People looking to build a home are concerned. And rightly so. Because according to ASIC, a staggering 1,400 Australian building companies collapsed in the second half of 2023.
Experts say rising interest rates, increasing material costs, and a shortage of workers has created the perfect storm.
Regardless of the reasons, these business failures have left tens of thousands of staff without work, contractors out of pocket, and worst of all, thousands of homeowners without the homes they’ve paid for.
Here’s how to be sure your builder is financially stable, reliable, and capable of finishing your home on time and budget.
Recommendations
Nothing beats an enthusiastic recommendation from someone you trust. If any family or friends have built a house recently, ask them about both their experience and the end result. What things surprised them, delighted them, and disappointed them. And most importantly, if they were building a house today, would they go with the same builder or would they research other options.
References And Past Projects
Most builders include testimonials and case studies on their website. But don’t stop there – ask if you can speak with these people (you may even be able to see their homes in person). Also ask for a list of suppliers and contractors you can speak with. The way a builder treats their trades and suppliers tells you a lot about how they probably treat their customers.
Independent Reviews
Search for reviews (and complaints) online. But don’t take them at face value — read between the lines. Just because someone is gushing with praise doesn’t guarantee you the same experience. Likewise, one or two negative comments shouldn’t put you off. More important than the comments are the replies from the builder. Did they express gratitude for positive comments. And did they respond professionally to negative comments, with an apology or explanation, and a desire to seek a resolution?
Insurances and Associations
Reputable builders are registered, fully insured, and belong to a professional network. Ask for proof of these things.
Transparent Comprehensive Contracts
Too many building contracts have more fine print than specific details about your project. Before you sign anything, make sure it has all the details including a fair, fixed price so you know exactly where you stand.
Price
Nothing comes for free. As much as you will want to believe a cheap price is genuine, you know it’s probably too good to be true. It may also indicate the builder is a little too keen for your business and needs your deposit to pay current bills.
Likewise, if the price is over-the-top high, you can reasonably suspect the builder doesn’t want your business and potentially doesn’t have the time to give you the attention you deserve.
The safest price is usually the one around the middle or slightly above.
Systems
Building a house is a complicated endeavour involving hundreds of tasks performed by dozens of trades. Keeping everything on track requires meticulous planning and detailed systems. Ask to see your builder’s systems. If they don’t seem up to scratch, you can rightly question their ability to finish your house on time and on budget.
Start Date
While it’s a good idea to plan ahead, it’s not advisable to commit to a contract with a start date that is more than a year ahead. Volatility in building material prices may mean your builder is forced to build your home at a loss, issue a significant variation that you have to pay for, or in the worst case, cause them to go out of business.
Instincts
Building your dream home is one of the most significant financial and emotional investments you will make in your life. While you don’t have to be best friends with your builder, you need to feel a common connection. A confidence that they understand what you want and will deliver as promised. If they seem to tick all the boxes but you still feel uneasy, trust your gut. Don’t sign. And keep researching your options.
Free Advice (And Proof Of Reliability And Stability)
Whether you’re just starting to plan your new home, or you’re already talking with designers and builders, we invite you to grab this practical guide to building your custom home in Victoria.
THINKING OF BUILDING A NEW HOME?
How to get the result you want and great memories from building your luxury custom home.
In this free guide, you’ll discover exactly what you must know – based on over twenty years of knowledge and experience from a reliable and stable builder.
