Finding a Reputable Builder Has Never Been Harder
As most homeowners know, the arrival of COVID19 led to the establishment of the hugely successful federal government HomeBuilder program. These $25,000, effectively uncapped, grants provided free money for those wanting to build.
Launched amid record low interest rates, what we witnessed was a feeding frenzy for both homeowners and builders. Many builders then reported full schedules for the following 12 - 18 months.
The seemingly limitless cash forked out by government led to a fair percentage of projects planned for future years being bought forward. The knock-on is that we now have a shortage of trades, timber, steel and a range of essential materials. The end result is delays, cost blow-outs, and builder liquidations.
The profit margin for some builders, now and into the immediate future, is in question. The concern for those about to commence a building project is to ensure that the builders quoting for work have not been financially compromised.
Add to this scenario is an unease that if interest rates continue to rise, and immigration numbers stay low, that all Australian building activity will tighten. Hence, it’s never been more important to conduct an extensive due diligence.
Do Your Homework
We all want our project done right. We want it delivered on time and on budget.
As your builder arguably has the greatest influence on the overall success of your project, builder selection is the single most important decision to be made.
Many homeowners embarking on a new build sometimes feel out of their depth. It can be overwhelming dealing with industry jargon, regulations, registration, permits and insurances, and as a consequence people often rush the all-important builder appointment process.
Granted, it can be challenging compiling a list of capable, reputable and affordable builders. Though several 'review' websites claim to provide this service, there’s no magical site where you enter a suburb, budget and job specs and half-a-dozen properly-vetted, trustworthy and available builders appear.
Be aware also that 'online reputation management services’ now exist - negative reviews can be deleted when legal pressure is applied to unhappy clients.
Also, the fact is, some of the very best builders have limited social media presence - many never appear in the review websites.
Therefore, you should source as many recommendations as possible. Here are the most common avenues available to gather a list of prospective builders:
- The first port of call is usually family, friends and neighbours. If they've built before they're sure to have a strong opinion about their builder
- Talk to local architects and building designers - particularly if you've appointed a specialist designer - as they'll be able to make referrals of builders that they've used successfully
- Take a drive around your neighbourhood and look for active building works. Knock on doors for a chat, most people are happy to share knowledge
- Ask trusted tradespeople for recommendations
- Approach local building surveyors, engineers, building inspectors, real estate agents and your council or shire planning offices
- Review local press and web adverts. Like all of us, builders want to work close to home - focus on operators who advertise in your area
- Search web, social media (Facebook is particularly good) and blogs
Be aware that membership of an industry association is not a guarantee of quality workmanship. No association will tell you that their member may cause you headaches. It's a common misconception to assume that, in the event of a dispute, an association will take the side of the homeowner. In reality, unless you have irrefutable evidence, industry associations are generally inclined to defend their fee-paying member.
Having said that, a recent association award commendation is a more reliable barometer of expertise (award winners can be searched via association websites). It is generally true to say however that association members are likely to be better informed and professional, so we do still recommend that you use one.
Be mindful not to rely too heavily on referrals alone, an acceptable outcome for a friend or family member may not necessarily satisfy you.
Be aware also that the majority of Australian businesses fail in the first 5 years, hence we strongly recommend you utilize the services of a well-established builder (ie: 10+ years).
Lastly, if an offer sounds too good to be true, it usually is.
by Brendan Watkins, Director - September 2022
We've helped hundreds of Australians complete their due diligence with our unique range of credit rating, defaulting, company & court records. We also search hard-to-find regulatory, insurance, social & government records to ensure our clients avoid repeat-offending builders. If you're about to build, or extend credit to builders, we'll do your homework for you.
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