Building a House - Choosing a builder

Home Improvement
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Advice for Prospective Home Buyers.

Choosing a builder can be a risky business. Checking your state’s register to see if your proposed builder is on the ‘naughty list’ may not be enough.

Some questions to ask your proposed builder:

  1. Has anyone who works for your company ever been on the ‘naughty list’? Sometimes individual Registered Building Practitioners, employed by a builder, may be on the list but will not come up when you search a volume builder’s name.
  2. Have there been any actions brought against your company in the last 2 years? In Victoria actions at VCAT or Conduct Reviews, will not put them on the naughty list, even if found guilty. Check on-line forums or VCAT lists, as well.
  3. Has your company bought, or attempted to buy, any houses from the owner in an attempt to finish a dispute. IT DOES HAPPEN!!! Imagine the nightmare situation that would have lead to this solution.
  4. When a dispute arises over a defect or something not being what it was supposed to be, do you fix it? Or do you say ‘too late’ and offer compensation such as an upgraded oven?
  5. Has your company ever offered ‘payment’ (e.g. theatre tickets) for a good review on any online web-site such as Product Review etc.

I have a copy of a report from a very senior person at the Victorian Building Authority that should serve as a chilling warning.

My son alleged that his frame was not compliant, even though a frame inspector had approved it. The builder denied this and claimed a frame stage payment. My son made a formal complaint to the VBA and eventually it did an inspection of its own and agreed that it was not compliant and the frame should not have been approved. Eventually even the builder agreed and so preceded to correct some of the defects.

Here’s the punch. This very senior person from the Victorian Building Authority recommended that no action be taken against the builder for the dodgy work, or the premature claim for the frame stage payment, even though these were in breach of the regulations because it was attempting to fulfill its contractual obligations.

The lesson to be learned from this is that dodgy work and dodgy claims are happening all the time and unless you call them out on it, nothing will be done about it and that’s what you’ll get. If you are like most consumers and know very little about building regulations, get some-one who does, even if you have to pay someone to do it. Watch closely at every stage. I’m sure it will be worth it in the long run.

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Great advice, but I wonder how many shonky builders would provide honest answers to the questions. Simplistically get the answers in writing to avoid “I never said that” and a corollary is thus for the buyer to do as much independent research and validation as possible. There is nothing as good as written documentation and photographs should a dispute arise.

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Hi pdtbaum,
Also good advice. Can I add that when taking photos make sure you have the metadata to prove when they were taken, say your phone for example. Also have references in them if size is relevant, preferably a ruler. Correspond only by email so you have a paper trail of everything. And keep every email from day one of contact with the builder.

Buyers should go into the building process with their eyes wide open and not assume it is going to be one happy, joyous occasion free of any problems. Better to be well prepared in case rather than be powerless to do anything later because you have no proof. You have no idea how quickly a volume builder can work to get a defect covered up. Then they use the standard response of, ‘Well, it’s too late now…’ I’m speaking from experience of course.

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We are currently in the middle of a renovation in a difficult area to build in.
Happily our builder and his team are excellent. Which is not a surprise to me as we spent a lot of time researching the builder.

My advice is this - do your homework - BEFORE you start the build. Ensure that the price of the build is not the only factor in determining the correct builder. On paper we chose the most accurate quote rather than the quote that appeared better. (as it turned out it was more expensive on paper - but we are ahead of schedule and have achieved far more than I had dreamed possible)

Here a few of my tips:

  1. Asked people who had used the builder before about their experience.

  2. Check out whether they have their own trade or just sub contract - if they do sub contract - do they have a core team they used regularly - and are they also proficient. (this is as important as choosing the builder. Much of work is done by trade other than your builder (who may be a carpenter). - who is actually doing the work?

  3. Is the builder on the tools (were they ever on the tools or are they a project manager? Knowledge in a builder is critical, they have to be able to resolve many complex issues and talk to plumbers, plasters and sub contractors knowledgeably.

  4. Do the other trades admire your builder - do they have the same vision as he does - in other words do they care more about the job than their take home pay? Every trade on our build seems to talk from the same story book. They are all enthusiastic, talented and honest.

  5. Always allow about 20-30% contingency particularly in a renovation. Stuff happens that is out of the builders control.

  6. Finally - be prepared - choose everything you can before starting the build, tiles, bathroom items, kitchen, appliances, floorcovers, lighting - everything. Think about where the light switches, power and data are going. Things move quickly and trying to make decisions on the run is expensive and often will hold up the builder - adding to the expense.

In short find a builder you can trust, rather than one that fits the budget.

