Choosing Your Builder: The “Shopping Around” Stage #
Building or buying a home is one of the biggest decisions you’ll ever make. And when you choose to build, selecting the right builder is absolutely crucial. They’ll be your partner throughout the entire journey, turning your vision into a tangible reality. Think of this stage as “shopping around” for the perfect fit – someone you trust, who understands your needs, and who can deliver the quality you expect. Let’s dive into how you can navigate this important process in New South Wales.
Remember: The builder-selection phase is where you have maximum leverage. Once construction begins, changes become more difficult and expensive. Take your time, do thorough research, and don’t rush your decision based on timeframes proposed by the builder.
Types of Builders in NSW #
Selecting the right builder is one of the most critical decisions in your home building journey. NSW offers several builder types, each with distinct advantages depending on your needs:
Volume Builders #
Volume builders construct hundreds of homes annually using standardised designs and established processes.
Advantages:
- Generally, more affordable due to economies of scale
- Streamlined construction timelines
- Display homes available for viewing before purchase
- Established quality control processes
Best suited for: Budget conscious buyers working within a budget and those comfortable with streamlined processes and limited customisation options.
Custom Builders #
Custom builders specialise in unique, architecturally designed homes tailored to your specific requirements.
Advantages:
- Highly personalised designs
- Greater flexibility with site challenges (sloping blocks, narrow lots)
- Often higher quality finishes and attention to detail
- More personal service throughout the build
Best suited for: Experienced homeowners with specific design requirements, knockdown-rebuild projects with challenging sites, or premium home builds.
Note: Custom builds can cost more than volume builds.
Project Home Builders #
These builders offer a middle ground between volume and custom builders.
Advantages:
- Pre-designed homes with some customisation options
- More affordable than fully custom homes
- Usually have display homes to view
- More design choices than volume builders
Best suited for: Home buyers who want some customisation without the full cost of a custom-designed home.
Creating a Builder Shortlist #
Finding reputable builders in NSW requires research across multiple sources:
Display Villages #
Visit display villages in Sydney’s growth corridors.
Pro tip: Visit on weekdays for more personal attention from sales consultants.
Online Resources and Directories #
- Housing Industry Association (HIA) member directory
- Master Builders Association (MBA) NSW member search
- Facebook groups - buyers in the community have built groups around builders
Word-of-Mouth and Reviews #
- Ask friends, family, and colleagues who have recently built
- Check Google reviews, Product Review, and builder-specific forums
- Local community Facebook groups often have valuable discussions about regional builders
Industry Events #
- Sydney Home Show (held twice yearly)
- Sustainable House Day (held in May)
Questions to Ask Potential Builders #
Gather information as your research your options. Each data point can help you learn more about each builder to help you make an informed choice.
Licensing and Qualifications #
- Are you licensed to build in NSW? (Confirm licence number)
- What specific qualifications do you and your supervisors hold?
- How many years have you been operating in NSW?
- Are you a member of HIA (Housing Industry Association) or MBA (Master Builders Association)?
- Do you have experience with my specific type of build (e.g., sloping site, knockdown-rebuild)?
Previous Work #
- How many homes have you completed in the last 2-3 years?
- Can I speak with at least three recent clients?
- Do you have any homes under construction I can view?
- What is your experience building in my local council area?
- Have you ever had a complaint filed with NSW Fair Trading?
Build Process #
- Who will be my main point of contact during the build?
- How many projects do your site supervisors manage at once?
- What is your typical build timeframe for my type of home?
- How often can I visit the site during construction?
- What is your process for handling variations to the contract?
- How do you manage wet weather delays?
- What is your policy on client communications? How quickly will you respond to queries?
Financial Considerations #
- What is included in your base price versus upgrades?
- What is your payment schedule?
- What allowances are made for site costs and how accurate are they?
- Do you offer a fixed-price contract?
- How do you handle variations and their costs?
- What is your policy on delays and liquidated damages?
Quality and Warranties #
- What structural warranty do you provide? (Note: NSW requires a minimum 6-year statutory warranty period)
- What non-structural warranty do you provide? (Minimum 2 years in NSW)
- How do you handle defects during and after construction?
- What quality control processes do you have in place?
- Who supplies your materials and fixtures?
