference state law that directly affects your position if something goes wrong.
Start with the one you can answer before you ever sit down.
Before the First Meeting: Verify the License Yourself
In North Carolina, a general contractor must be licensed when the contract is valued at $40,000 or more, under NCGS 87-1. That threshold rose from $30,000 effective October 1, 2023, so older online guidance may be out of date. Building without the required license on a project at or above that figure is a Class 2 misdemeanor.
Verify it directly through the North Carolina Licensing Board for General Contractors, which maintains a public search by license name, number, or county. Three things to check:
The license belongs to the exact legal entity that will sign your contract and receive payment. Not a parent company, not an affiliated LLC, not the owner personally. Compare the license record against the name on the proposal, the permit, and the checks.
The classification and limitation fit your project. North Carolina issues Limited, Intermediate, and Unlimited licenses, and each caps a single project's value. A Limited license covers projects up to $750,000. If you're building a $1.4 million home, a builder holding a Limited license cannot legally take it on.
The status is active, with no linked disciplinary orders.
Don't accept a screenshot from the builder. Run the search yourself. It takes two minutes, and it's the only question on this page you can answer without anyone's cooperation.
Questions About the Company
Can you provide current certificates of general liability and workers' compensation insurance? Ask for both, and ask that the certificates come directly from the builder's insurance agent rather than forwarded as a PDF. Certificates are easy to alter and easy to let lapse.
Why each matters: general liability responds if the builder's work damages your property or injures someone. Workers' compensation covers injuries to their crew, and this is the one with direct exposure for you. North Carolina requires workers' comp for most businesses regularly employing three or more people. If a builder is uninsured and someone is hurt on your lot, that claim can come looking for the property owner.
Four things to confirm beyond the certificates themselves:
Coverage runs through your build, not just through the signing date. Policies renew annually and projects run longer.
Ask to be listed as a certificate holder, so you're notified if a policy is cancelled mid-project.
Ask whether subcontractors carry their own coverage and whether the builder collects certificates from each of them. A builder's policy generally doesn't extend to an uninsured sub's crew.
Ask who carries builder's risk insurance during construction. That policy covers the structure itself against fire, theft, and weather before you take occupancy. Confirm the limit matches the contract value.
A builder who handles this routinely will have the certificates to you within a day. Hesitation here is worth paying attention to.
How long have you operated under this legal entity name? Builders sometimes dissolve one entity and open another after a run of disputes or a bankruptcy, which leaves prior judgments and warranty obligations behind. A long history under one name is meaningful. A new LLC run by someone with decades of experience isn't automatically a problem, but it's worth asking about directly.
Who will actually be on my project every day? The person selling you the job is frequently not the person running it. Ask for the project manager or superintendent by name, how many projects they carry at once, and how long they've been with the company. It's also worth asking to meet the team rather than only the person quoting the work.
How many homes will you have under construction during mine? There's no universally right number, but there is a right answer for the size of their team. A builder running eight homes with one superintendent is spread thin, and you'll feel it in response times and quality control.
Can I visit a project currently under construction? Finished photography shows the design. A framed house shows the workmanship: how the framing is detailed, whether the site is organized, how the crew conducts itself. This request separates builders quickly. Ask to see completed work as well, but don't let the portfolio substitute for a site visit.
Can I speak with clients from three to five years ago? Anyone can supply three delighted recent references. What you want to know is how the house performed after two winters and whether warranty calls were answered. Ask for older references specifically, and ask those homeowners what went wrong and how it was handled. Every project has something.
Questions About the Contract
Is this a fixed-price contract or cost-plus? Both are legitimate, and they distribute risk differently. A fixed-price contract sets a number, and the builder absorbs overruns, but bids usually include contingency, and change orders become the pressure point. Cost-plus bills actual costs plus a fee or percentage, which offers transparency but shifts overrun risk to you. What matters is that you understand which one you're signing and how it behaves when something unexpected appears.
What is the draw schedule tied to? Payments should be tied to completed milestones, not to the calendar. Ask what triggers each draw and whether an inspection precedes it. Be cautious about any schedule where payments run meaningfully ahead of completed work.
Does this contract waive the implied warranty of habitability?
This is the most important question on the page, and almost nobody asks it.
North Carolina has no statute creating a new home warranty. Instead, state courts have long held that builders provide implied warranties of habitability and workmanlike construction. The home will be free of major structural defects and built with reasonable care and skill. These apply automatically, even if never discussed.
