Table of Contents
There are so many different types builders, which makes it very difficult to almost “pigeon hole” each of them into a category of sorts. The point of this exercise is not to do that, but rather categorize them in a general way to make it easier for you to compare and select the right builder for you.
The 4 Types
Project Home Builder
These are builders with display homes who have a range of home designs for you to choose from. They have a “standard” level of inclusions along with some promotions (or not) that they offer you to upgrade your home.
They are geared towards providing you with fixed pricing (although not all of them do this upfront). These builders are “generally” the most cost effective among the four types.
Small Home Builder
These are non-project home builders do not have a display home. They may have a “standard” level of inclusions and maybe some promotions (unlikely).
They do NOT give you fixed pricing and they do not enjoy the buying power that a project home builder has. These builders are certainly more expensive and most uncertain around their pricing which is very scary.
Having said that, on face value they seem very cheap with loads of inclusions. However they operative keyword here is face value. Here is a really good blog with more information on building with small builders.
It’s important to note that obtaining a builder’s license is not a hard exercise. Given that the barrier to entry in our industry is so low, you will tend to find a lot of low quality operators. It’s no wonder you hear horror stories with builders going broke, not returning calls, not completing builds, etc…
This is also exacerbated during tough economic times. Data suggests that the bigger and more financially sound builders gain more market share compared to small builders.
A big factor to this market share shift is the fact that many small builders go broke and their “market share” is simply transferred to the bigger more stable builders.
Now I am not suggesting that all big builders are great and will not go broke (I hope bloody not). All I am saying that the chance of a small builder having problems is higher compared to a bigger builder.
Custom Home Builder
These builders will build whatever you want from scratch. They don’t have any “standard” level of inclusions so they price based on what you want. They may or may not have a display or may even have a showroom. Price is not an issue here!
Hybrid Home Builder
These hybrids (I made up the name) are basically a combination between custom builders and project home builders. These builders have many attributes in common with the other categories as well as some unique ones. They generally:
- have a display home or several
- provide you with a range of standard home designs
- allow you to customise / modify their homes
- allow you to customise a home from scratch
- provide you with a fixed price (not all of them)
- have a standard level of inclusions
- have the flexibility to provide you with any level of inclusions you want
It’s really important to select the type of builder for your build rather than just the builder who provides you with the cheapest possible price. You might like a builder, their designs, pricing, etc…, but if they are not geared towards your type of build, then you are setting them and yourself up to fail.