How Does a Building Broker Benefit My Project?
Updated: May 21, 2020
Are you excited to start your home building project? Building your dream home from scratch is a milestone that you should be very proud of.
However, projects can be truly challenging and stressful for anyone with little knowledge of terminologies, pricing, building code rules, and insight into your builders track record.
Keep in mind, a home building project may require the help of professionals – if you’re feeling uncertain, can’t get the price you want, or simply don’t want to deal with builders, this article will help you understand if you should engage a building broker.
What is a building broker?
A building broker is often regarded as a specialised client advocate in the building and construction industry. This professional body is usually a team of experts working together to help customers with their building projects from start to finish.
The main role of a building broker is to provide a detailed walkthrough to anyone planning to build a house from the design, budgeting, and compliance to building requirements. When it comes to the construction stage, Building Brokers usually have a tender pool of 10-20 vetted builders who they get to compete for the project and win you the best deal.
What are some reasons NOT to use a building broker?
A building broker isn’t for everyone. If you’re simply looking to build a ‘project’ type home which volume builder such as – Metricon, Burbank or Simonds, pump out by the tens of thousands each year – then a building broker won’t be of much use to you.
Volume builders will not build off plans from an architect, draftsperson or create a new home design for you. You must choose from their options and specification.
Building brokers specialize in getting you the best deal for custom-designed homes or larger projects such as property developments.
Okay, so what are some BENEFITS of using a building broker?
1) Copyright and freedom from a single company.
If you’re at the very start of your journey and don’t have a design prepared by an architect or draftsperson, and you approach a builder - anything that they create for you is the builder's copyrighted property.
This means you cannot go and get other quotes on the plans from anyone else. This can be a recipe for disaster as it locks you into one company, or if you decide to change your mind, you have to start this process all over again with another building company.
Any design you get a Building Broker to create for you is shared in copyright. Meaning the client owns the drawings and is allowed to get quotes on the plans from as many builders as they need.
2) Industry rates and wholesale pricing.
The main specialisation of a building broker is to help clients get the best deal on their custom-designed project. Because of the volume of work building brokers bring to their builders, they get insider prices and rates.
This means a builder is typically charging 10-15% less to a building broker than they would to an ordinary client who approaches them. The best way to think about this is Wholesale vs. Retail.
On top of this, the building broker works for the client – not the builder. They scrutinize and bargain on the client's behalf to get them the best possible value for the build.
3) A building broker gets paid by the builder NOT the client.
Ultimately, the builder who the client decides to go with will pay the building broker for bringing them the project. It’s a commission model, the same as a sales consultant receives if you approached a building company directly.
Unlike a sales consultant, the Building Broker works for you and isn’t tied to an individual company.
What can happen to you WITHOUT a building broker?
· Soaring expenses that were not discussed during the initial cost planning
· Delays on the agreed timeline of completion
· Poor or sub-standards construction materials used which could have been prevented
· Builder going bust because of the lack of insight into their financial records.
· No idea of the builder’s quality, past client’s reviews, or capacity to do your project.
· Overpaying by 10-15% on the construction cost.
I hope this article has shared some insight into how a building broker can help with building a home or even a development project.
At Your Next Home, we help you save big, find the best value builder and even create designs and get them through the council.
If you need help with anything from planning to getting quotes – let’s chat!