5 things to negotiate with your builder (that isn't price!)
Written By Annelyse Stead | Australian Home Building & Renovation Contract Specialist | M. Construction Law | B.Construction ManagementYou're about to sign your building contract. But are you negotiating the right things?
Most home builders walk into contract negotiations focused on one thing: price. They push for a lower quote, negotiate down the builder's margin, and feel satisfied when they've shaved $10,000 off the build cost.
But here's what they miss: the clauses that will actually determine whether their build stays on budget, finishes on time, and meets quality standards have nothing to do with the initial price.
After reviewing hundreds of building contracts and helping clients across Australia navigate their builds, I've identified five critical contract terms that matter far more than price—and that most builders are willing to negotiate if you know what to ask for.
1. Payment schedule: protect yourself from front-loading
Here's a clause that can make or break your build: the payment schedule.
Most standard building contracts are heavily front-loaded, requiring you to pay 60-70% of the total contract price before half the work is actually complete.
Why does this matter?
When you pay too much upfront, you lose your leverage. If quality issues arise or work falls behind schedule, you have limited ability to hold the builder accountable because you've already paid them for work that hasn't been completed yet.
What to negotiate instead:
Push for a payment schedule that aligns with actual work completion. A fair payment schedule should:
Tie each payment to specific, measurable milestones (slab poured, frame complete, lock-up stage)
Ensure that at each stage, you've paid no more than the value of work actually completed
Specify that progress payments can only be claimed once work reaches the defined milestone
Real example: A couple in Melbourne negotiated their payment schedule from the builder's standard 6-stage schedule (which had them paying 90% by lock-up) to a schedule aligned with actual work completion.
2. Defect management: get the process in writing
The question isn't whether defects will occur, but how they'll be managed when they do.
Yet most building contracts have frustratingly vague clauses about defect management. They'll say the builder must "rectify defects to a satisfactory standard" without defining what that means, who determines whether it's satisfactory, or what happens if you disagree.
The cost of vague defect clauses:
When defect processes aren't clearly defined, disputes drag on for months. You'll spend your time chasing the builder, documenting issues multiple times, and potentially hiring lawyers to resolve disagreements.
What to negotiate:
Get a detailed defect management process written into your contract. This should include:
A clear definition of what constitutes a defect (reference Australian Standards where applicable)
A formal process for reporting defects (email to a specified address, with response timeframes)
Timeframes for the builder to assess defects (e.g., within 5 business days)
Timeframes for rectification based on defect severity (e.g., urgent defects within 7 days, non-urgent within 30 days)
A dispute resolution process if you disagree on whether something is a defect or how it should be rectified
Provisions for engaging an independent building consultant if disputes can't be resolved
Real example: A Sydney couple discovered significant waterproofing defects in their ensuite during the fixing stage. Because their contract included a detailed defect process with specific timeframes, their builder was required to engage an independent waterproofing consultant within 7 days. The defects were rectified within 3 weeks, adding only minor delays to the build. Without these provisions, the issue could have dragged on for months.
Pro tip: Ask your builder to provide examples of their defect register and rectification process from previous builds. If they can't or won't, that's a red flag.
3. Start and finish dates: lock in realistic timelines
Here's a clause that looks simple but causes enormous headaches: the construction timeline.
Many standard contracts include only a "commencement date" and an estimated timeframe for completion (e.g., "approximately 8-10 months"). These vague terms allow builders to extend the building timelines without accountability.
The hidden cost of timeline ambiguity:
Construction delays cost you real money. Every week your build runs over means:
Additional rent on your current home ($400-600/week for most families)
Extended bridging loan interest ($300-500/week)
Storage costs for furniture ($150-250/week)
Stress, inconvenience, and opportunity costs
A four-month delay (common in the current market) can cost you $15,000-$24,000 in out-of-pocket expenses.
Research from the Australian Bureau of Statistics shows that 64% of new home builds in Australia experience delays beyond the contracted timeline, with an average delay of 12-16 weeks.
What to negotiate instead:
Push for specific start and finish dates (not ranges) with clear provisions for extensions. Your contract should include:
A fixed practical completion date (not an estimate or range)
Specific grounds on which the builder can claim extensions (weather delays over X days, variations you've requested, supply delays beyond their control)
A requirement that the builder provide formal written notice of any delay within a specified timeframe (e.g., within 5 business days of becoming aware)
Liquidated damages provisions if the builder causes delays (e.g., $200-300/day after the contracted completion date)
Your right to terminate the contract if delays exceed a certain threshold (e.g., 90 days beyond the contracted date)
Real example: A Brisbane family negotiated a fixed completion date with liquidated damages of $250/day for builder-caused delays. When their builder fell behind due to poor scheduling (not weather or supply issues), they were able to claim $7,500 in liquidated damages to offset their additional rental costs.
