How to build a house: Find a builder

ADD IT TO THE LIST: It's not just about choosing the builder, but how you pay the builder too!
Tamara Voninski

ADD IT TO THE LIST: It's not just about choosing the builder, but how you pay the builder too!

Join this family of four as they experience the highs and lows of building a home for the first time. 

How to pick a builder

This is yet another part we've done the wrong way round.

In ideal world, option one, you'd finalise your design, get a bunch of builders to tender for the job, have a small nervous breakdown when you saw their quotes, have a glass or two of wine to recover, modify your design if you could/had to, then send it in to council for consent.

In running against the clock, option two, you submit your drawings to council while getting builders to tender at the same time and cross your fingers that you could afford the house you just paid thousands of dollars to get council consent for.

Guess which option we went for?

The problem with our approach, option two, is of course that we're financially committed to our design. Once we have consent, any changes we make to it cost money.

If they are changes that are going to reduce the overall budget, then they might be worth it, but generally, its best to have as much designed on paper as you possibly can, because once you get into hammers and nails, the money starts disappearing. Fast.

We were reasonably confident about our design, having had a quantity survey estimate done, but the wait to get final figures is still nerve wracking.

Getting builders to tender

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The thing to note about this process is that it takes time (at least three weeks), and money for the builder to put a quote together.

We had a whole bunch of builders lined up to tender. But because the process of getting our working drawings took so long (thanks to a particularly tardy structural engineer) Christmas is coming. And so for many builders, finding the time to chase paperwork to quote our job was about as likely as a possum learning to drive a digger.

Still, with the builders we did manage to get to quote - most of whom are recommendations from friends - we met them all personally. We want to compare not only their prices, but also the quality of their other work and the way they suggest dealing with the tricky aspects of the build.

Personally I'm looking for a "there'll be a way" type of builder rather than a "you can't do that love" type. That's to say I'd rather have someone looking to work out the best way to solve a problem, than have someone who only sees the problems.

What does the builder's quote cover?

It depends. A full contract quote (or fixed price contract) includes all labour, materials, subcontractors and the management of the building project.

In contrast, labour only means the builder is responsible for building work and everything else is up to you. There are also a range of hybrid arrangements, like a managed labour only contract.

Full contract

With a group home build you will almost always get a full, fixed price contract. You don't have to tender as you don't choose your builder.

There will, however, be a number of items in the build, things like fences, even kitchens, which will have "PC sum" listed.

This is an estimated amount for the work done for that particular item. If for example, the kitchen you eventually specify is more than what has been allowed for, you pay extra, if it's less, you claw back a bit of the cost for the rest of the build.

We wanted a full contract, for the peace of mind that comes with knowing you'll be almost on budget at the end, and because with two small kids, and no building experience, I didn't want to project manage.

But we are not building a group home, and with the complications of our build, the builders all admitted they'd be adding a massive contingency to their budgets as a just in case. A just-in-case we can't afford it because with that fixed price, what you agree on is what you pay.

The hybrid – managed labour only contract

We're therefore waiting on quotes for a managed, labour only contract.

This can take a variety of forms, but the most common we've discovered is that the builders will supervise everything, organise most things (unless we specify we are) and will run an "open book" system where they bill us weekly or fortnightly so we can see exactly what they are spending and on what.

We know their labour rates up front, and they estimate how long it will take to do the build, but the end date is not fixed, and thus the price isn't either.

All of them have come with recommendations that their estimates are pretty on the money, but on the money can be $10,000 over budget, or $25,000 depending on who you talk to.

My toes are curling at the thought of the potential budgetary blow out, but like I said, with Christmas coming, and our site, this is the best option we've been able to come to. I'll keep you posted.

- Michele Powles is a writer and mother of a lego engineer and destruction specialist. You can read more about their New Build Love over at  www.buildingboxes.co.nz or on  Facebook

 - Stuff

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