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An owner builder is an individual or family that takes charge of the remodeling or new construction of their home.
In Britain or Australia, this individual or family is often referred to as a self-builder. In America, owner builders are defined primarily by their willingness to become personally committed to coordination and control of designing and building for their residential project.
An owner builder is a homeowner that is contracting their own homebuilding or other construction project rather than hiring a licensed general contractor. Owner builders manage the building schedule and take on all the responsibility and liability that would normally fall on the general contractor.
This personal commitment may take many forms; however, the most distinguishing feature of an owner builder is taking legal responsibility for hiring a team of workmen to complete their project. Saving money is best achieved by assuming legal responsibility. This leadership role is the defining characteristic of an owner builder.
An owner builder acts as the general contractor on the building project, hiring individual sub-contractors (excavation, carpenters, etc....) to complete the work needed. It is possible, though not necessary, for owner builders to complete part of the work themselves. This is referred to as "sweat equity". Money saved by substituting hired tradesmen with self work is paid for in "sweat". This is often discouraged unless the owner builder has trade experience. The additional time it takes to do trade work can diminish the owner builder's capability to manage the project effectively.
Owner building advocates claim that up to 40% of the cost of a home can be saved. Building one's own home is quite demanding, though, and requires time, patience and skill.
In order to obtain financing, a bank may require a builder of record or "straw builder" sign on the construction loan documentation. The owner builder negotiates a contract and terms with a builder of record.