The 78704 Builder Vetting Checklist

Developer Intelligence · August 2026

The short answer: Texas does not license residential homebuilders. There is no state exam, no registration, no board to check. That means the entire vetting burden sits with you, and it comes down to four things — lien and payment history, references from the last three completed projects rather than the best three, how the builder actually handles change orders, and whether they have real capacity right now. The portfolio is the least informative thing they'll show you.

On a 78704 project, you're committing somewhere north of two million dollars to a company that a stranger could have formed last Tuesday. Most builders here are excellent and many have been doing this for decades. But nothing external certifies which is which, so here's how to find out for yourself, in the order that actually matters.

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Start Here: Nobody Licensed This Person

The Texas Residential Construction Commission registered builders and set performance standards from 2003 until the Legislature let it expire on September 1, 2009. A replacement bill that would have moved licensing to the Texas Department of Licensing and Regulation failed to pass. Nothing took its place.

So today: anyone in Texas can call themselves a homebuilder. No exam, no minimum experience, no state registry to search, no license to suspend.

Two things do still apply. Specialty trades remain licensed at the state level — electricians, plumbers and HVAC contractors all hold credentials you can verify. And the Residential Construction Liability Act, Chapter 27 of the Texas Property Code, sets the framework for resolving construction defect claims, including a notice-and-opportunity-to-repair process before litigation. Worth knowing that exists. Worth structuring your project so you never need it.

One: Lien and Payment History

This is the check almost nobody runs and it's the most predictive one available.

A builder who doesn't pay subcontractors on time generates mechanic's liens, and those get filed in county property records. Search the county real property records for the builder's business entity name — and for any related entities, since builders sometimes operate through a series of project-specific LLCs. Check Travis County and, if the builder works across the region, Hays and Williamson too. Look at civil court filings while you're there.

What you're looking for isn't a single dispute. Any builder operating for fifteen years has one. You're looking for a pattern — multiple liens, repeat filings from different subs, litigation that recurs. That pattern tells you about cash flow, and cash flow problems are what turn into your project stalling at seventy percent complete while the framer waits to get paid.

Also check how long the entity has existed. A company formed six months ago being run by someone with twenty years of experience is fine. A company formed six months ago being run by someone with a six-month track record on a $2.5 million build is a different proposition.

Two: The Last Three, Not the Best Three

Every builder has three delighted clients they'll happily connect you with. That list tells you the builder is capable of a good outcome, which you already assumed.

Ask instead for the three most recently completed projects, in order, whoever they happen to be. A builder who provides that without hesitation is telling you something meaningful before you've made a single call. A builder who deflects, substitutes, or explains why a particular one wouldn't be representative has just answered a different and more useful question.

When you reach those owners, skip "were you happy." Ask what went wrong and how it got handled — something goes wrong on every build, and the answer reveals the builder's actual character. Ask whether the project finished when the builder said it would, and if not, by how much and whether they were told early. Ask what the final number was against the contract. Ask what happened when they called about a warranty item in month fourteen. And ask the one that gets the most honest answer: would you use them again, knowing what you know now?

Then ask for two subcontractor references. Subs know which builders pay on time, which ones run organized sites, and which ones they'd rather not work for. They're also less rehearsed than owner references.

Three: How They Handle Change Orders

The single best question you can ask a builder is this: what were the last three change orders on your most recent 78704 project, and what caused them?

A builder who answers specifically, without defensiveness, describing a concealed condition or an owner-driven change and how it was priced and approved, is showing you exactly how yours will go. A builder who says change orders are rare on their projects is either not being straight with you or hasn't built on a sloped 78704 lot with mature trees, and neither is reassuring.

Follow it with process questions. Does a change order require written approval before work proceeds? Is there a stated turnaround for pricing one? Does the builder's fee apply? What happens to the schedule, and is that documented at the same time? Ask to see a blank change order form — a builder with a clean standard form has done this properly many times.

Four: Capacity, Honestly Assessed

Ask how many projects they're running right now and who is physically on your site every day. On a 14 to 20 month build, that answer predicts your experience more reliably than the portfolio does.

There's no correct number. A builder running one project at a time may give you extraordinary attention or may lack the volume to hold good subs. A builder running six may have real infrastructure or may be spread thin. What matters is that the answer is specific, that a named person is accountable for your site, and that you meet that person before you sign rather than after.

Ask about their subcontractor bench too. Builders who use the same trades repeatedly get better work and better scheduling than those who bid every job out to whoever is cheapest that month. In a market where good subs are the actual constraint, that relationship is worth more than a lower headline price.

Insurance and Paperwork to Verify

General liability — request a certificate of insurance directly from the carrier or agent rather than a copy from the builder, and confirm coverage limits and that the policy is current for your build window.

Builder's risk — covers the structure during construction. Confirm who carries it, who is named, and what happens in the event of fire, storm or theft on site.

Workers' compensation — worth particular attention in Texas, which is unusual in allowing private employers to opt out of the workers' compensation system. Ask whether the builder carries it and whether their subcontractors are required to. If nobody does, understand where liability sits if someone is injured on your property.

Lien waivers — ask how the builder handles them at each draw. Conditional waivers from subs and suppliers as payments go out are what protect you from paying twice for the same work.

Warranty — what's covered, for how long, what the claim process is, and who answers the phone in year two. A one-year workmanship term is common with longer structural coverage. Ask a past client how the process actually went, because the document and the experience are not always the same.

Red Flags

A large deposit requested before any work begins. Reluctance to provide recent references, or substituting older ones. A bid substantially below the others with no explanation of what's different. Vague or absent allowance schedules. No written change order process. Pressure to sign quickly. An unwillingness to have the contract reviewed by your attorney. A pattern of liens in county records. Defensiveness when asked routine questions about process.

Any one of these might have an innocent explanation. Two or three together is a pattern, and patterns in this business are reliable.

Frequently Asked Questions

Do home builders need a license in Texas?

No. Texas has not licensed or registered residential homebuilders since the Texas Residential Construction Commission expired on September 1, 2009, and the bill that would have transferred licensing to the Texas Department of Licensing and Regulation failed to pass. Specialty trades — electricians, plumbers, HVAC contractors — do remain licensed at the state level. Because there is no builder license to verify, owners must perform their own due diligence.

How do I check if a builder has liens against them in Texas?

Search the county real property records for mechanic's and materialman's liens filed against the builder's business entity, and check civil court filings in the same counties. Search related entity names as well, since builders sometimes operate through project-specific companies. A single dispute is normal over a long career; a repeated pattern of liens from different subcontractors indicates cash flow problems that can stall your project.

What questions should I ask a custom home builder's references?

Ask what went wrong and how it was handled, whether the project finished on the promised schedule and whether delays were communicated early, what the final cost was against the original contract, how warranty requests were handled after move-in, and whether they would use the builder again knowing what they know now. Request the three most recently completed projects rather than the builder's chosen references, and ask for subcontractor references as well.

What insurance should a Texas home builder carry?

At minimum, general liability and builder's risk coverage, verified through a certificate of insurance obtained directly from the carrier or agent. Workers' compensation deserves specific attention in Texas, which permits private employers to opt out of the workers' compensation system — confirm whether the builder carries it and whether subcontractors are required to. Also confirm how lien waivers are handled at each draw.

Choosing a Builder for a 78704 Project?

The Davis Agency works with the builders active across Barton Hills, Zilker, Bouldin Creek and Travis Heights and has seen how their projects actually go — not just how they photograph. If you want a shortlist that fits your lot, your budget and how you like to work, that's a conversation worth having early.

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Derrik Davis · Broker/Owner, The Davis Agency · CLHMS Certified · TREC License #558841 · Serving 78704 and the greater Austin luxury market since 2006. This article is general market commentary and is not legal advice. Have any construction contract reviewed by a qualified Texas construction attorney, and verify insurance and licensing status independently.