The preliminary agreement allows us to prepare the optimal type and quantity of plans and reports that will enable us to provide homeowners with a reliable building quote for the exact house they want to build and live in.
The copyright of the plans and reports created are passed to the homeowners.
As the builder, we coordinate the information between clients, designers and engineers to prepare the documents shown in the preliminary agreement.
By relying on the information available on the above plans and reports, we can perform detailed quantity take-offs and obtain quotes from subcontractors and suppliers. These form the basis of our construction estimate and ensure we present a building quote the homeowners can rely on when organising their finances.
The preliminary service starts with an in-person meeting. We meet with the clients and designer to go through the design ideas and requirements. Upon receiving the first draft of the designs, we will have another meeting with the homeowners to provide them with our feedback for any changes they may want to make.
We allow up to three sets of reviews to ensure the final planning drawings represent the exact home our clients want to build and live in.
Different from just a concept floor plan, planning drawings give us information on window and door sizes, joinery, facade elements, site considerations and so on.
At the completion of the planning drawings, we start the cost estimation while the engineers prepare the civil plans and the preliminary footing report.
These engineering reports give us enough information to get a quote from our suppliers and subcontractors when estimating the footing cost and avoid the risk of an inaccurate allowance when a square metre rate for footing construction is used.
Moreover, upon presenting a quote that the client is happy with, we utilise the same planning drawings and civil plans to apply for council planning approvals. Depending on the type of application (Deemed to Satisfy or Performance Assessment), we can save a significant amount of time in getting started with what tends to be the hardest part of council approvals. The building approvals do take longer as the construction documents take longer to prepare, but the process is simpler and more predictable.
Obviously, the homeowner could prepare these plans and reports themselves by working directly with a building designer and an engineer of their choosing.
However, because designers and engineers will charge a builder they work with regularly, less than they would charge a once-off homeowner, chances are there will be no cost savings in the homeowner preparing these documents. In addition, they would end up with a less effective design when it comes to construction cost, as well as less construction efficiency due to the lack of builder’s input in the design.
So to conclude, we truly believe that what we provide via the preliminary agreement is the best solution for any homeowner looking at building a custom home while making sure they do so within their budget.
This video explores how a custom home builder is different from a volume/project builder.
Understanding these differences will enable you to better prepare for what is to come during the many months of your home building project.
Video transcript
Those who think that building a home instead of purchasing an existing one will save them money, are for the most part, wrong.
Going through months of designing, council approvals and construction (while paying rent and mortgage at the same time) is an expensive exercise, especially if you don’t take a well-planned set of steps along the way.
Yet, the possibility of living in a home that’s exactly like you want it is often the primary reason why homeowners choose building over buying.
Quite often, for those building their first or second home, the research starts around volume builders’ display homes and looking at their design catalogues.
Some will be lucky to find a design that fits their block, their budget, and most importantly, includes everything they want in their new home.
Others will find out that while they like bits and pieces of these designs here and there, getting to their ideal home will require working with a builder or designer.
In a future newsletter edition, we will go through a bunch of reasons why involving a builder in the design process benefits the homeowner in so many ways.
But for today, let’s look at the difference between a project/volume builder and a custom home builder and why understanding this difference will prepare you for what is to come during the many months of your home building project.
Although not all project home builders are big companies, almost every big building company is a project home builder, hence volume builders. The business model is what distinguishes a project home builder from a custom home builder like HBC Homes.
This business model has got its merits and is primarily designed to benefit from the economies of scale.
By building homes from a predetermined range of designs with inclusions that remain the same, the builder can produce more homes within a set timeframe. More importantly, they can achieve this output increase without needing to increase their number of employees and other overhead costs at the same rate.
Finally, they can negotiate better deals with suppliers for that specific range of products they use in their builds.
However, building homes is a labour-intensive process. As such, for every dollar spent on materials, at least two dollars is spent on subcontractors (depending on whether the subcontractor is supplying the materials).
With increased output, the builder can demand a lower rate from their subcontractors (using the promise of secured work) and, if they choose, pass over the cost saving to the client.