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Hi Wayne,
Great advice. Sadly, so many choose on price. I know of two local builders (both very good) who have given it away because they simply could not compete with volume/project builders in building a house. As a consequence, they were also lost to the renovation market. Having tradespeople who are good at their craft and who can be trusted, can save massive frustration, anger and unhappiness. And the difference in price may not turn out to be as much as you’d thought because they get it right the first time. Hope your renovation continues to be great.

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Hi dawnkidgell how I feel your pain. In NSW the system relies on the builder/tradie being scared of NCAT (like your VCAT). However, if this is not the case, no matter whether your complaints are upheld and orders issued, if the tradie does not respond there is absolutely NOTHING the consumer can do. I took my case as far as the law demanded/allowed, won three times in NCAT, three times in the local court, won three seperate examination orders, had three arrest warrants and won a side issue in the Federal Court. To date the builder in question has simply ignored everything, I am out of pocket not only for the original job but also from having to pay again to get the job totally re-done plus all the court costs and interest, and the builder continues to be able to ply his dubious trade. Why? Because you cannot sue the individual who actually does the work when that same person is also a sole trader who issued the contract. He no longer works under the company name I had a contract with but continues to be a licensed tradie and works under a number of unlicensed companies! Go figure!

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3 posts were split to a new topic: Building Oversight Failures

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Can I add some things to do when choosing a builder:

  1. Try & include everything in your specifications which will be part of your contract as variations can cost up to 20% of the contract price, (my current experience). Ensure you know what margin the builder will add to his cost for variations - my one originally wanted 20% markup but negotiated down to 15% which is what I accepted. I added a $12,000 solar upgrade after the building contract was signed which cost an additional 15% or $1,800 + GST as a variation.

  2. Find out if your builder or his supervisor will be on site all the time or if they have other jobs that they are supervising. My builders supervisor is very good but he has 2 other jobs that he is supervising which means that sub contractors are working by them selves with little supervision some of the time. It also means that the supervisor has less time to schedule other workers which means for a longer construct time.

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Hi dowen.news.
Our volume builder had a site supervisor who admitted at VCAT that he was supervising 15 homes at once and who had told us it was sometimes 20 at a time. I don’t think he was supervising any work, but rather just co-ordinating when tradies were to come.

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Whilst reading customer reviews on the 3 builders we had shortlisted to choose from to build our new home - I couldn’t help but notice that one builder had written the majority of the 5 star rated reviews himself. This was evident by a range of indicators.

  1. similar jargon used in the positive ads.

  2. the dates that the reviews were made. negative reviews were made randomly, however the 5 star reviews tended to clump. there would be 2-3 reviews over 2-3 days, then nothing for 6-8 months, then another couple on one day followed by another one a day or two later, then another long gap. I wouldn’t have noticed the pattern had I not been entering the reviews on a spreadsheet (yes…I am that thorough).

  3. the unusual emphasis in the positive reviews in focusing positively on issues which had previously been condemned by a number of reviewers in negative reviews. some of these were quite odd.

when checking out the builder - be thorough and don’t accept anything at face value - dig deep.

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After reading many reviews of a particular builder, I had come to the same conclusion - that the glowing reviews were probably written by the builder. I thought it obvious from the language used and how the language was constructed (I’m a teacher from way back). Perhaps we are speaking of the same builder.
I also seriously doubt that there was not one fault or concern during the whole build. I think there would be some issues with even the best of builders. The defining feature is how the builder deals with the concerns or faults.
Well done on noticing the other aspects of the reviews. My son made a complaint to a popular review site about the fact that good reviews always seemed to come up first rather than reviews coming up in order of posting. I’ve not checked lately, but I believe this may have been changed now. Did you also notice this?
I also believe builders should be made to disclose when they offer inducements, such as theatre tickets, for a good review.

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Hi Dawnkidgell

the reviews I looked at were in order of posting. I was comparing a number of builders - hence why I created a spreadsheet so I could compare them across a range of issues. and you are dead right - its about how they respond to problems rather than the problem itself. The other issue we were keenly aware of was that the larger builders had very personable salespersons as the initial point of contact. Who would actually be building/supervising your site was another matter - certainly not the nice guy we had met who seemed to understand all our concerns.

I agree regarding disclosing the offering of inducements to put reviews up - realistically though, given that our politicians stuggle with that issue (what a surprise as they are such paragons of virtue), I don’t see builders ever complying with that.

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Hi all. Some great advice and examples to watch out for through this post, and I’ll add my 2 cents as well since in the last 4 years we have built 2 houses - 1 in Sydney and our new one here in Tamworth. I’d offer the advice from the posts above to be good things to follow, but also add 3 things to ask your prospective builder before you sign anything:

  1. When will the build actually commence (it may seem like common sense, but you’d be surprised).
  2. What are the builder’s rules regarding you having access to the site during the build (many completely lock you out)
  3. When the build is complete what is the timeframe for fixing any errors/faults (our Sydney build wasn’t completely fixed until 2 weeks before the auction, 3 years after we had moved in).

