3 things to do before choosing a builder for your New Home
Written By Annelyse Stead | Australian Home Building & Renovation Contract Specialist | M. Construction Law | B.Construction ManagementYou've been scrolling through builder websites for weeks. You've attended display home opens. You've saved a Instagram posts of dream kitchens.
But here's what most people don't realise: the builder you choose will impact every single day of your build - and potentially every day you live in your home.
Most homeowners choose their builder based on price, pretty display homes, or a recommendation from a friend. Then six months into construction, they're dealing with cost blowouts, communication breakdowns, or work that doesn't meet their expectations.
The truth? Choosing a builder isn't about finding the cheapest quote or the nicest showroom. It's about finding the right fit for your project, your budget, and your communication style.
Here are the three things you need to nail down before you sign anything with a builder:
Step #1: Calculate your real project budget
This is where most new home builds go off the rails before they even begin.
Your Build Budget is not the same as your Project Budget. And mixing these two up is the fastest way to blow your budget by $50,000 or more.
Here's the difference:
Your Project Budget is the total amount you have available for your entire project. Your Build Budget is what's left after you account for all the additional costs that happen outside your building contract.
What gets deducted from your Project Budget:
Utility connections (water, sewer, electricity, gas) - typically $15,000-$40,000
Land clearing and site preparation - $5,000-$20,000
Permit and approval costs - $3,000-$8,000
Design and consultant fees (architect, engineer, soil tests) - $15,000-$50,000
Variation buffer (set aside at least 5-10% of your build cost) - $25,000-$50,000 on a $500K build
Landscaping and driveways - $20,000-$80,000
Real example: I worked with a couple who had a $600,000 Project Budget. After accounting for all these additional costs, their actual Build Budget was $480,000. That's a $120,000 difference - enough to completely change which builders they could work with and what level of finishes they could afford.
Being crystal clear on your Build Budget before you start talking to builders will save you from wasting months on plans that were never financially feasible in the first place.
Action step: Create a spreadsheet with two columns: "Project Budget" and "Build Budget." List every cost outside your building contract, get quotes or estimates for each, and calculate what you actually have available for your builder.
Step #2: Understand the different types of builders
Not all builders operate the same way. And choosing the wrong builder type for your priorities is like hiring a marathon runner to sprint—they might be excellent, but they're not built for what you need.
Here's what most people don't realise: the type of builder you choose will dictate how much design flexibility you have, how involved you'll be in decisions, and how much your build will cost.
The 4 main types of builder:
1. Volume Builders
These are the big names with display homes. They build the same designs repeatedly, which allows them to negotiate better prices with suppliers and subcontractors.
Best for: First-time builders who want predictable costs and a straightforward process
Design flexibility: Low to moderate (usually choosing from preset plans with limited modifications)
Cost: Generally lower per square meter ($1,500-$2,500/sqm)
Timeline: More predictable (they've built this design dozens of times)
2. Custom Builders
These builders work from your plans to create a one-of-a-kind home.
Best for: Those with specific design visions or challenging sites
Design flexibility: High (you're building exactly what you want)
Cost: Mid-range ($2,000-$3,500/sqm)
Timeline: Longer and less predictable (every home is unique)
3. Design and Build Companies
These companies handle both the design and construction under one roof.
Best for: Those who want customisation but prefer a single point of contact
Design flexibility: Moderate to high
Cost: Higher per square meter ($2,500-$4,000+/sqm)
Timeline: Moderate (streamlined process can be faster than separate architect + builder)
4. Owner-Builder Arrangement
You act as the builder, contracting directly with subcontractors.
Best for: Those with construction knowledge, significant time availability, and risk tolerance
Design flexibility: Complete control
Cost: Potentially lower, but requires lots more management
Timeline: Highly variable (depends entirely on your project management skills)
Utility connections (water, sewer, electricity, gas) - typically $15,000-$40,000
Real example: A client came to me after receiving quotes from both a volume builder ($420,000) and a custom builder ($680,000) for what they thought was the "same" house. The difference? The volume builder's quote excluded several key features my client wanted, while the custom builder's quote included everything. When we adjusted for apples-to-apples comparison, the difference was actually only $80,000—and my client decided the custom builder was worth it for the design flexibility they wanted.
