Choosing a builder: 5 things to consider before you sign

Written By Annelyse Stead | Australian Home Building & Renovation Contract Specialist | M. Construction Law | B.Construction Management

You've found the perfect block of land. Your design is coming together. But now comes the moment that makes or breaks most home builds...

Choosing your builder.

Most people think the hard part of building is designing the house. But the truth? It's selecting the right builder and getting your contract right from day one.

I've seen too many homeowners rush this decision, only to face budget blowouts, timeline delays, and contract disputes that could have been avoided. The good news is that with the right approach, you can set yourself up for success before you even sign.

Here are five critical things to consider when choosing your builder—lessons I've learned from working with dozens of clients through their new home builds.

1. Get crystal clear on your priorities (because you can't have it all)

Before you talk to a single builder, you need to understand something fundamental about construction:

Every build involves three core factors: time, quality, and cost.

And here's the kicker—you can usually only optimise for two at once.

Want it fast and high-quality? It's going to cost more.

Want it cheap and fast? Quality might suffer.

Want it cheap and high-quality? It's going to take longer.

I learned this the hard way when working with a client who wanted a custom design, a tight budget, and to be moved in by Christmas. Something had to give—and it did, in the form of major stress and relationship strain with their builder.

Ask yourself these three questions:

• Time: Do you have a firm deadline? Are you paying rent while building? Do you need to coordinate with school terms or work commitments?

• Cost: What's your absolute budget ceiling? Do you have a contingency fund (ideally 10-15% of your build cost)?

• Quality: How much control do you want over finishes and design? Are you willing to compromise on certain elements?

Knowing which factor is your top priority will guide every single conversation with builders. It will also help you recognise when a builder's promises sound too good to be true.

2. Understand the different types of builders (and their risk profiles)

Not all builders are created equal. In fact, there are several different construction pathways you can take, each with its own advantages and risks.

Here are the four most common options:

1. Developer for off-the-plan construction: You buy a pre-designed home in a new development. Lower design flexibility, but often faster and more predictable.

2. Registered builder for design and construction: One company handles everything. Convenient, but you're relying heavily on their in-house design capabilities.

3. Registered architect for design, with a registered builder for construction: Higher design quality and customisation, but requires coordination between two parties.

4. Draftsperson for floorplan and specs design, with a builder for construction: More affordable design costs, good for straightforward projects, but less architectural sophistication.

Each pathway comes with different levels of risk around time, cost, and quality.

For example, if you go with separate design and construction, you have more creative control—but you also need to ensure the design is buildable within your budget before you go to tender. I've seen clients spend $15,000+ on architect plans only to discover their design would cost 30% more than their budget allowed.

On the flip side, going with a volume builder offering package homes can seem safer, but you'll have less flexibility if you want to make changes mid-build.

Bottom line: Match your builder type to your priorities from step one. If time is critical, a volume builder might be your best bet. If quality and uniqueness matter most, invest in a good architect and custom builder.

3. Separate your must-haves from your nice-to-haves

Here's a scenario I see all the time:

You spend months working with your builder or designer on your dream home. You fall in love with every detail—the stone benchtops, the butler's pantry, the custom joinery, the outdoor kitchen.

Then you get the quote back and it's $100,000 over budget.

Now you're faced with painful decisions, and because you haven't prioritised your wants, cutting costs feels like losing pieces of your dream home.

The solution? Create two lists before you start designing:

• Must-haves: Non-negotiable features that are essential to how you'll live in the home (e.g., four bedrooms, separate living areas, covered outdoor space)

• Nice-to-haves: Features you'd love but could live without or add later (e.g., stone instead of laminate benchtops, a fire pit, plantation shutters)

This simple exercise does two powerful things:

First, it helps you adjust quickly if costs escalate, without sacrificing what truly matters.

Second, it gives you negotiating power. When a builder says "we can't do that for this price," you know exactly which elements you can flex on.

One of my clients used this approach and saved $40,000 by downgrading their nice-to-haves while protecting every single must-have. They still got their dream home—just with a few compromises they could easily live with.

4. Ask your builder the tough questions

Once you're ready to talk to builders, don't just accept glossy brochures and promises at face value.

Interview at least three builders, and ask them all the same set of questions. This keeps things consistent and helps you spot who's genuinely capable versus who's just a good salesperson.

Here are the essential questions to ask:

• Who handles permits and building approvals? Some builders include this; others expect you to manage it (or charge extra).

• Can I see a sample construction timeline for a similar project? Ask what the main risks are for delays and how they've handled them in the past.

• How can I verify your company's financial stability? Check they have proper insurance, and don't be afraid to ask for references from recent clients.

• Will there be a dedicated site manager? How often will they communicate with me? What's the process if something goes wrong?

• What's included in your quote, and what's excluded? Get this in writing. Vague quotes lead to variation costs that blow out your budget.

• What happens if there are defects or issues? What's your process for handling them, and what are the timeframes?

Pay attention to how they answer, not just what they say.

Do they get defensive? Do they provide specific examples? Do they have systems and processes in place?

A good builder won't be put off by tough questions—they'll welcome them because they know their processes stand up to scrutiny.

5. Be prepared to negotiate (and know exactly what to look for in your contract)

Once you've narrowed down your shortlist, it's negotiation time.

But here's what most people don't realise: the real negotiation isn't just about price—it's about terms.

Your building contract is the single most important document in your entire build. It determines who's responsible for what, how disputes are resolved, what happens if things go wrong, and how much financial risk you're taking on.

When reviewing your contract, make sure you understand:

• What's included, what's excluded, and what's provisional (a provisional sum means you'll pay more later if costs increase)

• The payment schedule (never pay too much upfront—you want leverage if things go wrong)

• The variation clause (how are changes priced and approved?)

• The dispute resolution process (what happens if you disagree with the builder?)

• Defects and warranty provisions (what's the process if something's not right?)

• Timeframes and delay clauses (are there penalties for the builder if they run late?)

Most standard building contracts are written to protect the builder, not you. That's not necessarily malicious—it's just business. But it means you need to read carefully and negotiate terms that give you fair protection too.

This is exactly the kind of thing I help my clients with. I've reviewed dozens of building contracts and I know the red flags to look for—the clauses that seem harmless but can cost you thousands down the track.

Your next steps: making sure your contract sets you up for success

Here's what I've learned after years of helping people navigate their home builds:

A successful build doesn't start when construction begins. It starts when you choose the right builder and get your contract right.

The homeowners who sail through their builds with minimal stress are the ones who did their homework upfront. They knew their priorities, chose the right builder type, asked tough questions, and made sure their contract protected them.

The ones who struggle? They rushed the builder selection, didn't read their contract properly, and ended up fighting battles that could have been avoided.

If you're feeling unsure about your building contract—or worried that something might be missing or unclear—it's worth taking the time to get everything in order before you sign.

That's where the Building Contract Health Check comes in.

I'll review your contract in plain English, uncover any potential issues, and create a plan to help you feel confident and in control of your build from day one.

I'll identify the clauses that could cost you money, flag areas where you're taking on unnecessary risk, and give you specific questions to ask your builder before you sign.

Think of it as insurance for your build—except instead of paying out after something goes wrong, you're preventing problems before they happen.

If you're ready to make sure your contract is solid and you're set up for success, book your Building Contract Health Check today.

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Thanks for reading, and I'll see you in my next post!

Annelyse

Construction Management | M. Construction Law

Follow me @_buildtogether for daily tips on building and renovation contracts.