Our Sydney build was done through a company that had recently started doing project homes, but had apparently been building houses for a decade or so. We did the painful task of visiting display homes for months, before deciding on the one we chose. In fact we had decided on 3 or 4 other houses prior to that, but as we were building in the Canterbury Council area the other builders refused to build there, or put an extra surcharge on top for having to deal with that particular council (true story, unbelievable as it is). As it happened the day when we visited their sales office to sign the contract was Christmas Eve, and as we had never built before didn’t know squat about the processes involved, which of course now we are fully aware. The salesman made no mention of the “industry shutdown period” of 5 weeks that was to start the very next day, and also told us we had to pay a $10,000 deposit to get things moving. We found out of course months later that it is in fact illegal for them to request a deposit in NSW before you get an insurance certificate from them.

It was around April when we questioned why nothing seemed to be happening on site, and were told the plans were still with council. I contacted the council to enquire on the hold up and they informed me the plans had been rejected and sent back for re-submission - the building company’s architect had moved the house 10cm closer to the road so it would look better in the street, without us signing off on them. When I raised this with Fowler they admitted this and then tried to hit us with the re-submission costs lol (you can imagine my answer). From then on it was a nightmare. The house was supposed to be a carbon copy of the layout of the display home, including outside power points and gas points. We ended up with an outside gas point in an area useless to put a BBQ (and nowhere near where it was on the display home), which also made the area built for the BBQ a waste of money. At move in there was a brick missing from the balcony, doors that wouldn’t close, mismatching handles on the door to the master bedroom and they had flipped the laundry around so that the cabinetmaker couldn’t put in the benches that he’d measured off the plan, as now the door was on the opposite side of the room. There were other problems we discovered as time went on but I won’t list them here. Getting them to come out and do the maintenance on fixing those problems was a complete nightmare and weekly fight for three years. I think the majority of these things could have been avoided had we asked those three crucial questions I stated above, and of course got the answers in writing. The major one being we were never allowed on site except when invited by the foreman for stage payment inspections, so couldn’t see if things were being built as they should be.

Luckily now we have moved to Tamworth our experience with Single Builders has been the exact opposite. No deposit to start, constant communication, all trades want to double check everything with you on site before they start, site foreman always available and willing to answer any questions, flexible with changes (within reason of course lol), site access to our land any time we want and simply a pleasure to deal with. Maybe it’s the difference between country trade attitudes and city trade attitudes, I don’t know. What I do know is it shouldn’t have to be, the attitude of the tradies and builders up here should be the same everywhere.

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Hi obbittgam,
I can only speak for Victoria where it is also illegal to take any money before insurance is in place. It is also illegal not to have the start date in the contract.

We had those exact issues, and it took a huge battle and a whole year, for the Victorian building regulator to do anything about these breaches. The legislation is quite clear, the missing date in the contract is quite obvious. So what does that say about our regulator?

It is also illegal to make any variation, after the contract is signed, without a proper variation process being followed. This means the proposed variation must be explained to you and agreed in writing by you. The signed variation then appears on the original plan so all tradies know it has been changed and there are not two different sets of plans floating around. Fair and logical? Yes. But is it monitored or enforced? Clearly not in your case and certainly it was not in our case until after a long, long VCAT case.

Are you sure they can ban you from your own property? I think they just tell you that to cover themselves in case you have a fall or stand on a nail. At the very least, I believe you are entitled to ask for an onsite meeting whenever you like. Not all builders enforce this ban, maybe because they have nothing to hide (unlike some) or maybe they know they can’t stop you anyway.

Until we have strong, effective enforcement and oversight of building and contract law, builders can continue to get away with this sort of stuff. I think some have been engaged in poor business practices for so long, they don’t even know what the regulations are any more, and even if they did, wouldn’t see any need to comply. As I see it, the consumer usually doesn’t have the expertise, money, time or the courage to take them on and they know that.

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As it was explained to us, whilst the property was ours the house was not until fully paid for. They also surrounded it with a high padlocked fence so no chance even to sneak in for a look lol. And yes I believe it was only their policy to hide things in hindsight, especially after reading recently that the CEO who owned the company and another high ranking employee actually had their builder’s licenses taken away years ago, but were still allowed to operate this business. It must drive the good builders that are out there nuts when these rogue operators can pretty much get away with whatever they want. How can you compete honestly with companies that flout the rules and regulations without any consequence. How can they say the system works when builders who have their licenses taken away can operate a building company? Got me beat. As I said though happy now as we have encountered the good side of the industry with our new builders, and couldn’t recommend them highly enough. Don’t think we’ll ever go down the project home route again after the last nightmare lol.