The key question to ask yourself: What matters most to you - predictable cost, design flexibility, or having maximum control? Your answer should guide which builder type you pursue.
Step #3: Ask these 3 Questions to every builder
Once you've nailed down your Build Budget and identified your builder type, it's time to start interviewing builders.
Here's what most people get wrong: they ask surface-level questions about cost and timeline, then choose whoever gave them the nicest brochure or the lowest quote.
The problem? You're about to enter a 12-18 month relationship with this builder. You're trusting them with hundreds of thousands of dollars. And you're relying on them to create the place where you'll live for years, maybe decades.
You need to understand how they actually operate, not just what they promise in their marketing materials.
The 3 Questions That Reveal Everything:
Question #1: "[Something important to you] is really important to me. Can you explain how you've managed this on previous builds?"
Fill in the blank with whatever matters most to you: communication, meeting deadlines, managing variations, quality control, problem-solving when issues arise.
What you're listening for: Specific examples, not vague promises. A good builder will tell you about their systems—weekly site meetings, project management software, quality checklists, how they handle delays.
Red flag: Generic answers like "We pride ourselves on great communication" without any explanation of what that actually looks like in practice.
Question #2: "My budget is [XYZ]. Can you share examples of previous builds you've completed within this budget range?"
What you're listening for: Whether they've actually delivered projects at your budget level, and whether they can show you photos or connect you with past clients.
Red flag: A builder who says "We can work with any budget" without demonstrating experience at your specific price point, or who immediately suggests you need to increase your budget by 30%.
Real example: I had a client with a $450,000 Build Budget. One builder showed them examples of homes they'd completed for $420,000-$480,000 and explained exactly what was included. Another builder showed them examples starting at $550,000 and suggested my client needed to "be realistic about what quality costs." The first builder got the job and delivered on budget.
Question #3: "What level of involvement will I have during pre-construction and construction? Can you walk me through what I can expect?"
What you're listening for: A clear description of your role in selections, approvals, site visits, and decision-making. How often will you meet? How are decisions communicated? What happens if you want to make changes?
Red flag: A builder who can't articulate a clear process, or who seems annoyed that you're asking detailed questions about your own build.
Bonus tip: Interview at least three builders
Even if you fall in love with the first builder you meet, interview at least two more. Here's why: the first conversation teaches you what questions to ask. The second conversation teaches you what good answers sound like. The third conversation gives you confidence in your final choice.
Plus, having multiple quotes gives you negotiating power and ensures you're getting fair pricing.
Choose your Builder like you're hiring a Business Partner
Because that's exactly what you're doing.
You're entering a partnership that will last 6-12months and result in the biggest purchase of your life. The builder you choose will impact your stress levels, your timeline, your budget, and ultimately, the quality of your finished home.
The three steps:
Calculate your real Project Budget
Understand which builder type matches your priorities
Ask questions and actually listen to the answers
These three steps take maybe 10-15 hours of work total. But they'll save you from months of stress, tens of thousands in cost overruns, and the heartbreak of a build gone wrong.
Every client I've worked with who followed this process has told me the same thing: "I feel so much more confident about our builder choice now."
Ready to nail your builder selection?
My Building Contract Health Check includes a comprehensive review of your building contract before you sign—ensuring you're protected from cost blowouts, timeline delays, and quality issues.
In just minutes, you'll know:
Whether your contract protects your interests
What red flags to watch for in your builder's terms
Exactly what clauses need to be negotiated before you sign
How to structure payments to protect your budget
In the past year alone, I've helped clients across Victoria, NSW, Queensland, ACT, Tasmania, Western Australia, and the Northern Territory avoid costly contract issues and build with confidence.
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.