How to make this work: Builders are often hesitant to agree to fixed completion dates with liquidated damages. The key is to make the provisions fair—only applying to delays that are genuinely the builder's fault, with reasonable timeframes and notice requirements.
4. Site inspection schedule
Want to know the single best way to avoid nasty surprises during your build? Be present.
Regular site inspections allow you to:
Monitor progress and quality in real-time
Catch issues early before they become expensive to fix
Build rapport with your builder and trades
Make informed decisions about variations and selections
Yet many building contracts include vague language about site access, with no formal inspection schedule. Some even include clauses that actively limit your access to the site entirely.
What to negotiate instead:
Negotiate for a structured site inspection schedule that's written into your contract. This should include:
Formal inspections at key stages (slab, frame, lock-up, fixing, practical completion) with the builder or site supervisor present
Regular informal access to the site (e.g., weekly) with reasonable notice to the builder
Your right to bring an independent building consultant to inspections
A process for documenting observations and concerns (e.g., site diary, photo log)
Timeframes for the builder to respond to concerns raised during inspections
Real example: A Perth couple negotiated fortnightly site inspections into their contract. During their week 8 inspection, they noticed the frame wasn't square. Because they caught it early, the issue was rectified within a week at minimal cost. If they'd only visited at the lock-up stage (as per the builder's standard schedule), fixing the issue would have required removing cladding and re-squaring the frame—a $15,000+ rectification job.
What builders worry about: Some builders resist frequent site visits because they worry about micromanagement or safety liability. Address these concerns by:
Agreeing to reasonable site safety requirements (wearing high-vis, hard hats, closed-toe shoes)
Confirming you won't interfere with trades or give instructions directly (all communication through the builder)
Focusing inspections on progress and quality, not critiquing the builder's methods
5. On-site presence and communication: know who's accountable
Here's the scenario that causes the most frustration during builds:
You have a question or concern. You call the builder. They're "on another site" or "in a meeting." You leave a message. Days pass without a response. The issue escalates. By the time you finally connect, the problem has become more expensive to fix.
Sound familiar?
The root cause is usually buried in a vague contract clause about site supervision and communication. Many contracts simply state that the builder will "manage the construction" without specifying who will be on-site, how often, or how accessible they'll be.
What to negotiate instead:
Negotiate for clear site supervision and communication provisions in your contract:
Identify who will be responsible for day-to-day site supervision (builder, site manager, or specific supervisor)
Specify minimum on-site presence (e.g., site supervisor present at least 3 days per week during active construction)
Establish communication protocols (phone, email, preferred contact times)
Set response timeframes for different types of queries (urgent vs. non-urgent)
Schedule regular progress meetings (weekly or fortnightly) to discuss upcoming work and address concerns
Confirm who has authority to make decisions on-site (so you're not waiting for approvals on minor issues)
Real example: A Canberra family negotiated a clause requiring their builder's site supervisor to be on-site at least three days per week and to respond to emails within 24 business hours. When a scheduling issue arose that could have delayed their build by two weeks, they were able to resolve it within 48 hours because they had direct, responsive communication with the supervisor.
Pro tip: During contract negotiations, ask to meet the person who will be your primary contact during the build. If the builder can't or won't introduce you, that's a warning sign about their communication and accountability.
The bottom line: negotiate what actually matters
What matters more than the initial price is whether your contract protects you from budget blow-outs, delays, and quality issues.
By negotiating these five key terms—payment schedule, defect management, timelines, site access, and communication—you'll have far more control over your build and far better outcomes.
These aren't offensive negotiations. They're about creating a fair contract that protects both parties and sets your build up for success.
Know exactly what you're signing - before you build
My Building Contract Health Check gives you line-by-line clarity on your contract before you sign. In just minutes, I'll help you:
Identify hidden costs and unfair clauses that could blow your budget
Understand exactly what you're entitled to (and what your builder can claim)
Know which specific clauses to negotiate before signing
Lock in quality control processes from the start
I've helped hundreds of families across Victoria, NSW, Queensland, ACT, Tasmania, Western Australia, and the Northern Territory build with confidence and avoid costly contract disputes.
Thanks for reading, and catch you in the next post 😊
Annelyse
Construction Management | M. Construction Law
