Why you should never choose the builder with the lowest price

Posted on 02 January 2017

When you are searching for a builder to build your dream home, what do you look for?

Do you look for a builder with proven experience and service?

Or do you look for the cheapest quote available? Maybe you are looking at choosing the builder who can build your home in the shortest amount of time?

Choose the cheapest builder, and there are going to be consequences!

In this industry, the builder who provides the lowest quote has either missed items out of the quote, or is so desperate for cash flow that they are cutting the margin to zero in order to pay off existing creditors with your money.

If you think a builder that makes mistakes or has cash flow issues is not your problem, think again…

When you deal with these types of builders, they only have one thing on their mind once they sign a contract… “I need to get out of this job as quickly as possible, and sign a decent contract where I can earn some money!”

…And that’s a real problem for you if you are hoping to get a quality home as well as the lowest price….

So in this article, we’re going to reveal exactly why you should NEVER choose the builder with the lowest price. It’s a safe bet that a builder who is desperate for cash will agree to everything you ask for in order to get you to sign a building contract. They will even drop their price just to get you to sign.

This is a massive red flag.

Residential construction is high risk and low margin, so if a builder agrees to reduce their price it normally means one of two things;

Either they were taking you for a ride in the first place in order to see how much extra they could get out of you, or they simply have no idea of their numbers and are only focused on getting some cash into their bank account in order to satisfy the list of creditors who are chasing them for money.

If you sign a contract with one of these builders, you will end up with substandard work, delays and in some cases, an unfinished home.

If you want a good outcome, you need to invest some time researching to find the RIGHT builder. 

For starters, when looking for builders in your area – look for a specialist. Avoid the jack of all trades, new homes, renovations, and extensions, commercial, industrial.

The builder who claims to do everything is a master of nothing, and lacks experience when it comes to your particular style of home.

If you are building a custom designed home, look for a builder that only does custom designed homes.

These guys are specialists, they are very experienced and know exactly what to expect. Notably, their trades are also experienced in a particular area of construction so the job will encounter fewer delays.

Look for a builder with an interactive website with examples of their previous projects and testimonials.

Next, ask them questions via different channels to see how well they respond. Send an email one week, make a phone call the next and arrange a site meeting to discuss your project.

Key things to look out for, do they turn up on time, do they answer their phone and return missed calls? Do they respond to emails?

What you get in the sales process is a good indication of the service you will receive once a contract has been signed, so if a builder fails to return your calls or reply to your emails, move on.

Don’t waste your time chasing up an unresponsive builder as you will find yourself forever chasing them even once you have become a client.

Another key consideration is the advice they are prepared to offer before you become a client. A professional builder will offer guidance regarding design & specifications.

Finally, ask them about their build process and ask to see a similar job that is currently in progress.

Looking at a current job in progress allows you to see a ‘real’ home for ‘real’ clients. This gives you a true indication of the workmanship that you can expect on your new home rather than looking through a purposely built ‘display home’ purely for display!

Ask the builder questions like, “How do you communicate with clients? How is the progress of each home tracked?” And the big question, “Can I see the schedule for that job?”

If the blood drains from his face and he starts making excuses, then RUN A MILE!

This is a sure sign that this builder operates without a plan!

And in this industry, a failure to plan is a plan to fail…

To find out the other questions you must ask a builder before signing a building contract, download our free guide revealing all of the critical questions.

It’s the essential guide for consumers who want to avoid becoming another building industry victim…

Download your free guide

It covers a number of items, including why contracts and guarantees are so important, builder licensing requirements, insurance cover, and much more…

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