Now, the volume builders need volume, i.e. lots of clients to build for. To get more clients, they compete on price; or “free” upgrades and a bunch of non-sense marketing gimmicks.
You have probably heard the old saying that competing on price is a race to the bottom. But do not think that the proverbial bottom is these big builders going bankrupt. They probably won’t. Instead, the bottom is the quality level of the homes they build.
Yes, they will comply with the minimum requirements of the Australian Building Standards, but that is typically as far as the quality goes.
A house built using cheap materials, and most problematically, subcontractors hired based on how low they can offer their services, is anything but a desirable home to live your life and raise your family.
Imagine a hospital that employs surgeons based on who charges less to operate their patients!
Quite a few of our clients did build before with one of Adelaide’s project builders. When we asked them what they struggled with the most during the building process, they told us some of the following:
We initially liked one of their designs but then asked them to change a few things to better match what we wanted. Not only were we charged hundreds (and sometimes thousands) for these changes, they also took weeks to modify the plans and even missed some of these changes.
We signed a contract that we thought was within our budget, and although we planned on upgrading a few things, we later realised that a lot of the inclusions were nothing like we had seen at their display homes. With everything, from electrical to plumbing fixtures, from tiles to joinery, we had to pay thousands to change to the inclusions we wanted.
We knew that our footing allowance was on the low end. We had asked our neighbours who told us how they had spent more on their footing. However, only after footing was poured did we learn the footing cost and that variation bill forced us to limit upgrades on things we value and use all the time.
We doubt any business is intentionally set up to offer inferior products and services to their customers, which is the case for most project builders.
The common issues of sub-par build quality coupled with a lack of regular and reliable communication happen primarily due to the size of these building companies. While economies of scale have immense benefits with commodity companies, building new homes, even project homes, is not a commodity.
Building new homes is a project management service where more than the home construction, it is the homeowners’ needs and wants expressed through their communication that needs to be managed to their satisfaction.
For the most part, volume builders are anything but excellent when it comes to customer communication. Just look at their online reviews.
A custom home builder, on the other hand, tends to be a small boutique family-run business.
Working with them gives you direct access to those in charge, typically the business owners, who can quickly make decisions and move the process forward in your best interest.
Compare that to a project builder where you initially deal with a sales agent, and after the sale is made, you are pushed to a myriad of admin people, project coordinators and supervisors.
This difference alone is often enough to motivate a client to only look for a custom home builder.
Here are some other important reasons why more homeowners are choosing to build with a custom home builder and avoiding the volume builders:
A custom home builder will work with you to design exactly what you want and encourage you to look at every design detail to determine the best alternative for you.
A custom home can and should be designed to your budget through smart land utilisation, purposeful space integration and practical inclusions.
You could purchase a sloping, narrow or hammerhead block of land at a discount. However, if you do not couple it with a custom home designed specifically for that block, you could end up with a lot of money wasted on land treatment and make-shift footing when trying to fit a project home.
Good, better, best doesn’t seem to cut it when building your dream home. With so many options of fixtures and fittings, a custom home gives you all the freedom to have exactly what you want for those finishes that matter the most to you.
Most custom home builders will accommodate a true start to finish service if that is what the client needs. When done through a builder, early tasks like demolition, earthworks, retaining walls and tree clearing, and later external works like stormwater and driveways can save the homeowner a lot of time and money.
So there you have it. The difference between a custom home builder and a volume project builder. What do you reckon? We’d love to hear your thoughts.
Once you have secured your block of land, the only effective step forward is a set of preliminary architectural plans, also known as planning drawings (PDs), the copyright of which is yours as the homeowner.
The wrong type of plans
It can seem like a viable shortcut to grab one of these and go around asking builders for a quote.
While there are many builders out there that quote on sqm rates, sign on print-screen copyrighted plans and promise anything for a contract, the above floor plan is only useful to a real estate agent.
That’s because a concept like this is missing a lot of information, and by a lot I mean almost everything:
Framing
Windows and sliding doors
Cladding
Roofing
Internal lining (ceiling height, cornices, etc.)
