Is a building broker a middleman?
This is a question that has frequently come up recently, mainly from builders trying to convince clients they don’t need to go through a tender process or building broker as it will add cost.
This is what the builders would like you to believe, the reason for this, is if you don’t go through a tender process the builder generally wont need to compete with other builders.
An experienced building broker is not a middle man but a necessary part of the building process, the reason for this is as follows.
The tasks that a building broker undertakes are necessary in order to build your home or development, this includes the following.
- The design of your home has to be completed either by a builder or designer.
- The planning approval has to be completed by a designer or builder.
- Specification needs to be completed by the client prior to submission for pricing, builders generally avoid this as this is where a lot of potential cost can manifest, that why builders prefer to deal with this at prestart.
Whether by a broker or builder the above has to be completed and paid for.
There is no such thing as a free sketch, if you accept a free sketch it means that the builder will hold onto copyright thus locking you in.
Apart from the fact that you are able to get the best prices, when have your home tendered by an experienced building broker, you will also have the specification you expect so when you appoint a builder, you know you won’t get any surprises.
Going direct to the builder will not save you any money, and can potentially cost you more, unless you have the ability to seek multiple building prices, and you have a detailed specification that all builders can price from.
If you allow the builder to add their own spec this will not give you an apples for apples price, as one builder might do the right thing provide the spec that fits the home, but if a builder wants to win the job they may not allow for a realistic spec in order to achieve the most competitive price.
The spec is the easiest way to reduce the building price without changing the plan to much, so it looks like you’re getting the same size home for a lessor price.
Spec can easily add 20% to a builder price, that’s why builders want to be in control from the very beginning.
Next time you talk to a builder and they say to you why you are going through a building broker, ask the question so who will be doing the design, preparing plans for council, preparing for tender, and more importantly who is paying for all these services.