How to pick the right builder and not end up with a nightmare experience


We’ve all seen the articles recently. It seems like almost every day the media is reporting that another home builder has collapsed.

Porter Davis was probably the biggest builder to go under this year with 1,700 homes being affected when the company went into liquidation. (Source: ABC News Article 31/3/2023 Zalika Rizmal)

To say this would be a nightmare for the average family building a home is an understatement. This story does have a happy ending though, with the government stepping in to guarantee deposits and at least one other building company, the Nostra Property Group, picking up around 375 of the homes to enable the construction to be completed.

So, what does this mean for you? You’ve saved and saved, found the perfect block of land, the estate is exactly what you’re after, and the dream of a brand-new home in a family friendly suburb seems within reach. Now to select a builder. Anxiety levels rise, what if they go bust? What if I am left with a partially completed house? What if, what if …

Firstly, before I dive into some key things that you can do when selecting a builder, let me say that in my opinion this is not a systemic issue. 90% of the builders out there are great builders. We have seen extraordinary times with the Covid pandemic, building material price rises and trade shortages, and like any industry, the best will survive and thrive. As they say, a rising tide lifts all boats and when that tide eventually goes back out, you certainly see who has been swimming naked.

So, from someone who has been in the building industry for a while now, here are my top 5 things that you should do when selecting a builder:

  1. Due Diligence

Get a list of the builder’s completed homes and drive past them. How do they look? Knock on the door, speak to the owners. If you’re not comfortable doing this, get someone to do it for you like a friend or a buyer’s agent. It’s worth it. Same goes for trades, visit some sites under construction and ask them. These two things are probably the biggest indicators of a healthy builder you will find, outside of asking them for their tax returns!

  1. Communication

Go with your gut feel here. Do you like the builder, not just the display home salesperson. Are they knowledgeable? Do they have empathy with your situation? Are they concerned about timeframes?

  1. Supervision

Meet the supervisor. You may be building with a custom builder and chances are the actual builder is always working on site and is the supervisor. Outside of that, ask the supervisor about how they check the plans at each stage, how often they visit the site and how often you should visit the site.

  1. Price

Get three quotes. If your preferred builder is far cheaper than the other two, you have a massive red flag. You may think you are getting a good deal, but you also want the builder to be healthy and making a profit, so they don’t go bust.

  1. Don’t Settle

You need to find a design that suits you, with the look and feel that you want. There are so many options when it comes to floor plans and designs and there are so many fantastic builders out there. Keep looking until you know in your heart that you have found the right one for you.

Good luck, and if you want to chat any of these points through, or just want a sounding board on your side, I’m here to help.

Mark Collins

Construction Loan Co.

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