Choosing a Builder

This section of Building A House In New Zealand relies on information in the Locating Land section as well as the Building Materials sections.  Some builders have both land and house packages meaning that the land and the builder are a package deal. You may also have some preferences in building materials that your builder may not be comfortable with, so knowing a little about what you are looking for in a house is good to know before deciding on your builder.

 

Now, let’s start off with my definition of a ‘builder’.  I define a builder as the company or general contractor that oversees the building of your house. Collectively, they have the responsibilities of offering you house options, pricing your build, sub-contracting and organizing the building process, and ensuring that the result is a quality product that passes all building requirements, inspections, and your expectations.  In this instance, I will refer both to a building company and the general contractor that is on site and directing the building process as the ‘builder’. In the case of larger companies, the person that you talk to in the office won't be on site or responsible for building your home.

There are some things that you should look for when choosing a builder.  You will want to make sure that they offer what you are looking for, that they are qualified, and that the foreman that will be on site is personable and friendly.  Keep in mind that you will be working with this foreman for 4 to 6 months during the building process and they need to be someone that you can get along with and be comfortable having a mildly heated discussion with.

Different builders offer different things. Below is a list of things that you should be looking for in a builder:

  1. The Correct House Plan
  2. The Options/Materials You Want
  3. An Acceptable Timeline
  4. Appropriate Pricing
  5. Friendly and Skilled Contractor

Qualified Builder / Master Builder Guarantee

The builder that you use should be a qualified builder. That doesn’t mean that they need to have degrees in engineering or have 20+ years of experience as neither of those ensure a quality build.  Being a qualified builder does mean building a quality home well and doing things correctly and honestly.  Though there is a guild of Master Builders, that doesn’t directly ensure that a member is your ideal builder.  Working with a Master Builder does offer a limited guarantee through the Master Builders program though and will be a good place to start looking for a builder if you don’t have any previous recommendations.

The characteristics of a good builder is that they are honest, organized, skilled, knowledgeable, personable, have excellent communication skills, and have a history of quality work that is on budget and on time.  One way to determine this is to talk with their previous customers and get references from friends and family that have used them previously.  Unfortunately, no builder is perfect with every aspect of every job and there are a lot of negative opinions out there for every builder that consistently does positive work.  People tend to focus on a small mistake and ignore the rest of a beautiful build or take a subcontractor's mistake as the builder's, so take individual reviews in perspective. If at any time you get the sense that they builder doesn’t know what they are talking about, is disorganized, doesn’t communicate well, or is consistently late, then you may want to seriously consider not working with that builder.

Also keep in mind that larger firms will have salespeople that walk you through most of the planning process and that you may not be talking or meeting with the actual person responsible for building your home. We strongly encourage you to ask to meet with the actual contractor that will be overseeing your build and talk with them directly. It is their skills and personality that you will rely on when build of your home, not the salesperson.

 

The Correct House Plan

Having the correct house plan can help turn your home into your dream home.  It will allow you to love your home and enjoy spending time in it. It will also have everything that you want currently and have room for things that you will want in the future.  Though there are many options for your ideal house plan, the contents of the plan will require a much larger discussion and will be found in a later discussion under “Designing A House”.  What you need to make sure of is that your builder will work with you to ensure that the plan that you build is your ideal plan.

Most builders will not already have the plan that is perfect for you. However, most builders will work with you to adjust the plans that they have to tailor them to your desires or have access to a draftsman that can help design your ideal home.  Some of the large builders may be more inflexible and may limit you to the plans that they have on hand with only small changes to limit cost fluctuations in their pricing.  Though they may have a significant number of plans, they may only allow small deviations to those plans. If they don’t have what you are looking for, they may send you on your way.

Keep in mind that every home that you build should be your forever home. That means that you shouldn’t be afraid to ask for alterations to make your plans the best design for you, your family’s needs, and your future. A good builder knows this and will work with you through the process (within reason) to finalize a plan that is ideal for you.

The Options/Materials You Want

Every builder has their default vendors to supply their preferred building supplies. They may carry or offer materials from only those vendors.  What if you prefer something that isn’t on display or from one of their preferred vendors?  Is your builder flexible enough to give you what you want if it isn’t with their preferred vendors?

We talked with one NZ organization that was very inflexible on allowing alternative materials.  They had specific vendors supplying specific cladding materials, windows, plumbing fixtures, roofing materials, kitchen countertops and cabinets, etc. and if you didn’t like what they offered then they wouldn’t build for you.  Since we weren’t satisfied with the limited selection that they were offering, we had to use an alternative builder.

We talked with another vendor that admitted that they allow deviations from plans and stock selections, but they charge significantly more than necessary for substituting alternative vendors. That may make your dream house more expensive than you think from looking at the stock plans and pricing.

To help determine exactly what you may want in your house, you will have to do research on what is out there in your area. We also encourage you to not be limited to only what is available or commonly used in New Zealand. The rest of the world has some great technology that has been proven over decades that hasn’t hit the mainstream NZ market yet.  We will be touching on some of these in the “Designing A House” section later. Some builders will help you incorporate these, and others may not.

 

An Acceptable Timeline

When talking with your builder, they should be able to provide you with an approximate timeline for your build. A very fast build time may be as short as 4 months, while some may take as long as a year.  The average length of time to build a house in NZ is 6 moths. This does not include the conservative estimate of 10-16 weeks to create plans and get council approval.  Keep in mind that the longer the build, the more it will cost you, even with a fixed price build contract. You will not be able to inhabit your new build until you get the final Code of Compliance (COC), so you will be paying for both your current lodging as well as paying on progress payments for your new build.  Therefore, if a build takes an extra 6 months due to delays, that is additional 6 months of duplicate lodging expenses you will incur. If your builder has a history of running behind, you may want to consider installing a ‘sunset clause’ in your contract to cover extended expenses for double mortgages/rent. If your builder falls behind your target completion date, they are penalized financially. If your builder isn’t confident in discussing this with you, that may be an indication that they don’t think the timeline that they provided is realistic.

What can significantly improve the building process is having a builder that is very good at scheduling subcontracting as well as an initial eye for quality. Reducing time through efficient scheduling and overlapping subbies (as possible) is a great way to speed up a build. There are several building planning software packages available and a contractor that uses them has an advantage in scheduling over a builder that doesn’t. The software can also provide and use Gannt charts to give realistic timelines and expectations to your building milestones.  An initial eye for quality will ensure that either mistakes don’t happen, or they are caught soon so minimize the extent of rework or prevent failed building inspections.  Again, proper use of Gannt charts will give realistic timelines when unavoidable delays do occur.

Appropriate Pricing

Appropriate pricing is typically the primary concern for most.  Many consumers will base their builder selection based only on this criterion to ensure that they get the biggest (not best) home for the money.  However, this isn’t always the best decision and may be a false measure if comparing initial costs vs. overall costs. There are many builders, both large and small, that have cut corners to reduce cost and pricing to win your bid. This may mean using the lowest price materials and appliances with less concern for overall performance, or even using inferior building products and practices.  These can result in builds with lower quality, and in some instances are completely unsafe (Bella Vista). When you are talking with any builder, please weigh what you are buying against the quality and performance you are getting. We will discuss some of these options to provide higher quality in the “Designing A House” section.

What we have noticed when talking with NZ builders is that the larger companies tend to offer competitive pricing and may lead or promote those prices.  This is opposed to smaller builders that may have to work up an individual quote.  There are a couple of legitimate reasons for this. Larger builders build more houses so have access to consistent building expectations and discount bulk pricing.  They may have greater negotiating power with wholesalers and suppliers so they may be able to pass on their savings as better pricing which they may pass to you. They may also have enough constant business that they directly employ their subcontractors (plumbers, electricians, bricklayers, etc…) Since the workers are company employees instead of subcontractors, this eliminates some of middleman profit.  They may also have a plan in place that works and can even deliver faster build times.