2nd fix carpentry (doors and hardware)
Joinery
Electrical and
Flooring
As no supplier or subcontractor would risk their bottom line by providing the builder with a quote for a concept design, the builder will have to make assumptions and random allowances. Whatever number they land on is some sort of a budget estimate – although you wouldn’t want to budget on that.
The right type of plans
Different from just a concept plan, the planning drawings will include:
Site plan
Floor plan(s) and
Elevations
Drawn to scale, making it easy for any estimation software to calculate the quantity takeoff, notice how each type of plan provides very important information which ensures you know what you are getting and the builder knows what they are offering.
The site plan will show the position of the house in relation to the block’s boundary as well as the quantity and distribution of paving and landscaping.
The floor plan, besides the obvious room measurements, tells us all we need to know about the windows and door sizes as well as subtle information on the roof layout (notice the opaque dashed lines).
The elevations leave no room for interpretation by clearly showing the type of cladding to be used, roof pitch degree and ceiling height.
Another benefit of planning drawings
Besides providing your builder(s) with enough information to properly estimate the cost to build your home, a complete set of preliminary architectural plans is what the council will require when you apply for their planning approvals.
Since 19th of March 2021, as long as your plans comply with what is called Deemed to Satisfy requirements (a private planner will assess that for you) of the Planning Code, you could save a lot of time by obtaining the planning approvals within days, as opposed to an average of 4 to 6 weeks in the case of a Performance Assessed type of application.
So what exactly should you do
Armed with the above information, should you simply contact a building designer and get them to prepare a set of planning drawings for you?
You certainly could. And we have met many homeowners that have done exactly that and then gotten in contact with us and other builders to get a quote.
On many occasions, they find out that their budget is not enough to build what’s drawn.
That’s because most building designers and architects use the sqm rate method when considering your budget. Their success is measured by how well the client ideas translate into their designs. And whether a builder can construct to the intended budget is more of an afterthought.
Compare that with the builder who will only make his profit if the house is built and therefore has a vested interest in your designs staying within your budget.
An experienced builder understands how beyond the size of the build, the exterior and the interior elements have a significant effect on the construction cost, which is why the chances of designing to your budget are significantly higher if you involve a builder from the start of the design process.
What about the copyright
If a builder is offering the designs at their expense (very common with the project builders), it is almost certain that they control and own the copyright.
However, if you are going to pay for the designs, it is important to check with the builder what their copyright policy is.
As part of our preliminary agreement, here at HBC Homes, the designs and engineering reports we prepare remain the copyright of the homeowners.
To us, that goes beyond the fact that you are paying for them.
We despise the idea of locking them in and making it hard for them to go elsewhere. Instead, we want to build for only those homeowners who want to build with us.
And if for whatever reason, they do not see the value in our services, we sincerely want them to continue the process as smoothly as possible and get into their new home as soon as possible.
If the promise of building a custom home in 12 weeks is marketing BS, how long does it really take to build your home?
The most honest and unsatisfactory answer is: it depends.
“It depends on what?” you might rightfully ask.
To which I would reply, “It depends on how long each of the steps listed below takes.”
Designs
There are three main architectural drawings, each serving a different purpose:
Concept Drawings (a simple floor plan);
Planning Drawings (site plan, floor plan(s) and elevations with basic measurements);
Working Drawings (detailed information on each plan of the Planning Drawings plus more details on footing, roofing, plumbing, electrical and cross-section construction information).
While the architect could start and finish all the above within a couple of days, the homeowner reviewing and adjusting these plans to best match their vision takes weeks and sometimes months to finalise.
Allow between six to eight weeks for the designs.
Engineering and Council Approvals
Civil Plans are the only engineering document required once you finalise the Planning Drawings when it comes to the Planning Approvals.
From the 19th of March, based on the new Planning and Design Code, it can take anywhere from 3 days to 30+ days to get the Planning Approvals (that’s not allowing for a few weeks of potential public notification).