They can also be waived by contract. Builders sometimes include a clause in which the homeowner agrees the implied warranty won't apply, and that clause is enforceable. Homeowners sign it routinely without noticing.
Read for it. Ask about it plainly. A builder who declines to waive it is telling you something real about how they stand behind their work.
Who designates the lien agent, and will I receive lien waivers with each draw? North Carolina requires a lien agent to be designated on projects of $40,000 or more, and a building inspector cannot lawfully issue the permit until that information is furnished. The system exists to protect you: it gives subcontractors and suppliers a way to give notice, so you don't pay the builder in full and then face a lien from a supplier the builder never paid.
Ask whether you'll receive signed lien waivers from subs and suppliers at each draw. A builder with clean payment practices will say yes without hesitation.
What is the change order process? Every custom home has change orders. Ask how they're priced, whether you approve in writing before work proceeds, what markup applies, and how schedule impact is documented. Verbal changes are how disputes start.
How are delays handled? Ask which delays extend the schedule without penalty (weather, permitting, supply chain) and what happens if the builder simply falls behind. Ask what the contract says about substantial completion and how it's determined.
Questions About Allowances
Construction allowances are where budgets quietly break, and they deserve their own conversation.
An allowance is a placeholder dollar figure for a selection you haven't made yet: tile, plumbing fixtures, lighting, appliances, flooring, countertops. If the allowance is set low, the contract price looks competitive, and you discover the real number at selections, when you're emotionally committed and the framing is up.
Show me the full allowance schedule in writing. Every allowance, itemized. If a builder is vague here, that is the signal.
Are these figures based on current local pricing for the level of finish we've discussed? Ask the builder to name specific products or a specific supplier at that allowance. A lighting allowance that sounds fine in the abstract may cover builder-grade fixtures in a house where nothing else is builder-grade.
What happens if I come in under an allowance? Some contracts credit you the difference. Some let the builder keep it. Both exist, so you just need to know which you're signing.
What's excluded entirely? Landscaping, driveways, window treatments, appliances, and low-voltage wiring are common exclusions. Get the exclusion list in writing and budget for it separately.
Questions About the Warranty
What express warranty do you provide, in writing? The industry standard in North Carolina is the 1-2-10 structure: one year covering workmanship, two years covering systems (HVAC, plumbing, electrical), and ten years covering major structural defects.
Is it insurance-backed, or is it your company's promise? This distinction matters more than the years. Third-party products such as 2-10 Home Buyers Warranty and RWC are backed by insurance, so coverage survives if the builder's entity dissolves. A warranty that exists only as a builder's commitment is worth exactly what that builder is worth in year eight.
Is it transferable if I sell? A transferable warranty is a genuine asset at resale.
Who do I call in year two, and what's the response time? Ask about the actual process: who receives the call, what the documented response window is, and how repairs get scheduled. Then ask an older reference whether that process worked.
One piece of context worth knowing: North Carolina sets a six-year statute of repose for construction defect claims under NCGS 1-50(a)(5), running from the later of the builder's last act or substantial completion. Some contracts attempt to shorten your window to bring claims. Watch for that language.
Questions About the Build Itself
Who are your primary subcontractors, and how long have you worked with them? Long-standing subcontractor relationships are among the strongest quality indicators available. Crews who have worked with a builder for fifteen years know the standard expected of them.
How do you approach energy performance? Ask about insulation strategy, air sealing, blower door testing, HVAC sizing methodology, and whether the home will be rated. Energy-efficient construction costs more upfront and is effectively impossible to add later.
How do you handle design, in-house or through an outside architect? A design-build firm keeps design and construction under one contract, which typically means budget reality enters the conversation during design rather than after. Design-bid-build separates them, which offers independence but can produce a beautiful set of drawings nobody can build for your budget. Neither is wrong. Know which you're getting.
What do you know about my specific lot? Site conditions drive cost more than almost anything else. In Orange and Chatham counties, many lots require wells and septic systems, which means perc testing and soil evaluation before a design is finalized.
Slope, rock, tree protection, watershed rules, and stormwater requirements all vary by jurisdiction across the Triangle. A builder who has worked in Chapel Hill, Pittsboro, and Durham knows which questions to ask each inspections department.
Red Flags When Hiring a Home Builder
Any single item may have an explanation. Several together mean walk away.
