Building your dream home or renovating your existing property should be the one of most exciting projects you embark on in your life. However, we’ve all heard the horror stories of epic cost and time blowouts, botched jobs and dodgy builders.

In this blog, we cover the ten biggest mistakes you can make when embarking on a custom home build or renovation project – and how to avoid them!

1. Making a large cash payment up front
   Unless you want to see your beloved hard-earned dollars going down the proverbial drain, never pay a builder (or any tradespeople, for that matter) a cash payment upfront – especially if you haven’t yet signed a contract. If your builder completes a low-quality job or, even worse, takes off and does carry out the job, there is little to no opportunity for you to get your money back.That’s not to say that you shouldn’t pay a deposit at all: a deposit is normal and required for most jobs when the contract is signed. As per the Home Building Contracts Act, a builder is limited to requesting 6.5% of the total contract price as a deposit when the contract value is up to $500,000.Professional builders also use contracts with an inbuilt payment structure, which outline when payments should be made and for how much. The customer is given an opportunity to assess the quality of the work prior to approving payments, giving you more security over your money.
2. Choosing a builder with the wrong skills and experience
   Not all home builders are alike. Most builders specialise one of the below very different areas.
   • Project builders build hundreds of homes a year from a variety of pre-designed plans. Typically, they provide standard floor plan designs, materials and fixtures and finishes for you to choose from. Their focus is primarily on getting lots of houses built fast.
   • Custom builders carry out a small number of projects a year. They tailor your home to your specific design requirements and needs, plot of land and lifestyle. They usually seek to understand your needs, wants and aspirations before building.
   • Renovation & extension builders are a highly versatile type of builder. Renovation is often more complex than building a new home from scratch due to hidden issues. These builders usually engage more with customers than any other builder, not least due to some customers living on site while the renovation and extension is being carried out.

   When researching builders, ensure you’re looking at the right type of builder. If you’re planning to do a major renovation, extension or a custom build, it’s critical to choose a builder who is specialised in these areas to get the best result.

3. Choosing an unlicensed or uninsured builder
   One of the most important ways to ensure you don’t get scammed by a dodgy builder is to ensure that they tick all the boxes when it comes to running their business properly. Critical elements include:
   • The proper licences: ensure the builder is registered, licensed and legally permitted to be involved in building and construction. You can check the builder’s registration through your relevant state authority.
   • Proper insurances: at a bare minimum, a builder should have public liability insurance, worker’s compensation and home indemnity insurance (also known as home warranty insurance, home building compensation or domestic building insurance). Ask for a copy of their insurance certificates.
4. Choosing a builder who’s the wrong ‘fit’
   Choosing a builder is like choosing a spouse – you need to make sure that you are the right fit to get your fairy-tale ending. You need to put in the hard yards early: take the time to  research builders before anything else to ensure you get a builder that you can trust, that will do an amazing quality job and that will give you an amazing experience along the way. Key steps include:
   • Look at customer reviews on their website, Google or social media channels.
   • Phone them up and arrange to meet these builders in person.
   • Really question whether they have the skills you need.
   • Ask the builder for testimonials and references from previous customers.
   • Make sure that the builder that you meet with and have a connection with, is going to be the primary builder on your project site day to day.
   • Above all, ensure your builder listens to you and seeks to understand your underlying issues.
5. Choosing a builder who doesn’t listen
   We can’t stress the final line of the above point enough – if you hire a builder who a) doesn’t listen to you or b) doesn’t seek to understand your underlying needs, it’s unlikely that the end result of your project will be satisfactory. There are many builders out there that care only about their bottom line and don’t give two hoots about your real needs. However, it’s easy to winkle out the wrong builders at your very first meeting.If, when you meet with a builder, your discussion is short and they don’t really interrogate you about your project, why you’re doing it and your goals – instead just offering to quote on what you tell them you want – they’re not really listening or seeking to understand.On the other hand, a builder who actually questions you about your underlying problems, needs, wants, aspirations and concerns at that first meeting is the type of builder you want. It’s that type of builder who’ll be easy to deal with during the construction phase, and who might even be able to come up with alternative solutions that fulfil your underlying needs for a lower cost.
6. Failing to establish expectations upfront
   The key to a good builder-client relationship is establishing expectations early on. Without an understanding of each party’s key responsibilities and expectations, communication can easily break down during the construction stage.You must communicate expectations that you have of the builder; equally the builder must communicate their expectations of you. Expectations you should have of the builder might include the following:
   • The builder must communicate frequently using an agreed communication style; the communication must be maintained throughout the project.
   • The builder must keep you updated on the schedule and updates on the project.
   • The builder must project manage the entire job as this is what they have trained to do in their profession. It is not up to you to manage any of the building works.

