There are several types of contracts that you will come across in your search for a custom home builder. The first is the Preliminary Agreement.
As the name infers it is between you and the custom home builder that you start with prior to making your final selection of the home builder to do the job. The basic idea is that you can have a custom builder assist you with the site selection, home design, costing, loan applications and building approval process.
If you continue with that custom home builder the cost for these preliminary services are generally included in his or her cost estimate.
If at any point you feel that a different builder would be a better fit, you could cease working with the builder and pay the agreed upon fees for the services provided to that point.
The other types of contracts are a General contract. The builder oversees and coordinates all aspects of the job with this type of agreement and is responsible for hiring and coordinating all subs, deliveries, inspections etc. Your roll as the home owner would still involve making all changes or decisions but the builder would relay that information to the crews on site.
A Construction Management contract is the shortest and least complicated. It requires more time and effort on the part of the buyer.
Contracts will typically include: