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How Do I Choose A Builder?
Key Tips You Need To Consider
Doing a new build soon? Then you’ll be needing a Builder.

But don’t just pick the first available Builder – it has to be someone you can trust.

A ‘speculative’ build can be a relatively low risk strategy: pick up a block of land, add a house to it and then sell it as a finished product. But to limit the time frame and maximise your profit you need to feel confident your Builder is at the top of his/her game.

You’ll want to find someone who is easy to deal with and good at problem solving. Because there will always be problems!

There are two main choices: Project Builders and Custom Home Builders.
Project Builders

A project builder can be a good option. They’re likely to be experienced and chances are the builder has a finished home in a display village that you can visit. You’ll be able to check out the house designs, the quality and the price points.

Generally speaking a project home tends to cost less and go up faster than a custom build because they’re designed and built to a set formula. This means there are certain economies of scale across the materials used, the construction systems and the tradies. The project home builder knows exactly how much it will cost to build because he builds dozens of the same (or similar) homes every year. They tend to have all of their roof trusses and wall frames prefabricated off site so they can bring them onsite and throw them up like a Lego assembly line.

But be wary of the “bait and switch” strategy used by many project builders. This is where the brochures and display homes lure you in with great finishes like stone benchtops, timber floors and established gardens but these are usually optional upgrades that can push the price of a standard home design way up.
Custom Builders

The advantage of going for a custom builder is they will build a house that has been designed just for you and your block of land. This is really useful if your block has an awkward shape, a tricky elevation or is very small or narrow. A custom build tends to be built in situ and takes into consideration all of the issues and challenges of that particular site.

So how much extra would you pay to get a custom built house? Well, how long is a piece of string? House builds come in all shapes and sizes and the cost per square metre can range from $800 for a very basic design to $10,000 for a top, luxury build.

You’ll also have the additional cost of an architect or draftsperson to design the house, so the dollars can add up pretty quickly, but you’ll end up with something that's going to be unique.

At the end of the day, it comes down to your projected final value and whether you can still make a profit in spite of the extra expense, and also, what does your target market want (and expect).

And that means understanding the demographics of the area you’re building in, and making sure you build a house that suits that demographic. There's no point building a two-storey mansion when the demographics of the area are retirees looking for single-level living. Equally, you’d be mad doing a single storey home if you can get a much larger house with a view and there’s a market for that.
Getting Quotes

Make sure that when you're asking a number of builders to provide quotes that they’re all quoting on the same thing.

You’ve probably heard the term turn-key. That’s when a property is ready to move into when the builder finishes, complete with window furnishings, a driveway, landscaping and a letterbox.

Often you’ll get a builder who quotes a turnkey price, and a builder who quotes on a house without the final fittings and with zero landscaping. And one of the common mistakes people make is to do a direct comparison of these quotes and opt to go with the cheaper guy who hasn’t provided a clothesline or any light fittings.

So make sure you're getting a quote that is an all-inclusive, turn-key solution.
A Checklist To Narrow Down Your Shortlist

It helps if the builder is familiar with your area and regularly builds the kind of home you’re after. Scour all of the project home and display home villages to find designs that actually suit your strategy and your block. If a builder has a turn-key solution that works chances are they'll be shovel ready in no time flat.

Make sure your shortlisted builders are qualified and licensed to do the job. You can check quickly and for free on the Fairtrading website. If their license has expired or there is a dispute recorded, you’ll probably want to avoid using that builder. You can also check if the builder belongs to a professional industry body like the Master Builders’ Association or HIA. It’s a good sign if they do, because those associations can help out if a problem comes up during the build.

Read reviews and call referees. Have a list of questions prepared that covers whether the builder finished on time and budget, if he was easy to work with, if he left the site tidy and safe at the end of each day and if there were any complaints from neighbours.
Ask about their preferred contract. Some builders will only do a cost-plus contract, which means the final cost is open-ended. We want to avoid these like the plague, because to succeed in property development you need to have a firm handle on costs up-front.

Once you have figured out your build timeline, you’ll need to ensure the builder will include a liquidated damages clause into the contract. This is the compensation a builder has to pay you if they are running late on the job, and you’ll want to ensure the daily figure is enough to cover your daily costs should the build run over, as often it does not.

If they won’t include liquidated damages, find another builder. If they can't back themselves to build inside the timeline promised within the contract, then they’re not somebody that you want to bank on.

The main role of your builder is to co-ordinate the building works as project manager, supervising all the trades, ordering materials and providing quality assurance throughout the process.

Your choice of builder will make all the difference to your bottom line, so do your research and take your time to find the best fit for your project.
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