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we are in the process of commencing to build. we have been through a very thorough process of selecting our builder. We started by reviewing builders online - i.e. google each individual company and read customer reviews (never bother with the reviews on their own websites). This quickly eliminated the majority of builders.

Then, we proceeded to look in detail at what they offered, their experience, their designs, their size (we didn’t want a large builder that mass produces boxes). We eliminated the majority of builders who offered very low cost design packages that were false and misleading. You know the ones where you can build xxx for only $$$, but they didn’t specify what is excluded. You look at their ad of a nicely finished home with landscaping, front wall with beautiful infills, maybe a gatehouse, water feature, pool, lots of feature lighting to the exterior, pathways, driveways, etc… etc… etc. BUT, when you follow up and wade through the sales process where a very amiable salesperson whom you will never meet again promises you the world, you realise that the attractive price relates to the most basic model without any of those attractive features that …well… attracted you in the first place.

SO!! now you are down to 2-4 builders. They appear to be honest, competent, not too big but not too small, been around a while, good client reviews, close enough that you don;t have to commute to attend their office, No specialised sales person who isn’t actually a licensed builder (when u ask - which u often don’t because ahh heck, he is such a nice bloke who really really wants the best for you - even at his own company’s expense (“let me do this very special deal,just for you”)

so… NOW starts the fun part. You meet each builder, have a long chat about your needs. They impress you. They have all the time in the world for you. They show you many designs and catalogues of their completed projects. Budgets are discussed. “Sure!! no problem!! we can do that for you!!”. You leave with a warm and fuzzy feeling. But, You also leave with a long list of their projects. some complete - some not. You look at many of the “builds”. By now, you are picking up the lingo. You are starting to feel like you know stuff. You have picked up jargon. Lintels, skillions, shadow lines - the list goes on.

You start a spreadsheet. You start doing drive bys. either you or the builder contact home owners. meet on site. look very closely at the detail. make lots and lots of notes. talk to clients - good and bad points are noted. You eliminate 3 of the contenders. often for silly appearing reasons. This one is too hard to get hold of once the “build” commences. That one makes too many excuses instead of rectifying problems. You quickly realise all builds have problems. Its how they are deal with that matters.

You are down to two builders., both seem really good. You ask each for an estimate and sketch of what you are after.
You start preferring one builder over the other. Then somethings happens, and you start to prefer the other builder. Eventually, you bite and decide to go with one or the other.

Word of advice. Take the proposed contract to a solicitor- you really really want to do this. You are up against seasoned professionals who place their own interests ahead of yours. why wouldn’t they?

And now the fun starts - next time - We might just buy an established house… sooo much quicker and easier.

oh - and in the process - we did discover a long lost relative from my wife’s side of the family. Go Figure!

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Hi evananleanne,
You have certainly done your homework and I wish you the best of builds.
Forgive me for repeating myself, but can I just give three pieces of advice?
Get absolutely everything in writing from day one.
Take photos of everything along the way. Be sure to include metadata for your photos and have a ruler or similar for scale if size is relevant.
It really helps should a disagreement arise, if you can prove your point.
And lastly, check on the work regularly, and if you are not au fait with building standards etc, get someone who is to do it for you.
Good luck!!! Hope you get your dream house without too much hassle.

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Even though the following article is very US centric it may hold some useful tips on choosing a Builder for the work you want done.

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I would like Choice to conduct an in depth investigation into the conduct of residential home builders - I am in the process (Knock down rebuild) and on my experience and conversations with others in my situation, the home building industry conducts itself much differently once a deposit has been paid, after the sales process, the industry knows that you now have little power because of the risk to your substantial deposit. It seems that inevitable variations and consumer unknowns are ripe for exploitation by the builder and are industry wide. Choice does an excellent job with TVs and toasters but the prime consumer item that most people are ever involved in (home building) has been overlooked. This need is also highlighted by the widespread problems with the residential apartment industry ie opal towers, mascot towers and now a castle hill tower block is in the news.

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Hi @brianbrennan, welcome to the community and for your first contribution.

Could you expand on this as to what you mean by this statement?

Usually a contract is signed around the same time a deposit is paid…and ongoing dealings with the builder is under and governed by the contract. This includes schedule of rates, variations (cost and time) etc. Standard contracts are usually clear about these and how they get resolved. Most contracts have variations either through change in scopes, unforeseen activities to meet current building standards, schedule of rate activities etc and why often it is recommended to have a contingency to cover these potential variations. Is this what you mean?

It is possible to reduce variations by knowing risks and exactly what the deliverable is (including fixtures, fittings, decorations, colour/finishes etc) before signing a contract.

If you are talking about defects, there are other threads which cover some of the challenges/limitations and room for substantial improvement of the current certification process. Is this what you mean?

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