The license name doesn't match the entity on the contract, or the license tier won't cover your project value
Certificates of insurance are slow to arrive, come forwarded by the builder rather than from their agent, or show coverage expiring mid-project
Pressure to sign quickly, or a discount that expires
A large deposit demanded upfront, well beyond a reasonable mobilization amount
Reluctance to work from a detailed written contract
A discount offered for paying cash
An allowance schedule that is vague, verbal, or unavailable
A clause waiving the implied warranty of habitability, presented as routine paperwork
Refusal to provide lien waivers
Only recent references available, or none from completed projects
A bid dramatically below every other bid, usually a sign of low allowances, thin scope, or a plan to recover through change orders
Dismissiveness when you ask detailed questions
That last one is worth weighting heavily. You are about to spend a year or more in close communication with this company. If asking careful questions produces impatience now, it will produce worse later.
The Custom Home Builder Checklist
Print this, or bring it up on your phone. Work down the list in each meeting and note the answers while they're fresh. Comparing written notes across three builders is far more revealing than comparing impressions a week later.
Before You Meet
License active on NCLBGC database
License entity matches the contract signer
License limit covers my project value
No disciplinary orders on record
Years operating under this entity name
The Company
GL and workers' comp certificates, sent by their agent
Coverage runs through the build
I'm listed as certificate holder
Subs carry their own coverage
Builder's risk insurance: who carries it, what limit
Day-to-day project manager, by name
Concurrent homes under construction
Site visit to an active build arranged
References from three to five years ago
Asked references what went wrong
Primary subs named, years working together
The Contract
Fixed-price or cost-plus: which, and why
Draws tied to milestones, not dates
Implied warranty of habitability not waived
Lien agent designated
Signed lien waivers with every draw
Change orders in writing before work starts
Excusable delays defined
No clause shortening my claim window
Attorney reviewed before signing
Allowances
Full itemized allowance schedule, in writing
Allowances match my finish level
Specific products or suppliers named
Credit confirmed if I come in under
Written exclusion list received
Bids compared by allowance, not total
Warranty
Written express warranty, 1-2-10 terms
Insurance-backed, not an in-house promise
Transferable at resale
Year-two contact and response window
Response process verified with a reference
The Build
Energy: air sealing, HVAC sizing, blower door test
Design in-house or outside architect
Perc test and soil work if well and septic
Slope, rock, trees, watershed, stormwater checked
Builder has worked in my jurisdiction
Walk Away If
License name doesn't match the contract entity
Insurance certificates slow to arrive or expiring
Pressure to sign, or an expiring discount
Oversized upfront deposit
Resists a detailed written contract
Cash discount offered
Allowance schedule vague or verbal
Implied warranty waiver in the contract
Won't provide lien waivers
No completed-project references
Bid far below all others
Impatient with detailed questions
Frequently Asked Questions
What should I ask a custom home builder first? Verify the license before anything else. In North Carolina, confirm through the NCLBGC that the license is active, held by the exact entity signing your contract, and carries a limitation that covers your project value. Then ask for current certificates of general liability and workers' compensation insurance.
What questions should I ask before building a house? Beyond the builder itself, ask about the allowance schedule, the contract type, the draw schedule, the change order process, warranty terms, and who supervises the site daily. Then ask about your specific lot, since site conditions are the most common source of unexpected cost.
How do I know if a builder's bid is realistic? Compare allowance schedules rather than bottom-line prices. Two bids $100,000 apart often reflect different allowance levels and exclusions rather than different construction costs. Ask each builder to price the same specified selections.
Does North Carolina require a home builder warranty? No statute requires one. State courts recognize implied warranties of habitability and workmanlike construction, but these can be waived by contract. Most reputable builders also provide an express written warranty, commonly on the 1-2-10 structure.
How long should a custom home take? Highly dependent on size, site, and permitting jurisdiction. Most Triangle custom homes and large renovations run roughly 10 to 16 months from design to completion, including architectural planning, permitting, selections, and construction. If a builder promises a substantially shorter timeline, ask them to walk you through the schedule in detail.
The Questions Are the Easy Part
Any competent builder can answer all of this. What you're really assessing is how they answer: whether documentation appears when you ask for it, whether the response is specific or general, and whether careful questions are welcomed or deflected.
Will Johnson Building Company has built custom homes and managed large-scale renovations across Chapel Hill, Durham, Raleigh, Cary, and Pittsboro for more than thirty years, working as a family-owned design-build firm so design and construction stay accountable to the same contract. We're glad to answer every question on this page, and we'd encourage you to ask them of everyone you're considering.
Get in touch with Will Johnson Building Company to start the conversation.
This article is general information for homeowners and is not legal advice. Construction contracts are binding documents with significant financial consequences. Have an attorney experienced in North Carolina construction law review any contract before you sign it.