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Friday, August 10, 2007

Building Your Own Home: Dirty Little Secrets the Build-It-Yourself Industry Won't Tell You

The Build-It-Yourself industry is a growing sector of new home sales. Many people love the thought of saving thousands of dollars by not hiring a Builder. However, there are a few secrets the Build-It-Yourself industry are not telling potential DIY Builders.

As a Building Consultant and Inspector, I've set through several of these courses just to see what this sector is pushing on unsuspecting consumers.

Here are just a few things the Build-It-Yourself companies either don't tell you or are not completely open and honest about.

1. "You can get the same discounts from vendors just like Builders do." I'd say this is one of the biggest marketing ploys these companies use and it's not true, at least not as far as honest Builders are concerned. You see, Builders have a network of sub-contractors and vendors they use. These subcontractors and vendors give them huge discounts if they keep using their companies. These same vendors and sub-contractors are not going to give you the same discounts even though they tell the Build-It-Yourself company they will. And how will you know if you're really getting that discount? You won't! You're a one time shot where a Builder is repeat business for them.
2. "Builders gouge you on everything, our list of sub-contractors and vendors are the same one Builders use" Again, not entirely true. Many of the better Builders have certain sub-contractors and vendors they will only use. These are the sub contractors that charge more for their work and do not work for just anyone. Many of these type of subs will not work for you or me because they do not know us and because they charge twice as much as the sub on the BIY company list.
3. "We screen all sub-contractors and vendors on our list." Well, yeah, to an extent. You see, most of those sub-contractors and vendors have to pay to be on the "Preferred List" of the BIY companies. If you don't pay, you fail the "screening" process. I've been on several of these list and the only screening I'm aware of was my ability to pay their fees.
4. "You'll be in complete control of the building process" To some extent yes, but more than likely the answer is "only as much as the subs want you to be." What they don't tell you is that if you have a problem with a sub not showing up or doing less than ideal work, you've got to deal with it. A quality Builder has the pull to get things done where you don't. It all goes back to the Builder choosing quality subs and those subs wanting to keep the Builder happy to they'll continue to use their services.

Before jumping into the BIY game, make sure you know the real score. You may save a little bit of money or you may not. I meet with consumers every week that have tried to build their own homes and quickly were overwhelmed by the process or the sub contractors. It's not as easy as it looks and more than likely it will cost you more than what you originally budgeted for if not careful.

The Appointment of a Building Contractor in South Africa

Building a new home, renovating an existing house, or doing home improvements to properties, involves considerable planning and has large financial implications to all involved. It is therefore extremely important to appoint a contractor who has the necessary background, expertise and a good track record.

When looking for a contractor you may want to consider the following suggestions:

1. Do not accept the lowest tender just because of the price!

- Ask at least three (3) contractors to quote on the work you want done.
- Stipulate what detail you want specified in the tender and compare the tenders to ensure that the contractors have priced all items and then evaluate the tenders.
- Compare all prices against each other to evaluate why one tender is cheaper than the other.
- Request the contractor to specify in his tender, in detail, what materials are to be used and where, in order to avoid disputes later.
- Contractors may price some items provisionally in order for you to choose from other related products, or if they are unsure of the quantities.
- Make sure that tenders allow for the same provisional quantities and products.
- Carefully examine the tender, and award the tender based on specifications, not only on the price.

2. Read the contract

- Read the contract and make sure of your obligations before signing it.
- Be careful for biased wording in the contract.
- Do not sign any documentation until you formally award the tender to a specific contractor.
- The contract must be properly understood and signed by both parties.

3. Check the contractors references before awarding the tender

- Ask for references and follow them up by phone, or go and see the work that was previously carried out.
- Check whether the quality suits you and find out how the contractor treated his clients before signing, also ask them of the after sales service they received, if any was needed.

4. Do not pay deposits without security

- It is common for contractors to request large deposits up front.

5. Do not pay whenever the contractor request payment

- Payments should be scheduled in the contract and paid accordingly, on receipt of a invoice. Keep record of all payments.

6. Keep records and do not negotiate in good faith without documentation.

- A full written record of all decisions taken between yourself and the contractor should be kept. Dates and pricing (where applicable) should always be mentioned.
- It is normal for decisions to be taken during the contract to change original specifications.
- Before the contractor implements any changes, make sure he has given a price (additional cost or saving) for the change, and be sure that you keep records of all the additional costs, as these extras can mount up in value and influence your budget.

7. Do not accept poor workmanship

- If you are unhappy with any aspect or quality of any portion of the work, inform the contractor as soon as possible as certain aspects may be difficult or impossible to rectify later.
- Insist that mistakes are rectified before final payments are made.