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How to choose a builder

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Now that you have your land it's time to build your dream home. To help you achieve your dream you will need a builder.

When you decide to build a home instead of buying, as well as finding a low-rate construction loan, you'll have to find a builder you can rely on.

Searching for the right home builder can be a daunting task because it not something you often do. So to help you selecting and engage the right home builder, here’s a list of tips:

Ask for a detailed quote

When building a home, price is hugely important. Make sure to ask for a detailed quotation. It will be a helpful tool when you compare builders and lets you assess what different builders include in their service and what's available for your budget.

A detailed quote is not only a document that tells you what the price is going to be. It is also something that gives you a good indication of the level of detail the builder has gone to put the pricing quote together.

A lack of detail in a quote can also be a red flag to potential trouble with a builder. As a general rule, ask for detail and itemisation in the quote.

What this means for you is that you will also have to invest serious time and effort into communicating to potential builders exactly what it is that you want.

Rather than saying same thing over and over again, some people put together a detailed document which outlines (often room by room, finish by finish, etc...) the detail around what they want, and then use this as the basis to get a builder to quote.

This 'specification' document can even sometimes form part of the formal building contract between you and the successful builder. Detail and strong proactive communication are key here.

Look for experience and credentials

Renovating a home is different from building a new house. Look for home builders who have relevant experience and credentials for your specific home project.

Are you planning on adding a terrace to your house? Are you building a green home? Some builders are experts in renovating bathrooms or kitchens and some are experts in building whole houses. Some specialise in timber houses while others build predominantly with brick and block.So make sure that you check their past work to look for similar experience.

Before hiring a tradie, make sure that he/she can show you examples of their previous work. Treat these as their resume or portfolio. If possible, ask if you can see their past projects first hand. This way you can get a real feel for their work.

 If a family or friend recommended the builder to you then you can have some confidence they are okay. But if not, a good option is to ask them for references from their previous clients.

You can ask clients about their experience with the builder, the quality of their work and whether the builder constructed the house within the expected timeframe and budget.

A proven track record is always a good reassurance if the tradesperson is the perfect fit for your home construction or renovation project. If the builder can’t provide any references, that can be a huge red flag.

Check their insurance and warranties

Does your home builder offer a structural warranty for their work and have home builder’s liability insurance? Do they also have personal builder’s injury insurance for their workers?

You want your tradie to be insured if an unfortunate event happens so you can protect yourself and your home. Keep in mind that there are many types of insurance out there, so better check if the insurance is adequately covered. Knowing the level of the coverage of their insurance and warranty can give you peace of mind just in case something goes wrong during the project.  

Builder’s warranty insurance will protect you as a homeowner if there’s a problem in the construction of your house. It will protect you against incomplete or defective work in the event that the builder is unable to complete the work (eg. disappears, goes bankrupt, etc.).

For more information about builder’s warranty insurance, you can visit the website of your state's building authority or building commission.

Get to know their timeline

An experienced and professional tradie should be able to give you a realistic timeline for the project. They should be able to discuss with you how the home renovation will go, not just before it starts but also during and after the renovation. 

Some builders take on several projects at a time and run them simultaneously. If you already have an eye on a good builder, get to know their timeline so you’re confident that they can build your home in a reasonable timeframe.

Whilst there will always be variables outside of the control of the builder (i.e. rainy days can slow work on a construction site to zero), ideally you do want a builder who is confident enough to not only give you a timeline of when they can start, and how long it will take them to complete the project, but also to give you the added assurance of including liquidated damages terms into your building contract.

These terms put the onus back on the builder to actually deliver the project on time, and if they don't, the agreement lets you recoup (usually by a specific amount per day) an amount of the money designated in the contract from the builder.

 Don’t be afraid to ask questions

It is a good idea to find out as much as you can about your prospective builder before you commit to them. Don’t be afraid to ask questions regarding their profile, experience, and work. There is no such thing as a stupid or inappropriate question when your dream home is on the line.

Building a house is a major project which requires you to make the critically important decision of picking a good builder. It is not an exaggeration to say that the success of most home construction projects is based on the quality of the builder and the ability of the owner and that builder to establish a mutually respectful and productive working relationship.

Read the contract

Lastly, always read the contract. Find out exactly what’s included and excluded in the costs. Always make sure that you fully understand the contract to avoid unexpected mishaps. This will help you down the road should any complications arise and save you time, money and stress.

Are you thinking of building your dream house, but don’t have any idea how to finance your dream home? A construction loan may be the perfect financial option for you.

Take time to do your research, so you are confident that you have a competent and trustworthy home builder.

You can start your journey towards building your dream home today by researching one of our great construction loans!

About the article

As Australia's leading online lender, loans.com.au has been helping people into their dream homes and cars for more than 10 years. Our content is written and reviewed by experienced financial experts. The information we provide is general in nature and does not take into account your personal objectives or needs. If you'd like to chat to one of our lending specialists about a home or car loan, contact us on Live Chat or by calling 13 10 90.

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