Building a new home? Consider the PRO’s and CON’s of a Custom Builder vs Project Builder

We have recently been approached by friend who had bought a block of land and was looking to build. They had visited several display homes and project builders but were becoming confused and as they put it, “getting lots of shock therapy” when they saw the quotes. They contacted us and asked what is the different between us “builders” vs these project homes in a display village.

First things first, there are pro’s and con’s to both. Anyone that tells you otherwise is obviously pushing a sale or trying to mislead you. Secondly, there is no right or wrong choice – you need a builder to suit your needs. All builders offer different results, services, pricing, and time frames but in the end, we all build to the same building code standards.

We have put together the below table with notes to help provide a comparison of the typical custom builders vs project builders. We note that this table and information contained herein is NOT representative of all builders who class themselves in either category, however in our building and personal experience, and that of relatives & friends who have built with either option, this is our view and comparison of the “typical” norm.

We consider ourselves a Custom Builder. We work with you, we don’t just want clients, but we want to develop and build upon relationships to encourage repeat business, referrals and word of mouth advertising. Currently over 95% of our works to date have been repeat clients or referrals.

 

View the end result – display homes  

 Project Builder – display homes

 Custom Builder – no display homes

Project Builders generally have display homes grouped within a display village so you can visit numerous project builders at once and compare. This gives you the opportunity to see the end result including quality of finishes and design layout. Although Custom Builders don’t have specific display homes, you can view other builder’s display homes, search the internet, visit supply shops, bathroom & kitchen showrooms, stone warehouses etc and put together what you like.

 

Design and Layout  

 Project Builder – standardised plans

 Custom Builder – customised to suit your needs and budget

Project builders have set plans & designs, they generally only allow a small margin for change. This is well suited for those who don’t want to design their own home and are happy to select from a brochure.

Project builders have economies of scale in this area as they have drafted a limited number of set plans and they just rehash them, saving the client the full fee on redoing architecturals however they would factor in their price a charge for adapting the standard plans to the particular site.

Custom builders build you whatever you want, and obtain the architecturals and engineering to suit. A benefit of the Custom Builder is you can select exactly what you like and put it together in your house.

Custom builders incur full costs of architectural for each house as they are tailored to the client. Another benefit of getting your own plans drawn is that Custom Builders allow you to keep copyright of your own plans.

 

Price  

 Project Builder – comparable

 Custom Builder – comparable

Project builders have a set price you can see before you start choosing your package, and also a set fee for extra inclusion packages (with marketable names like their “gold package”, “platinum package”). Base packages normally do not include driveways, carports, patios, landscaping, air-conditioning and sometimes flooring. Some packages only include basic budget finishes such as tiling only in wet areas (not to ceiling), laminate or thin Stone benchtops etc, cheaper quality and limited range products, accessories and fixtures.

Custom builders quote each project individually either a) based on what you want, or b) based on budget and the builder can show you where to save (suggest design options, cheaper materials such as tiles or carpet options, finishes and fixtures).

Tip – when comparing prices from all builders is you need to compare apples to apples.

A big difference that sets custom builders apart from project builders is that they tailor everything to suit the client – so if you are happy with a $1,500 kitchen appliance package, or a $4,000 mid-range “European” package, or a high-end $25k package (Miele or Ilve), a custom builder can accommodate your wishes.

Project builders also have a limited range you can choose from for your finishes (tiles, carpets, stone etc). This is due to their bulk-buying capacity at a standard price point. Even if you select their more expensive packages, again the range is usually limited.

The benefit with a custom builder is that they usually put in a provision sum in the contract however if you wanted cheaper or more expensive product, the price is adjusted accordingly. Eg if there is a provisional sum of $30/m for tile supple and you have found tile you would like that the builder can order for $15/m, then the difference in the provisional sum is refunded back to you as a variation to the contract.

 

Cost of Building (in general)

 Project Builder – comparable

 Custom Builder – comparable

The cost of building a home may seem expensive whichever way you go, however a lot of the cost goes into the “unseen” things, including foundations, structural & framing, engineering, council fees, plumbing & electrical etc.

Project builders usually have a team of staff who do this or specific contractor agreements whereas custom builders usually get multiple quotes from various sub-contractors to ensure the cost of the trades is the best possible.

 

Inclusions / Exclusions

 Project Builder – Standardised packages with upgrade options

 Custom Builder – tailor made to suit the client

Project builders provide a base house and you pay for the extras like driveway, patio, landscaping – this is good if you want finish your home yourself or when funds are available. Just be mindful that if you commission your own building works eg concrete driveway, you will generally pay the retail price for tradesmen & materials. If you use a Project Builder you may want to consider include in your contract all of the major trade-based items for your home to see if they can obtain their cheaper rates and economies of scale if it is done in conjunction with the build. Furnishing likes blinds & carpets are generally arranged & install yourself.

Custom builders are fully flexible and can do what you like – from a fully complete turnkey home, or a lock-up only contact and any stage in between. If you know a tiler friend or painter or wish to do some DIY to save yourself some costs, custom builders can accommodate this.

A recent project we completed was a new house build where we were only engaged to build the house to “lock-up stage” and the owner wanted to commission the balance of the build himself, and also undertake some works (painting, landscaping etc) himself. Custom builders work with the clients to do as much or as little as they need. Although we can get trade discounts on materials, fittings and fixtures, some people may get it even cheaper (or free) through a friend or relative. Custom builders allow you to capitalise on any opportunities you have. Some restrictions apply for WH&S and insurance purposes when it comes to contracts & site access.

 

Complexity of the Build (sloping block, Battleaxe block, narrow block)

 Project Builder – generally not facilitated

 Custom Builder – builds what you want, where you want

We have seen some project builders have refuse to build on certain blocks including very sloping blocks.

A Custom Builder normally accepts such work and factors into the quote the added complexities to give a true price indication to the client at the start. The Custom Builder has the flexibility to engage an architect and engineer to devise a suitable and appropriate home on any land condition ensuring it is compliant with building codes.

Demolition and Earthworks

 Project Builder – generally not accommodated, sometimes negotiable

 Custom Builder – all part of the job

Custom Builders manage the build from start to finish including all demolition, asbestos removal, earthworks, retaining walls, tree clearing, bushfire reports etc. – It’s all part of the job. Our experience with Project Builders is that they limit accepting any complex constructions and rather pump out standard houses.

As a Custom Builder, we have priced a lot of pre-build works for clients over the past years who have signed on with a Project Builder to build their home, but then realised they first needed to build their own retaining walls or demolish the existing house prior to the project builder starting on-site.

 

The sales pitch – the push for more floor space

 Project Builder – Sales agents, enough said

 Custom Builder – you speak with the actual builder who has your interest at heart

We have encountered many project builder sales agents in our time who push for a signed contract, generally trying to upsell to you based on the biggest floor area you can get for a certain price. However in our discussions they failed to mention quality of the house and design flow. Project Builders generally have their set design plans and stick to these claiming they are tried and tested and popular.

If you are budget conscious, consider speaking to a custom builder who can help you achieve a smaller floor space area design with a bigger feel, such as incorporating the living area with the patio using bi-fold doors, open plan kitchen, grouping bedrooms together, group plumbing together (kitchen near laundry & bathrooms) etc. A custom builder is more inclined to make the design work for you, as they are not restricted to the “set” layouts the company gives them to sell.

This article is from Vati Projects, and you can read the full article here: