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The 12 most important factors when choosing a builder for your new home.
The 12 most important factors when choosing a builder for your new home.
July 2024 in Money Matters
Choosing a builder for a new home can be time-consuming, but it’s well worth the effort considering the amount of money involved, because making the right choice for you will directly influence not only the build quality of your home but also your enjoyment of the whole process.
Here’s a few pointers that will help you decide which builder is right for you.
- Visit and tour new homes and display villages in your area.
Start by looking at new homes and display villages in and around the suburbs where you want to live as this is a chance to explore homes constructed by builders who work in your area. Display village homes are also typically furnished and can provide some great ideas and inspiration around what designs might work best for you.
- Make a list of home builders in your area.
Once you’ve settled on what type of house you want and where, the next step is to create a list of potential builders. You can obtain a list of builders who construct homes in your area from industry organisations like the Housing Industry Association (HIA) of the Master Builders Association Victoria (MBAV). Or review the real estate section of your local newspaper to learn which builders are active locally, the types of homes they’re building, and the prices you can expect to pay.
Once you’ve compiled a list of potential builders, it’s time to start learning a little more about them.
- Look at other houses they’ve built.
First up, take the time to look at what work they’ve done. Every professional home builder should be able to show you a wide selection of homes they’ve built. When examining a home, make sure to look at the quality of the main features. Inspect the quality of the construction materials, cabinetry, carpeting, trim-work and paint. And don’t hesitate to ask questions about the work’s quality or craftsmanship. What seems like an insignificant question might yield a meaningful answer. A professional builder or their representative should be able to answer your questions thoroughly.
- Do your due diligence and check out their reputation and references.
Equally, it’s important to ensure your builder has a good reputation. Many customers like the perceived security of a household name, with the company’s volume of completed homes guiding their choice. But it’s always important to read reviews and speak to past or current clients before you sign.
Any high-quality builder should be ready to provide you with the names and phone numbers of satisfied customers. If they can’t, consider that a red flag and walk away. When reaching out to former clients, ask about all aspects of the project. How well did the builder follow through on the initial plans? Did the builder meet their expectations with the main features, build, budget, and timing? Would they hire that builder again if they could do it all over?
It’s also worth checking with local real estate agents about which builders they would recommend based on their knowledge of what is selling/not selling in the area. Likewise, ask friends and relatives about builders they’ve dealt with directly or ask them for the names of acquaintances who have recently had good experiences with a builder.
- Ask the builder about their experience.
A builder will usually share how long they have been in business. Longevity suggests financial stability, which is necessary for the home builder to complete the job and still be available if problems arise after the job is finished. Also, the more homes the company has completed, the more expertise the builder will bring to your project.
Building a home is a complex activity. A professional builder should also be familiar with the construction standards, proper materials, the process from start to finish, new technologies, and have a deep understanding of the minor details and various tools essential to constructing a quality home.
- Make sure this includes the homes style and preferences you want.
Many builders specialise in certain styles. If you’re planning on building a complicated, two-storey home, don’t choose a small-project home builder who specialises in single-storey display homes as they probably won’t have the staff or trades to move onto a complex construction. Similarly, if you’re very eco-friendly and want a lot of sustainable features, look for a specialist builder who has experience in that area.
If you have a particular type of home in mind, ask the builder how many homes they have built in that style. The company may have a beautiful portfolio of drawn designs, but never have built the one you want.
- Also satisfy yourself that your builder is financially stable.
The past couple of years have seen the collapse of a number of builders and construction companies. So it’s worth checking the current and ongoing financial viability of your builder upfront. You also want to make sure they will be around after the construction is complete to service any warranties.
A credit reference can be sourced from any number of online agencies. While it’s not a guarantee to performance, it is one of the best sources of information about the financial strength of a company. Also pay particular care to whether the company pays its suppliers on time and if it has a good rating in the industry.
- Ask for a copy of the builder’s contract.
A qualified reputable builder will provide a written estimate and a detailed contract for you to review before beginning the work. The contract should spell out what work will and will not be performed and provide a payment schedule. You’re not protected when something goes wrong if you don’t have a contract. Don’t hire anyone who tells you a contract “won’t be necessary.”
- Establish price and budget up front.
It’s important to understand how a builder works financially. Get all the financial questions out upfront. Educate yourself on the differences between each type of contract they offer – and which would work best for you. Ask the builder what type of fee structure they use: a cost-plus contract; a fixed-price contract; or another fee structure? The only structure that’s wrong is one that is not stated. Each structure has its advantages and disadvantages – get to know the differences. Discuss it openly with your builder and then do your own research.
Also consider the builder’s particular area/s of expertise. For example, there are specialist builders for first-time buyer homes, mid-range project homes, top-end custom designs, luxury builders etc. So there’s little point approaching a first-home builder to build a custom home because their budget, repeat design and business model will most likely prevent them from being able to be competitive in a one-off build. Similarly, a high-end home builder just won’t want to build a small home where their margin is smaller than a more luxurious product.
- Location
Most builders have a favourite area where their pricing is most competitive. So it’s wise to choose a builder that has a good sample of homes built in your proposed area. Building within a metro area is easier than outlying suburbs because everything is close to hand. Most people don’t like to say no to work, but leaning on a builder to go where they’re not comfortable can bring problems like extra costs and possible delays on site, because the builder has fewer options to rely on.
When putting a price together, a builder outside his area may also add a contingency in case he needs it. You don’t want to pay for a builder’s nervousness, so find one that’s happy and well-represented in the area you want to live in.
- Inquire about a home builder’s business practices
A professional home builder should be able to provide you with a copy of their business registration, accreditation etc and show proof of workers’ compensation and liability insurance. These critical elements will protect you from liability for job site injuries or property damage resulting from the work performed on your home.
- Can you work with them?
Last but by no means least, it’s vital to select the right builder for your project who will deliver what you want, for the price you want, and with the level of service you need.
Why? Because the builder’s personality and your working relationship with them is one of the most important factors that will influence your overall home building experience. So it pays to think upfront about the relationship you want to develop a relationship with them.
Clarify at the outset about how they plan to communicate with you during the home building process including frequency and method. How you communicate early on with each other will set the tone throughout the building process.
Some clients need to be present on site regularly and want to build up a rapport with the supervisor in charge. Most bigger builders change supervisors regularly and some clients can find that frustrating. If you do want to be actively involved in the project, a small builder may provide a more personal service. On the other hand, if you’re content to sit back and let things happen, developing a close relationship won’t be as much of a priority and choosing a builder for personal service is less important.
Trust your instincts. You should feel a sense of trust and confidence in your builder. Make sure you feel comfortable talking with them and asking questions; if your builder seems uncomfortable speaking openly with you, it may not be the right fit.
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