When it comes to applying (through a private certifier) and obtaining (council stamped plans) the Building Approvals, the list of the required documentation looks something like this:
Working Drawings;
Engineering Footing Report;
Energy Rating Report;
Structural Calculations;
Framing Design;
CITB Levy.
Once completed, we send all the above documents to the private certifier, who, after doing their due diligence, send them to the council for approval.
Allow between three to six months for the engineering and council approvals.
Estimation and Quoting
Historically it would take us two weeks to estimate a project and a building quote.
Currently, with suppliers stretched to their maximum capacity and subcontractors spoiled with more work than they know what to do with, it takes us to double the time.
Allow at least four weeks to get a reliable and detailed quote from a professional builder.
Selections
Between two to three meetings with the builder and many visits to various suppliers, selections take time.
They are not something to rush through nor something to procrastinate on.
Allow four to six weeks for selections.
Loan Approval
When it comes to the construction loan approval, all the builder can do is provide the homeowner with the bank pack, i.e. plans, contract, specifications, and insurance.
From there, it is with the mortgage broker and the banks.
Based on what we have recently seen with our clients, allow at least four weeks for the loan approval.
Construction: Footing
Somewhat of an industry standard, the construction clock starts ticking once the slab is poured.
And yet, depending on the type of footing and the slope of the land, a lot may need to happen prior to that.
From retaining works to soil movement, before any trench is dug and steel installed, the work required before the concrete is poured may vary a lot from project to project.
Allow two to four weeks for footing plus a few more for concrete curing.
Construction: Framing
The current timber shortage makes determining how long the framing stage will take more of a guessing endeavour.
As a consequence, more builders than ever are now building with steel frames. But in doing so, the time to get the steel frame designs (see Engineering and Council Approvals above) is now 75 working days.
Yet, the unchanged time differentiator remains the number of stories your house has.
Allow between four (single-storey house) to eight (double-storey house) weeks for framing.
Construction: Cladding and Roofing
Like the framing stage, when it comes to external walls and roofing, the time to complete a double-storey house doubles compared to a single-storey one.
The materials used also play an important role.
Lightweight cladding is quicker than good old brick. A steel roof is faster than a tiled roof.
Allow between six (single-storey) to twelve (double-storey) weeks for cladding and roofing.
Construction: Lock-up and 2nd Fix
Although this may appear to be nothing more than an unpainted front door installation from the street, there is a great deal happening inside.
That a lot involves:
First fix plumbing, electrical and aircon;
Insulation and gyprock;
Flashing and cornices;
Second fix carpentry;
First coat of paint;
Tiling; and
Joinery.
These are all done by a different group of contractors and one group at a time. A delay in one of the groups creates unpleasant surprises for the rest of them.
Allow eight to twelve weeks for lock-up and 2nd fix.
Construction: Final Fixes
This stage should take the least amount of time when compared with the other ones.
However, similar to the previous stage, the contractors are lined up in a dependable fashion, which increases the risk of delays if they are late to complete their part.
Included in this stage are:
2nd fix electrical and aircon;
Benchtops;
Plumbing fixtures installation;
Flooring;
Mirrors and shower screens;
Painting; even
Builder’s cleaning.
Allow two to four weeks for final fixes.
Construction: Weather and Variation Delays
Very common for projects starting in winter, weather delays can be expected since construction starts outdoors, and bad weather can impede outside work considerably.
However, variation delays are likely to be longer than weather delays.
Although we ensure all inclusions are selected and confirmed with our clients before construction starts, it is still typical for someone building their dream home to change their mind and modify a few things in the house.
Depending on how far in the process that happens and the type of changes that occur, sometimes a simple change can delay the project by weeks, and when it happens more than once, that can turn into months of variation delays.
Allow two to four weeks for weather and variation delays.
Conclusion
Some of the steps listed above can happen simultaneously (even if partially so), and at HBC Homes, we do all we can to complete each stage on time through careful scheduling and management.
And yet, a lot that goes into designing and building a custom home is affected by other factors and people outside the builders’ control.
So, to answer the how-long question using the best/worst-case scenario, from the initial design brief to the final handover and getting the keys to your home, it can take anywhere from 55 weeks to 92 weeks.
When in search of a builder, you will come across:
– the volume builders,
– the custom builders, and
– quite a few clueless builders.
When you talk to people who have successfully built before, they speak of that good feeling when they have finally decided on their builder.
And while the feeling is all nice and good, you cannot skip due diligence (were we to check with those who struggled with their build, they too felt good at one point, when they had decided on their builder).
While there are dozens of things you need to look for when deciding who will build your home, we would like to point out three:
1. Care
Trust us. We care! – said every building consultant until they signed the contract.
It’s due to lack of care that a volume builder delivers a simple single-storey house that they have built dozens of times before with a virtually infinite list of defects and thousands of dollars in unexpected variation bills.
The problem with care is that you cannot teach it, and it is not based on experience.
Instead, it comes from a deep understanding that the builder’s work has a massive effect on the financial and emotional wellbeing of the homeowner.
A builder is not much different from an accountant in that they too have a fiduciary duty to their client. They must care to deliver what they know to be the best for the homeowner and charge a fair price for it.
As such, there is no room for an us vs them mentality. No builder should try and squeeze every cent from the homeowner, nor should the client attempt to push the builder to discount prices or giving things for free.
2. Knowledge
It’s terrifying how many builders out there have no idea what they are doing.
While some have field experience, having previously worked as carpenters, painters, etc., others drove trucks and mixed cocktails before getting their builder’s license.
The barriers to entering the building industry are a joke. A Cert IV with some online assignments is all one needs to get a builder’s license and start going around beating quotes in the hopes of getting some quick work.
These are the cowboys of the industry who, sooner or later go bust and cause massive troubles for their clients.
On the other hand, the builder that has been around for a couple of years will probably have enough knowledge and experience to deliver on their promise.
However, when it comes to building your house, specialised knowledge will serve you better.
Rather than a builder who claims to do everything (we were once that builder), you would benefit more from a building company that specialises in similar projects to yours.
3. Systems
Pen, paper and trying to remember everything is a formula for disaster when a builder has more than one or two homes going on simultaneously.
Building a home is so much more than putting building materials together.
From that first client meeting to months after handover, the project’s success is based on clarity of communication and the ability to store, organise, and refer to project information while ensuring the build is tracking on budget at every stage.
It’s only through well designed and tested systems and processes that a construction company can minimise mistakes and deliver quality homes on time.
The good news is that technology and specialised software make it possible for builders, regardless of their size, to implement systems that support their work affordably.
At HBC Homes, the key software we use to support our systems is:
– CostX for quantity takeoff and estimation (no per sqm quoting, ever!);
– BuilderTrend for project management and cost tracking;
– Xero for financial accounting;
– Google Workspace for emails and online file storage (Google Drive); and
– Foxit PDF Editor Pro for marking important information on plans and reports.
As we said initially, there are a dozen things you need to look for in a builder before engaging their services. And yes, you should also look for that good feeling when dealing with them.
But find out how they care for their clients, if they possess the knowledge to deliver on their promise and whether they rely on systems to support their processes, and you will be all right.
Some of the most common enquiries we get sound something like this:
How much for a double-storey 4 bedroom home?
How much for a 270sqm home?
How much do you charge to build a normal home?
How much … (you get the idea).
While most project builders will show you a catalogue of floor plans with a starting from price, as a custom home builder the closest we can get to providing you with cost information during our initial contact and without being grossly misleading, is by referring to the building price of our past projects.
And yet, by providing you with the building price of that exact home you saw in our video walk-through, we cannot help but still be slightly misleading. Here is why.
The problem with our past projects price
As a custom home builder, we take pride in the individuality of each home we build for a handful of Adelaide families each year. A lot of time and energy goes into each one of them and the end result is our clients’ happiness.
But for you to use these homes in determining your budget a few issues arise.
Footing Cost
Did you know that the starting-from prices on project design brochures are often advertised without the footing cost? The logic goes that they are providing you with just the cost of the house. So long as they teach your house how to levitate, surely you can budget based on that starting-from price!
