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One of the toughest decisions you will make when building your home is selecting the right builder for your home build. Research by REA shows that 1 in 2 people say that price is a very important factor in their decision making process.
While price is important, it’s also important to understand how that price is made up and the different sales strategies that builder employ. I hear a lot of people saying to me “we want value for money” when they really mean: we just want the cheapest possible price.
You must understand, as a client, if you are making decisions solely based on price then what do you think the builder will do? They will provide you with a cheap price to lure you in and once you are locked in, then will increase the price.
While I do not agree when builders do that, I certainly understand why they feel obligated to conduct their business in that manner. It is really tough when you get 1000’s of people coming at you every day saying that the next builder can do it at $50,000 cheaper.
BUT if you pay peanuts, you get monkeys. When you are so focused on paying the cheapest possible price, you tend to get into a lot of trouble. The builder can:
- provide you with a low upfront price and then hit you with variations once you are locked into a contract OR
- takes shortcuts in building your home OR
- use the cheapest possible materials and labour OR
- do whatever else to keep the price as cheap as possible so you can say yes to them
People tend to get as many build quotes as possible. A Quote is NOT a Tender. There is a massive different between a quote and a tender. So obtaining 10 quotes to try and work out the cheapest builder is not the right way of doing things.
Some builders will quote really cheap while other builders will be more conservative and go heavy on their quotes. This does not mean that one builder’s pricing is better than the other. It actually means nothing!
The 6 Tips
Here are the 6 tips to choosing the right builder for your next home build:
- always work with people that know their stuff
- an expert can save you hundreds of thousands of dollars, time and effort
- work with people who genuinely want to help
- if they come across as selling to you, that’s ok. BUT is it from a place of helping you or just to manipulate and push you into doing something you don’t want to do?!
- work with people who are responsive and follow you up consistently – it means that they are keen on your business
- ask for references
- read their reviews online and contact the reviewers – look at Facebook, ProductReview, google review, etc…
- every business will have good and bad reviews – read the bad carefully and see if there is a consistent pattern
- please refer to the type of builders blog to get a deeper understanding of this
- different builders price differently, include different things and exclude other things
Quotes vs. Tender
- getting quotes is a good start
- if the quote is outside your budget, but the builder ticks all the other boxes, then get them to either give you a fixed price to know for sure OR have them check other quotes compared to theirs to give you some perspective
- understand that a calculated tender price is your ultimate goal
- work with builders that offer fixed pricing
- if they cannot fix the price, they should be transparent with the WHY
- stay away from provisional allowances – they are a trap
The factors to consider for such a big decision are numerous but my most important advice is to talk to an expert that you can trust and work with. This will go a long way to helping you make the right decision.
Remember that it’s impossible to 100% compare builders on an apple to apple basis!