Checking Builder Licenses and Credentials in NSW #
NSW law requires all builders carrying out residential building work valued over $5,000 to hold a valid licence. Here’s how to verify credentials:
NSW Fair Trading License Check #
- Visit the Verify NSW site
- Enter the builder’s licence number, name, or ABN
- Verify that the licence is:
- Current and valid
- Appropriate for your project type (check conditions)
- Not subject to any disciplinary actions
Additional Credential Checks #
- ABN Lookup: Check the business’s Australian Business Number status on ABN Lookup
- Insurance: Request certificates of currency for public liability insurance and Home Building Compensation Fund coverage
- Association Membership: Verify membership with MBA or HIA directly through their websites
- ASIC Check: For company builders, check business registration on the ASIC Connect portal
Red Flags to Watch For #
- Reluctance to provide licence details
- Licence less than 2-3 years old with no explanation of prior experience
- History of company name changes
- Negative outcomes from NSW Civil and Administrative Tribunal (NCAT) proceedings
- Gaps in insurance coverage
- Requesting large deposits above statutory limits (maximum 10% for contracts over $20,000)
Understanding Building Contracts in NSW #
Building contracts in NSW are legally binding documents governed by the Home Building Act 1989. Understanding contract types is crucial:
Types of NSW Building Contracts #
1. Fixed-Price Contract #
- All costs are specified upfront
- Changes incur variation fees
- Advantage: Budget certainty
- Risk: Builders may include large contingencies for unknowns
2. Cost-Plus Contract #
- Builder charges for actual costs plus a percentage fee
- Advantage: Flexibility for custom designs
- Risk: No maximum price ceiling
- Note: Rarely recommended for residential projects due to unpredictability
3. Split Contract #
- Separates construction into stages with different payment terms
- Often used to reduce stamp duty on house and land packages
- Caution: Ensure legal advice as these can be complex and could affect loan
Essential Contract Components (NSW Requirements) #
- Builder’s licence details
- Cooling-off period (minimum 5 business days)
- Detailed specifications and plans
- Progress payment schedule
- Warranty insurance details
- Dispute resolution process
- Completion date
- Provision for extensions of time
- Liquidated damages clauses
Critical Clauses to Review #
- Prime Cost and Provisional Sum Items: These are allowances for unselected items - ensure they’re realistic
- Site Costs: Check if soil tests and site surveys are included
- Variations Process: How changes are costed and approved
- Timeframes: Construction schedule and penalties for delays
- Defects Liability: Process for identifying and rectifying defects
- Termination: Conditions under which either party can end the contract
Legal Review Recommendation #
Consider having the contract reviewed by a solicitor experienced in construction law before signing. This typically costs $800-$1,500 but can save tens of thousands in potential disputes. Look for solicitors specialising in building and construction law.
Obtaining and Comparing Quotes #
How to Get Accurate Quotes #
- Provide detailed information: Supply identical plans, specifications, and soil tests to all builders
- Request itemised quotes: Ask for detailed breakdowns rather than just total figures
- Clarify inclusions and exclusions: Specifically ask what’s not included
- Understand allowances: Check provisional sums and prime cost items closely
- Site costs: Request detailed assessment of site preparation costs
- Verify specifications: Check brands, models, and quality levels of included items
Comparing Quotes Effectively #
A suggestion is to create a comparison spreadsheet with these categories below to start with.
- Builder Name
- Licence
- Reviews
- Price
- Pros
- Cons
Red Flags in Quotes #
- Significantly lower prices than competitors (typically indicates missing items)
- Large provisional sum allowances
- Vague descriptions of inclusions
- High variation charges
- Limited or unclear specifications
- Unrealistic timeframes
The Importance of Insurance #
Builder’s Insurance Requirements #
In NSW, builders must have:
- Home Building Compensation Fund (HBCF) insurance:
- Mandatory for all residential projects valued over $20,000
- Covers structural defects for 6 years and non-structural defects for 2 years
- Protects homeowners if the builder dies, disappears, becomes insolvent, or has their licence suspended
- Verification tip: Ask for the Certificate of Insurance and verify through icare NSW portal
- Public Liability Insurance:
- Minimum $5 million coverage recommended
- Protects against third-party injury or property damage
- Verification tip: Request Certificate of Currency
- Workers’ Compensation Insurance:
- Mandatory if the builder employs staff
Next Steps After Choosing a Builder #
- Final contract review: Have your solicitor review the contract before signing
- Council approval verification: Ensure all planning permissions are in place
- Finance confirmation: Secure formal mortgage approval from the bank if required
- Pre-construction meeting: Schedule a detailed meeting to finalise all selections
- Document everything: Create a file of all communications, plans, and specifications
Common Questions First-Time Builders Don’t Think to Ask #
- What happens if unexpected issues arise during excavation?
- How are cost overruns handled?
- What is your policy on homeowner-supplied items or contractors?
- Can I make changes once construction has started? What’s the process?
- What exactly happens at handover? What documents will I receive?
- How are disputes handled during the build process?
- What is your after-sales service like?
- Do you have a standard list of finishes and inclusions I can review?
- How do you handle construction waste and site cleanliness?
- What is your wet weather policy and how do you protect the site?