If you’ve just embarked on the search for a custom home builder and are getting home building quotes from a few selected builders, you may be a little surprised when you see how variable the pricing is. I have seen so many examples of this and I understand how confusing this can be for homeowners. After all, you’ve provided each builder with the exact same plans and you’ve taken the time to discuss what types of finishes you would like, so why on earth is there such a variance in prices?
From our 25 years of industry experience, this is not at all unusual; in fact when we quote we actually expect there will be at least one unrealistically cheap builder quoting. Before you get really excited about the cheapest quote, consider this, if a quote seems too good to be true, it most probably is! There are many areas you can check to see if the quote is really going to deliver what you expect. It pays to treat the cheapest home building quotes with a great deal of suspicion.
1. Cheaper building materials
The unscrupulous builder may attempt to build your home by selecting materials that are considerably cheaper (for him). Unfortunately, because he doesn’t have to live in your home, he will not suffer any negative consequences when the inferior building materials don’t live up to expectations. He will simply refer you back to your building contract that listed the materials and explain that this is what you agreed to. The consequences of using cheap or inferior building materials are far reaching, so ask lots of questions and do your research.
2. Volume of building work
Buying materials in bulk is a common way to save money, and builders who factor these low material costs into their pricing, are forced to take on more work than they are capable of, rather than focusing on one or two jobs at a time. This typically results in frustrating delays with your job or low-quality work because the builder has overbooked himself.
3. Unrealistic allowances
There are often warnings about using allowances in building contracts, but we honestly believe, if they are used appropriately and ethically, allowances can provide more flexibility with selections such as tiles, fixtures and cabinetwork. But it must be emphasised that when comparing home building quotes the allowances must be considered correctly, as in the example below.
4. Building site housekeeping
We’ve all seen the eyesore of an unbearably messy building site. A quick walk past a building site will often determine if the builder is conscientious about preserving the environment, and considerate about the other residents in the area. Keeping the site clean and tidy is one of the most obvious ways to achieve this. Regular site clean ups certainly cost the builder money in both labour and rubbish removal fees, and cheaper or inexperienced builders regularly fail to allow for this in their building quote. This not only affects the tradesmen who work onsite, but your safety and comfort and that of your neighbours is often compromised. Making your neighbours grumpy is never a good idea, considering that you will have to live with them once the building work is completed!
5. Unqualified workers
A cheap home building quote can frequently indicate that the labour costs have been under-priced. This often occurs when a builder employs workers who don’t have the relevant qualifications or experience. Unfortunately this is the most common reason for serious defects and shoddy workmanship.
6. Cutting corners on professional registration and insurance
Professional registration and insurances (including Workcover) will cost your builder a substantial amount of money. Some cut-price builders will try to make savings in this area, but this can leave you exposed and vulnerable if things go wrong. I strongly advise you to ask for a copy of the builders registration certificate ( or go to the Victorian Building Authority to check it online.) Also ask for evidence of insurance policies.
7. Deliberately under-quoting
This is a common practice in the building industry which is very deceptive, but unfortunately the less reputable builders get away with it as most homeowners don’t have enough technical knowledge to determine that the quote covers exactly what they want in their new home. There are many tricks that we have seen over the years that are used by dodgy builders to fool homeowners into thinking they can really have it all on a shoestring budget. Whilst it may be a cliché, ‘You get what you pay for’ is so true of home building.
8. Lack of experience preparing home building quotes
Not all builders have the experience on how to quote a job accurately. If an error is made and something is left out of the quote, you may think that you will get something for nothing, (and if the error is relatively low cost it may mean a small ‘win’ for you.) But beware if there is a major shortfall in the job costings, either the quality of the work will suffer, or your work will be subject to delays, while the builder seeks out other work to make an income. Sometimes (and we have actually seen this happen) the builder will walk away from an unprofitable job leaving you with the heartbreak of a half finished house.