Choosing a New Home Builder

Once you know your budget you will need to choose a new home builder that can build your home in your price bracket but take into consideration the types of homes they build, quality, speed, communication, etc.

Different types of New Home Builds

There are different types of builders generally classified into 4 groups

  • Project/volume builder who has a number of floorplans and facades to choose from
  • Project/volume builder who offers above as well as full custom builds
  • Custom builder who builds according to newly designed plans
  • Owner builder – These are people who generally have experience in the industry and manage the build themselves

You have a choice of a custom or project/volume builder. There are a few project/volume builders who also do custom. This doesnt go into the pricing of them but rather how to identify one that you want to work with.

Project/Volume Builder

Choice of floorplans and facades

  • Multiple display homes available to view (caution, they include lots of expensive upgrades)
  • Modifications to the floorplans are generally possible. Most of the time anything except for the staircase can be altered.
  • Manages everything from start to finish incl. CDC or DA
  • Build 100’s to 1000’s properties per year.
  • More often than not have high attrition rate between sales reps, Customer Service Managers (CSM) and Site Supervisors.
  • Lengthy admin times, almost all sales reps arent honest about this. Dont trust their timelines, get feedback from others building with them.
  • Build quality is hit and miss though there are some good ones.
  • Franchise models in some cases like Adenbrook, GJ Gardner, Hotondo so each franchise can perform very differently.

Project/Volume Builder (Custom)

Choice of floorplans and facades

Build off bespoke plans

  • Same as Project/Volume Builder
  • Offer a design service through working with a building designer*. Cost can vary normally up to about 5k. Your design however is locked in with the builder and you cant use it elsewhere.
  • Alternatively bring your own designs from a building designer*. The builder can tender off these and then continue the process to get to CDC or DA approval. You may already have these however the builder may not credit much if you already have these, these could be anywhere from nothing to 4k to 13k.
  • Builds 10’s to 100’s of properties per year
  • Lengthy admin times but sometimes not as bad as pure project/volume builders
  • Attrition rates arent as high for Sales reps, CSM and Site Supervisors
  • Site Supervisors arent as stretched but this is hit and miss
  • Build quality is generally good

Custom Builder

Build off bespoke plans

  • Same as Project/Volume Builder (Custom) except they normally wont have standard floorplans to choose from
  • Build 15-20 builds per year, some much less than this.
  • Site supervisors dont manage more than 10 builds at a time, generally much less than this so quality is easier to manage

Owner Builder

Build off bespoke plans and manages the build themselves

  • Finance is unlikely and normally requires to be self funded
  • Savings from being hands on.
  • May not get the same pricing discounts as larger builders

Check out Architect Plans for more details on whats involved.

* Building designer can also mean architect or draftsman

Factors to consider between each group of builders

The following factors should be considered and these are discussed further below in more detail:

Initial Research

  • Floorplans on offer
  • Facades available
  • What modifications can be made. Some builder like Hoot (from Wisdom Homes) and Domain homes (from Clarendon) allow limited to no floorplan changes
  • Inclusions on offer

Initial Screening

  • Online presence
    • Reviews
    • Social posts
  • Communication
  • The types of builds the generally do ie. volume or custom
  • Pricing
  • How long have they existed for

Secondary screening

  • How many homes they build per year
  • How many homes their supervisors manage
  • Staff turnover
  • Standard inclusions
  • Infringements they have eg. NCAT judgements
  • Building licence
  • Building inspectors feedback

Builders Licence Check

Licence Suspended
Construction Business Start Date
Suspended Licence
Tribunal Order
No licence to build over 20k

Always check a builder licence as it can identify serious issues with the business. In NSW you can find this on Verify Licence. Some of the things to check are:

  • Check if the licence is active or suspended
    • 🚩 Red flag if its suspended
  • How long they have been in business for
    • 🚩 Red flag if its recent. In some situations they may do this to get insurance for another entity
  • History of issues.
    • 🚩 Red flags:
      • Licence suspended
      • Tribunal order – This can sometimes come up if there’s a dispute with the builder and where the local building body forces the builder to rectify an problem through a court proceeding
      • Licence condition – for contracts not requiring insurance through home building. This means the builder is not allowed to build houses. This is something you would find with smaller trades like an electrician.

Credit Checks

Resources that you could use to check the financial risk of your builder include:

  • CreditWatch – A free trial is offered but well worth paying for this if required as it can save you tens of thousands on avoiding a costly mistake. The risk score presented is alphabetically descending where A is the least risk. Credit enquiries presented are not completely relevant as they’re to do with business and trade. Pay particular attention to risk data of defaults, court actions and regulatory notices against the business.
  • Dun & Bradstreet – Similar to CreditWatch above.
  • Builders accountant – If the builder is willing, ask to speak with their accountant to understand any financial risks of the business.

Online Reviews

  • ProductReview – Although these are verified they don’t provide a good cross section of client feedback. One of the reasons for this is the following:
    • Positive Reviews – Could be solicited by the builder from people from people who had a good experience. These are also people who may not have had high expectations of the builder but that’s not always the case. Also carefully look at the people posting positive reviews as you can sometimes find similar messages from people who have just joined the site who have only posted one review
    • Negative Reviews – A client who is in the middle of pre-construction or recently completed their build will not be inclined to post a negative review as the builder can retaliate by adding extra costs, delays or not perform warranty fixes. The times where you will see this is when a client has pulled out of the contract or their fixes haven’t been completed. Those that also haven’t had a good experience might prefer to just move on and forget about the bad experience.
  • Google Reviews – Its not often used and many reviews arent that useful
  • Facebook Groups – This gives the most accurate view of people building with a certain builder. You can find general groups or specific ones. There are good discussions for all phases of the development as well as a good cross section of people who can provide feedback about the builder.

References for the Builder

Check out Great Sources of Information for building a New Home to get feedback about a builder through various sources.

Individuals who used the builder

Depending on yourself you may want to ask the builder for about 5 or more references from clients who are at various stages of their build eg. Those who are

  • Currently in the selections process – see how responsive they are and how quickly they are moving through this stage
  • In the middle of building – see how the quality of timeliness of their build is
  • Completed their build recently – see how the builder is managing defects or finishing touches after the final payment
  • Completed their build a few years ago – see how the builder responds to maintenance issues

Some questions to ask:

  • What are you building, custom or modified
  • Why did you choose them
  • How did you feel about their contract and the deposit required
  • How accurate have the Provisional Allowances been vs the real prices
  • Have you had variations after the deposit
  • What significant changes did you make after the tender deposit
  • What issues did you have with drafting
  • Have you had any issues since signing
  • How quickly did they deal with issues and did they provide a satisfactory outcome
  • What have their communications been like, do they return your calls, do they respond to requests in a timely manner, do they answer your questions
  • How was your experience with the selections process
  • What would you advise me to look out for in general
  • Do you feel they have been honest in their dealings with you
  • Have you spoken to others about their experience
  • Did you use an inspector and what did they say about he quality, and how would you rate them on this.
  • What maintenance issues have you had and how quickly were they dealt with and were they done to your satisfaction

Building Inspectors

Call a few different building inspectors to find out if they have inspected homes from the builder before at various stages. They will often have good insights into the quality of the construction.