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Building a new home is a big investment. And as with any investment, you want a qualified individual or group to know exactly what they are doing so they can give you the best possible return on your investment. That’s why it’s so important to find a builder who has experience, knowledge and a good reputation.

Prospective clients regularly ask a number of builders to tender for their project on the assumption that they will get the best deal possible when choosing who they will appoint to complete their project. But the fact of the matter is, tendering has very little appeal to builders because the process can be very time consuming and costly to the builder. When a client chooses a tender on the assumption that they are the lowest bidder, it usually results in the dissatisfaction of the homeowner. This is because in the bid to get the job, corners can be cut by unscrupulous builders and the overall quality of the project suffers.

Avoiding the many problems associated with tendering and choosing the lowest bidder can be easily eliminated with basic research and credibility checks on your behalf. One of the best ways to get that information is to ask people you know directly who have hired a builder in the last few years. They’ll let you know exactly how they feel about the builder and give you a heads up about their strengths and weaknesses.

With the advent of the internet, it’s easy to compile facts and figures about various builders and the work that they have done in the past. It’s a good idea to use the internet to narrow the list of builders by location, specialties and abilities to ensure you get the best fit for your particular project.

Besides basic references, it’s also a good idea to check on prospective builders licensing and insurance through Fair Trading and by asking the builders you are interested in to provide copies of these documents. Always ensure your builder has the correct licence and insurance requirements before signing any agreements or contracts. A builder who is associated to local building organisations doesn’t necessarily mean they are a quality builder (speaking to past clients and seeing past & current work is the strongest reference), but it does show commitment to their trade and increases their knowledge about new building methods and materials.  In Australia the two best known organisations for builders to be associated with are HIA (Housing Industry of Australia) and Master Builders.

Once you’re set on a quality builder, negotiations can be made to find the best project design at a price that will fit your budget. This is a great way to still get the quality, reputation and service of a reputable builder that you’re sure will give you the quality home you want and deserve, while still getting the most affordable structure possible—all without the hassle and inaccuracy that tendering can sometimes create. 

Many builders work directly with architects and designers, allowing your home to be designed and built exactly to your specifications while remaining in a price range suitable to your budget constraints. Designers and architects should all fall under the same scrutiny that your builder did, so choosing one that has a reputation for quality, experience and customer service.  Choosing the right partners and designing and building your project with them is definitely the best way to ensure value for money and satisfaction with the final results at the end of the day.

Pros and Cons of Tendering for Residential Building

For any home owner the cost of renovating or building a new home is a significant purchase.  Naturally you need to ensure you are getting the best price possible, however, it is also critically important that you select a builder who will deliver a high quality project.

Clients and Architects regularly ask a quantity of builders to tender for any given project.  However, there are a lot of factors that clients need to consider before choosing who to appoint.

Tendering has little appeal for Builders, because it is a very time consuming and expensive process & regularly the lowest price is selected.  If a builder wins on a low price and then cannot or does not deliver the expected quality, the long term cost to the client will be massively higher financially and emotionally, putting you and your family under significant stress for an extended period of time.

1)      Cost of Tendering

If a tender is prepared thoroughly it will cost a Builder thousands of dollars put together.   This cost is made up of work contracted out to Quantity Surveyors and setting aside several days to organise plans, contact all relevant trades, detail the scope of work and send it out for pricing.  All quotes then need to be followed up and a tender document or tender pack prepared.

2)      Comparing Prices

If 4 builders tender on a project and 3 have similar prices and one is significantly less, warning bells should be ringing.  For one of four tenders to be much less than the others it suggests it was rushed, items were left out and/or they are not quoting to allow for all the subcontracted work to be delivered by high quality tradespeople.

3)      Price vs Value

Staring a building project is like starting a long term relationship.  You want to be sure you select someone that you can trust.  If you choose the wrong partner to save 200K on a large job, you may well find that it costs you 700K extra by the end of job or worst case that you spend all the money and do not get a good result.  If you have bad building work done, the cost to repair the work second time around will be much higher than having it done correctly the first time.   

4)      Asset Value

Building is an investment.  When you are building or renovating the cost to build should increase the value of your asset.  Cutting corners is likely to see the impact on your asset either reduced or minimised.  All clients have a budget and you need to choose a building partner who will respect your goals, work with you to deliver the project within the set budget and deliver the best possible quality possible within that framework.

5)      Reliability

Structural quality guarantees are set at 7 years by the government.  If you choose the wrong builder though, as demonstrated by many horror stories on TV, it can be very difficult, almost impossible to get them to help you when things go wrong.  For this reason it is critical to pick qualified, experienced builders.  You need to see the quality of the work, meet or speak with several former clients and know that they can be relied on to assist with any warranty work, if required, when required in the future.

A recommended alternative to Tendering

To avoid the pitfalls of tendering and choosing the wrong partner or a misleading price, there is another less known and very effective option. 

Do your research on the builders you are interested in; call past clients, visit past jobs, meet their team, find out their company history and check out their licences.  Select a great builder that you trust and would like to work with, one who you can be sure will deliver the result you want for your home. 

Set your budget with them (and your architect where appropriate) and work as a team to engineer the project costing so that you can be confident you are getting the look, quality and price that will work for you, delivered by a reputable, high quality building company. 

The value for you, your family and for your home asset will be well worth the time you spend researching and engaging the right building partner for your project.