The six most important factors when choosing a builder for your new home

Choosing a builder for a new home can be time-consuming, but it’s time well-spent considering the amount of money involved.

There are several important factors you should take into account before making a decision.

1. Price and budget

There are specialist builders for first-time buyer homes, mid-range project homes, top-end custom designs, and for the very high budget there are luxury builders.

There is 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.

2. Reputation and references

Many clients want the perceived security of a household name, with the company’s volume of completed homes guiding their choice.

It is very important to read reviews and speak to past or current clients before you sign. A good builder will have no issue with letting you speak to customers and they should be able to supply good, verifiable references.

3. Financial stability

In today’s highly competitive market, builders are cutting prices to keep busy. That looks good on paper, but cut prices are not sustainable in the long term because every business needs to make money to remain stable into the future.

You may have got the best price in town, but if the builder is not around to build for you it’s a very hollow victory.

A credit reference can be sourced from any number of online agencies.

It’s not a guarantee to performance, but it’s one of the best sources of information about the financial strength of a company. Pay particular care to check if the company pays its suppliers on time and if it has a good rating in the industry.

4. Home style and preferences

Many builders specialise in certain styles. If you are building a complicated, undercroft three-storey home, don’t choose a small-project home builder who specialises in single-storey display homes.

They probably won’t have the staff or trades to move onto a complex construction.

Similarly, if you are 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 have never built the one you want.

5. 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 are 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 will add a contingency in case he needs it.

You don’t want to pay for a builder’s nervousness, so find a company that’s happy and well-represented in the area you want to live in.

6. Personality and working relationships

Think about the relationship you want to develop a relationship with the builder.

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 want to be involved in the project, a small builder may provide a more personal service. You may even be dealing with the owner of the company and this can give complete reassurance.

On the other hand, if you are 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.

It’s vital to get 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.

A good building broker can help guide you in decision-making, explain unfamiliar terms and conditions, advise what to sign and when and make sure the choice of builder fits your brief.

Paul Cheverall is the managing director of Home Builders Advantage.