Struggling to find a Building Contractor for Your Dream House?

In this article, you're going to know which type of contract will cost you more money, and which one will save you money, time, and headaches.

When planning to build your dream home, construction brings much headache to people. This could be because you or your friends or other people that you know have gone through bad experiences with construction projects. You may have ended up with a project without having the quality that you expected, or you may have incurred extra costs than you expected, and most importantly, you may have experienced a project being dragged on for years and it just pissed you off.

All of this happens because of taking the wrong approach to construction. But if you know what you do and hire the right people for your project, you can successfully construct your house without any hassle.

So, who would be the best type of contractor that is suitable to construct your home? It depends on where you are at and what your requirement is.

Selecting a contractor through tendering

if you go to an Architect, this would be the easiest and most suitable way to find a suitable contractor for building your house. If quality is a major concern for you, and you need the house to be built exactly as the architect designed it, this is the best method to find a contractor.

I'm going to explain to you why.

During the process, your Cost Consultant will prepare the contract document and the Architect will handle the tender process for you.

In this process, we are analyzing a number of contractors, not just one. We are not only looking at the price but also the technical aspects such as past projects, the recommendations they have received, their capacity to undertake the project, etc.

When analyzing the price, the best price does not always mean the lowest price.

A contractor can quote with unrealistically low prices for a certain project with the intention to win the bid. But this does not give them the ability to construct without issues. When the actual market prices of materials are high, how can they make a profit out of the construction project? Think about it. They somehow have to lower the cost to arrive at a profit. It could mean using low-quality materials and labor. Sometimes even not being able to perform and complete the project within the proposed price.

All of these problems will be identified by the Architect during the process of selecting a contractor and they will give you the best recommendation for selecting the contractor.

Then you can decide which contractor is best to build your house, based on your architect's recommendation.

Before signing a contract, it is very important to make sure you have everything included in the contract document.

The Cost Consultant and the Architect will help you do that.

Typically, the contract type is Measure and Pay. Even though we agree on the project price, the payments are done based on the actual work completed on site.

Because there could be minimal variations when things are actually built on site. So you end up paying only for the actual work done, not more or less.

Design and build contractor

Now if you're going for a design and build contractor, you wouldn't be needing an architect. Go to them if and only if you trust them.

There are both pros and cons. For this method.

Pros:

Typically a Design and Build project is done for a fixed price. This means that you agree on a fixed price at the beginning of the project. And this amount will not change under any circumstances. It's a big advantage for the Client.

This is a one-stop service. Means, you go there, and explain your requirements. They do the design, and they do the construction. All the professionals and laborers are working under them so you don't have to find them by yourself. So the process is also speedy and easy.

In this method, the contractor is the Team leader, not the Architect. Here the main focus of the team leader is reducing the cost and increasing profits in the whole process. So most of the time they use stock designs for projects. So they don't have to spend time designing a new house for each and every Client. You will have to select from a few pre-made designs, and get that built, regardless what your site conditions. Whether your site has wind from the west, and nice scenery in the east does not matter to them. They would just put that pre-designed sample house on the site.

They may have in-house Architects working under them. However, the overall process is designed to minimize cost and maximize profit by compromising on the Architectural aspects of a project.

Cautions:

If you decide to go to Design and Build contractor, make sure you get a fixed price for the contract. Because this is the biggest advantage in this method. If you are in a very tight budget this could be the solution for you.

Check all the terms and conditions before signing the contract. Especially those related to material price fluctuation conditions, inflation terms, cost variation, time extension and quality control conditions. If you think something needs to change or be added to the contract, let them know beforehand and get it modified.

If you don't trust the contractor much and still want to select Design and Build, there are some more things you can do to be more cautious:

1. You can appoint your own cost consultant to check the pricing of the BOQ.

2. When the construction begins, you will need to appoint your own architect for maintaining the quality.

3. If you plan on appointing additional consultants, this needs to be discussed with the contractor, before signing the contract.

Labor only

This is a verbal contract or a less complex contract based on the prices and rates quoted by the contractor. You can use a labor contract if the project is not complex and small scale. This process is easy so you can quickly start building. But you must have a proper set of drawings issued by your architect to construct your house.

Most people believe that they can save money by this method. But as an Architect, I'm telling you don't go there.

Since the contractor is not buying the material, they don't care if it is wasted, or used in the best possible way.

The quality needs to be checked on-site, daily since qualified professionals are not involved. You as the Client will have to get the hassle to supply materials for the project, and to get the work done on time. You have to keep track of suppliers, the orders, and go through all the headaches which is not worth your time.

The biggest risk is that the contractor might not perform well and can leave the work as there is no strong contract between the client and the contractor.

It will always overrun your estimated cost in the long run, then getting it built from a proper contract. You might also have to spend a longer time to complete the house. Since there is no proper method and conditions for the work, the laborers can do anything as they please. And you wouldn't have a contract to hold them liable. So, if something goes wrong, it will all be on you. Meaning you'll have to bear the responsibility and absorb any cost variations, material wastages, and time extensions.

If your project is complex, please don't select a labor only contract.

If maintaining the quality of your house is a major concern for you, always go to an architect and follow their recommendations for selecting the best suitable contractor for constructing your house.