Why Comparing Builder Prices Can Tell You Less Than You Think

Take the same idea for a new home to a volume builder and a custom builder and you can end up having two very different conversations about price.

Both builders may be looking at the same number of bedrooms, the same block and the same general idea for the home. But they’re working from two different business methodologies from the outset.

Until you understand that difference, it’s very easy to put two prices side by side without really knowing what each builder has priced.

The Price Only Makes Sense Once You Know Which Building Model You’re Looking At

A volume or project builder is generally working out how many homes they can build in a year.

When you come to them with your idea, they’re looking at whether there’s a plan on their database that suits you to a point where you can say, “Yes, I’d like to build that house.”

It may not suit everything about the way you live, but for plenty of people that’s fine. They want a home that fits their needs closely enough, at a price they’re comfortable with.

A custom builder starts with your ideas and develops the home around how you actually want to live. We want to understand your family, your children, your pets, whether you entertain and why you really want to build the home in the first place.

That leaves the two builders answering different questions:

1. Volume builder: Is there a home we already have that suits you closely enough?

2. Custom builder: What home is going to suit your lifestyle, your needs and your budget?

That’s why there is no set price for building a custom home, because every home is developed and priced on its own merits.

And the difference continues well beyond the floor plan.

The Way Your Builder Buys Today Can Still Matter Years After Handover

Volume builders will quite often chase the cheapest price they can get from a material selection or a trade.

We hear about builders moving from one trade to another to save twenty dollars here or a hundred dollars there. That creates a very transactional relationship, and trades who are continually being pushed down on price still need to find a way to run their business and make money.

Quite often, that creates pressure to find shortcuts.

We work differently because the relationship extends beyond us and the client. It includes the trades and suppliers working on the home as well.

Our trades may charge a little more for their services, but we’re looking at both the economics of the build and the quality of what’s being delivered. Over the years you own the home, better workmanship can mean less maintenance and fewer future issues.

There’s another benefit that can be easy to overlook while you’re building.

Our air conditioning contractor, for example, is also the service and maintenance contractor for the brand they install. So:

• they know the product they’re installing;
• they have the right training to service it;
• they can get the parts if something fails; and
• you know who to contact if you need help later.

Anything manufactured can eventually fail. It could be your air conditioner, oven, cooktop or hot water system.

When that happens, having the person who installed it also able to service and maintain it gives you a lot more peace of mind.

That difference can be difficult to see when you’re looking at a price at the start of the build, but it becomes much easier to appreciate once you’re living in the home.

The Better You Understand Your Own Priorities, The More Useful the Price Becomes

Before you start asking builders what the home will cost, it helps to get clear on three things.

1. Work out what you actually want: Go further than bedrooms and bathrooms. Think about how your household works day to day, what matters to your family, how you use the home and what you want it to do for you over the years you’ll be living there.

2. Understand which type of building model suits you: Do some general market research into the difference between a custom builder and a volume or project builder. You may decide a standard plan suits you perfectly well. Or you may want more time invested in developing the home around the way you live. Knowing that before you compare builders gives you a much clearer idea of what you’re actually comparing.

3. Be upfront about the budget you’re comfortable with: People can be quite cagey about providing the amount of money they actually want to spend, and I understand why. But if we have a clear understanding of your top limit and where you’re comfortable, we can design the house around that budget and use the money wisely. 

Custom doesn’t necessarily mean expensive. It means putting the budget you have into the parts of the home that matter most to you.

You can’t make something bigger and have it cost less, or keep adding more and expect the price to come down. But when we know the budget from the start, we can make better decisions about where that money goes.

Once You Know What’s Being Priced, Find Out How Much of That Price Can Still Move

Understanding the difference between builders gives you a much better starting point when you compare prices.

Before you sign, there’s one more part of that price worth understanding properly: how much of the figure you’ve been given is genuinely fixed.

If you’re close to signing, it’s also worth reading our four questions to ask before you sign a builder contract.

Comparing quotes for a new home in Townsville? Contact us or call Rob Rule on 07 4778 2074 to talk through what your price should include.

Comparing Builder Prices: Frequently Asked Questions