In reality, footing cost can be a big part of the total cost to build. Much depends on the soil test results, as well as the levels of your block.
Inclusions & Irrelevant Upgrades
While it may look nice, that shiny porch facade will cost upwards of $500 per square metre surface (Hallo Alucobond!). While some homeowners will proceed to design with Alucobond cladding as their feature cladding of choice, most will choose a paint finish on rendered lightweight cladding and save thousands in doing so.
The same goes for tiles in the main living area, hardwood timber staircase, etcetera (some builders offer that last one as a free upgrade if you sign before you leave their office!).
Time & Inflation
Even with the simplest of custom homes, it takes at least one year from the time our clients make contact with us, to the time the keys to their new home are handed over.
During this year the cost to build will soar (sometimes more than inflation). This is often missed by news outlets that are quick to point out the increase in the selling prices of finished homes while saying little to nothing about the cost of building those homes.
So, if the cost of our past projects is not the best way to budget for your future home, what is?
What determines the building cost
The cost to build a home–custom or project, past or future, prayed on to the gods of lowest price or not–is a consequence of 4 main elements.
And unless you are building the same dead-beat shoebox project home on the same block of land, the cost to build your custom home will vary depending on these elements:
The size and complexity of your design
As a general rule of thumb, a bigger house will cost more in total, but less per square metre than a smaller one. Also, adding a bathroom will cost more than adding a study (think plumbing, tiling, etc.).
The same price variance presents itself once you break straight external walls into cosy courtyards and bin storage locations. As cute as they may look, those structural returns, add to the cost considerably.
The nature of your land and the quality of its soil
Once you have purchased your block of land you have, in effect, agreed to spend a somewhat predictable amount of money in footing and external works.
A flat block of land with non-reactive soil, while it may cost more to purchase (depending on the suburb of course), will allow you to utilise more of your budget on the house part that’s seen, used and enjoyed (the house above ground and its finishes).
The fitting and fixtures you choose
While you can easily budget on upgrading a kitchen sink or mixer, it does get more complicated when you go from cornices to square set, and from square set to bulkheads with LED feature lighting and pelmet returns.
At HBC Homes we start with our Essential Selections of high quality and reasonably priced inclusions, and from there give the home owner the freedom to upgrade the finishes they value the most.
The builder’s gross profit
Before there was a virus, there were 10 SA home builders that went out of business in 2019. The legend goes that they all thought a $XY,000.00 of profit on a lousy square metre rate estimated project would afford them the latest pickup trucks, insta-worthy vacations, and of course the company overheads!
A home owner who thinks it is a good thing their builder is working on the cheap, must have a plan on how they will progress if that builder shuts the doors and leaves their home in sticks.
At HBC Homes we charge consistent and fair profit margins (no matter the level of building experience our client has) aimed at sustainability and long-term success.
The solution in our design and build process
Given that we do not have a brochure with designs and prices to choose from (no custom home builder should have), and given that our past projects cost can skew your budget planning due to their specific location, custom inclusions and time frame (designed and quoted many months prior to completion), how do you go about building your family home without blowing your family’s budget?
Here at HBC Homes we solve that challenge through our design and build process.
It all starts with understanding all there is about your dream home–i.e. size, looks, location, inclusions, timeframe, etc.–as a function of what you want to spend in achieving it.
After so many custom homes built, once we clarify the above, we will honestly tell you whether your goal is reasonable or based on widely spread misinformation used to “sign people up and fix them after”.
An inflexible budget doesn’t mean that you cannot build your home. It simply means that you have to design and build smartly, prioritise quality and maybe, forego some nice-to-haves to avoid jeopardising your finances by having to pay for variations you never saw coming.
And that is why when someone contacts us to find out how much, we do not have an answer until we have found out exactly what is being built.
P.S. If you are thinking about building your dream home, we would love to help. Feel free to send us an email to info@hbchomes.com.au or fill out our contact form and we will get in touch as soon as possible.
P.P.S. If you enjoyed reading this article, consider subscribing to our newsletter where all of our original content is initially shared.
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