However, this ‘system’ may also resist deviations like alterations to plans, alternative materials, and foreign or newer technology. If there are deviations to stock plans and pricing, check that the changes are included in pricing contracts before signing as they may push your build unexpectedly over budget.

Whomever you go with, whether large or small, make sure that they plan to give you what you are requesting at the price that you agree to, and that everything is in writing.  I can’t state this enough but get everything in writing. Even if you have a conversation with your builder negotiating a deviation after you sign the contract, follow that call up with an email summarizing the call and ensure that they respond to it.

Each pricing contract or proposal should have items with set prices. It would be ideal if the entire contract had a set price, but there are often items whose cost will depend on the cost at the time and will be classified as a provisional sum. This is an estimate and can vary. If possible, limit the provisional sums and ensure that all communication concerning them is in writing. You definitely want to avoid a situation where you have to go back to the bank to borrow over your maximum because of overrun from provisional sums.

Things will go wrong with the build.  No build is perfect.  What you want to ensure in your contract is that you aren’t paying for the corrections. This is one advantage of a fixed price contract. If the plumber puts a pipe or water tank in the wrong location, it is between the builder and the plumber to sort it in the correct location.  If outlets aren’t where you discussed, again it is the builder’s responsibility to ensure that they are.

A fixed price contract is not the only way to go. We have had success with a builder that worked off a running total and estimated costs. There was overall good communication so we were always aware of what our costs were, and we could compensate for overruns by scaling back somewhere else.

 

Do They Encourage / Allow Site Visits Or Personal Inspections?

Every building site has hazards and builders must mitigate risks of those hazards by law. One requirement is that unauthorized and untrained personnel are not permitted unsupervised to the building site. Even though you may own the property, it seems counter-intuitive that you can’t visit your build. A good builder will accommodate for visits and provide the proper instruction to help ensure safety and/or provide escort through appropriate areas.

That being said, we recommend that you visit the site as many times as you desire. It is your house and property and we are sure that you will be curious. It also brings immense enjoyment to see each milestone as it is completed.  In addition, you can verify the work that is being done. The bank will likely request a valuer verify that work has been done before releasing funds, but it is good for you to see early on if significant portions of work aren’t being done as scheduled. This can be an early indicator that there is a problem either with the subcontractor’s scheduling, or the solvency of the builder. However, keep in mind that these visits are a distraction to the builder and too many will slow down the build process by diverting effort from building to escorting your and answering your questions.

It is also helpful to verify that things are as you expect and where you want them during your visits.  This is particularly important in the earliest stages when the initial location and layout of the house is being set. A small mistake of having the house too close to the setback, or having a plumbing pipe come up in the middle of the floor can easily be fixed only before the pad is laid.  You don’t have to be an expert to understand what is happening where, and you may have an escort there that can answer your questions.  If you do notice something that isn’t the way that you want it, it is best to discuss it with the builder (head contractor) as soon as you notice it. If you don’t, it may be too late.

In the US, it is more common to set up a camera on site. This can be helpful for you so you can see and catalog the work that is being done without visiting as often.  It can also be helpful for the builder because sometimes tools or materials go walkabout and it may be easy to determine what subcontractor or trespasser took something.  This is rarer in NZ though so it may be good to work with your builder if this is something that you want to do.

 

Can You Help?

Since nearly every New Zealander has a budget, there is always the temptation to ask if you can help on the build site to help keep the costs down.  However, this may not always be appreciated or legal. There are certain jobs that require a licensed contractor to do. You will not be permitted anywhere near those jobs without the proper licensing.  Even for the more mundane jobs, this may not be appreciated.  Some builders have standards of work that they expect of their employees. However, they cannot easily apply this to you. Remember that every job that they do is a potential reference for them and if the paint or trim is off, this will reflect poorly on them.  If there is any work that you do that is not up to their standard, then the repairs may cost you more in the long run.

In short, builders may allow you on site, but most builders will limit your involvement to only sightseeing.

 

Next Steps:

Now that you have chosen a builder, you now need to start Designing A House, and decide on your Building Materials.

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