   Expectations the builder may have of you:

   • You must be quick to respond to selections and any other decisions about your home build.
   • You must communicate with the builder if you have any worries or concerns, or if the builder has done something wrong, so that the builder can respond appropriately and rectify any issues.
7. Accepting the cheapest quote
   With your money on the line – and most likely a substantial amount of it – avoiding cost overruns is always a key priority. However, never assume that the cheapest quote is the best value!If a quote is significantly cheaper than others, then you need to be very cautious. There are a few reasons why a quote might come in significantly cheaper, and few of them are good for you:
   1. The quality of materials, trades or customer experience has been substituted somewhere.
   2. The builder has made an error in quoting and hasn’t considered everything for the job.
   3. The builder has knowingly submitted a low quote price in the hope that he will win the job, but will try to sting you with variations during the course of the project
   4. The builder has hidden costs in the list of exclusions.

   We recommend obtaining at least three quotes so you can get a good sense of the ‘market price’ for your project. If you receive a quote that’s much cheaper than the others, the red flags should wave and you should check it very carefully before accepting it.

8. Accepting a confusing quote
   The quote your builder provides is essential when nailing down your budget. Your builder should provide you with a comprehensive, clear, understandable quote that has as many items as possible included. This should be highly detailed but not full of builders’ jargon that looks like gobbledygook to you, nor should it be chock-full of inclusions and exclusions.When you get your quote, go through the list of inclusions and exclusions with a toothcomb to unearth any items that may have been assumed by the other. For example, a builder may include lighting in their quotation, but only includes the batten, not the light fittings; whereas you may assume the light fittings are included. If you’re unsure, obtain clarification on what is excluded from the quote so that you both fully understand where the responsibility for an item lies – and the true cost of the build so you can budget for it.Other words you must be alert for in your quote are indicative, provisional sum and prime cost.  These mean the builder hasn’t committed to exact prices, so the costs may increase.
   • Indicative is the estimated price or the likely price range for which something will cost to supply or install.
   • Provisional Sum (PS) is a cost allowance made in the quotation to cover both the supply of the materials and the labour of the foreseeable work. The work requirement is uncertain at the time and cannot be accurately quoted.
   • Prime Cost (PC) is a cost allowance made in the quotation for the supply of specific items which have not been finally selected at the time of quotation (such as tiles or tapware). The PC is limited to the cost of the material and does not include the cost of any labour to complete the installation works.

   It is vital that you understand these when reviewing quotations so you are prepared and are able to budget for any variations before starting the project. You should allow for at least 5% contingency in your budget to cover any changes (such as sudden increases in material costs, alternative fixtures and fittings if there are stock issues with your chosen options, or additions/upgrades to the project).

9. Not signing a contract
   One of the most important pieces of paper regarding your project is the contract you sign with the builder. A clear, detailed contract ensures protection for you and your builder. Embarking on a project without a signed contract is like driving without insurance – it can get extremely expensive for you extremely quickly!Most builders use home building contract templates from industry associations like Master Builders Australia or the Housing Industry Association (HIA). A well-crafted contract includes the following things to ensure potential disputes are avoided:
   • The description of the works is clear
   • The inclusions and exclusions list is clear
   • The agreed contract price is inclusive, reasonable and clear
   • The process for resolving disputes should they arise is clear
   • The key construction stages and review process is clear
   • The milestone payment dates are clear

   Get legal advice if you need to ensure the contract is fair and impartial, as even small changes to contracts can cause large headaches down the line. If you don’t have a contract and something goes wrong during the course of your build, then you have no right to recourse and you are left in a very vulnerable position.

10. Not doing your homework
    You may have noticed something in common about the above nine points – none of them relate to the actual nuts and bolts of building or renovating your home.That’s because by putting the proper work in before the building works start – partnering with the right builder, protecting yourself legally, firming up a solid budget and satisfying yourself that all the boxes are ticked – the actual construction should be relatively stress-free. And you’ll get the home or renovation of your dreams, on time and on budget.Perway Construction Services is Perth’s most recommended and experienced custom home, renovation and extension builder. We’re here to help you navigate the building process and ensure your project is completed just as you envisage it. To experience Perway quality, get in touch today.