How to choose a Builder

You have your project - Check!

You have your Architect - Check!

You have your Builder - … … … … !

That’s okay. That's why your here. Let’s get into how you go about doing that:

Preferred Builder

If you know a Builder who you would like to use as your preferred builder then the process is more straight forward. Your Builder will be given the project to quote, they will then provide you with the quote, and provided everyone is happy, they will build your project. We highly recommend engaging with them early at the design phase which allows the Builder to provide feedback on items such as their preferred construction methods and possible cost saving measures. So good for you, you have your Builder, but time to move along please. Nothing more to see here.

Selecting a Builder by Tender

If you do not have a Builder that you definitively know you want to use, you need to select one. This is done by tendering your project to several Builders and comparing their submitted tenders, then choosing one. If you know of Builders but don’t want to sign them on as your Preferred Builder, you can include them in the Tender.

Typically your Architect will nominate 3 builders who are of a size and quality suitable for your project. We always recommend that the client meets the Builders before the tender is sent out to get a feel for each Builder. Much the same way you would have met Architects prior to signing on. We advise to have a minimum of 3 Builders that you are happy to use for the Tender process. Less than 3 makes it very hard to compare price fairly, while more than 3 is regular practice. We normally seek 4 Builders, which allows for the possibility of 1 builder not submitting their tender, which will leave 3 for a good selection process.

The tender process will be run by your Architect (provided it is within their scope of work in your quote). The Architect will need some time to produce the documents for tender and associated paperwork to send out to the Builders. Once the tender package is sent out to the selected Tenderers. they will have a certain amount of time to respond. This is typically 2 weeks.

Once you receive the

We recommend you select a builder by their personal fit, there previous work and their references rather than on price alone. The construction process can typically last a year and like with the Architect you want to make sure you get along with people you are paying to deliver your project.

Sometimes clients will nominate one of the three builders based on a recommendation or previous relationship. Unfortunately sometimes the builder the client nominates isn't of the same calibre, size or financial soundness. Clients understandably are always attracted to the lowest of the 3 prices that come in from the tender. As a rule of thumb if one builder quotes $500k another $480k and the other $400k it is unlikely that the builder who quoted $400k will be able to complete the project to the standard required or financially complete it at all. If the project is well documented and specified there should be about a 5% variation in tender prices, a builder that quotes well under may have missed elements and details or has merely estimated some trades rather than getting them quoted.

Your Architect should advise you against accepting the lowest price if they have doubts that the builder has priced it correctly or will complete the project successfully. However at the end of the day it is the clients decision and unfortunately the potential saving of money can cloud the clients judgement in the actual value of this. While in signing the contract the builder is committing to build what has been documented and specified they will eventually work out what they have missed and or under quoted. Typically the builder will try arguing that elements weren't included in their price or why they should get an increase in budget, this can bring a lot of strain to the project and can cause financing issues if the client has only budgeted on the lowest price. Generally if the project has been costed and budgeted at $500k you will end up paying $500k either through builders variations to their tender price bringing it up to $500k or in the worst case scenario the builder cannot afford to complete the project and walks away which leaves the client with an unfinished project. Finding another builder to complete  a half finished project comes at a large cost in both time and money.

Another scenario we see regularly is the builder suggesting to the client that they could save them a lot of money if they let them specify the fixtures, fittings and finishes to something "similar" to what the Architect has specified or the client has chosen. The issue is if you sign off on this approach it often results in the old saying "you get what you get and you don't get upset", if you get to save $50k in finishes and fittings by the builder selecting their "trade selection" there will most likely be a reduction in quality.