Brokers in business.
Whenever there are convoluted contracts or complex processes for people to go through and get an outcome there generally is a broker involved to ensure everything flows smoothly,
A professional broker can add tremendous value to your experience. They generally are fully independent of the affiliated business and review your individual situation to provide recommendations that are personalised to you.
In Australia, currently 60% of all home loans are originated by a mortgage broker.
Other types of Brokers
- Insurance Broker
- Stock Broker
- Real estate Broker
- Art Broker
- Cargo Broker
- Pawn Broker
- Information Broker
- Finance Broker
- Commodity Broker
- Building Broker
All the above are services available to help people deal with companies on behalf of their client.
What is a builder broker?
A building broker is an advisor who helps ensure you are avoiding any pitfalls with building as well as ensuring you get the best builder solution for your home.
A builder broker will ensure they understand your home requirements, which include design and budget. They will then tender these requirements out to a carefully selected panel of builders to find the right solution for you.
Once a solution is in place a good broker will ensure they guild you through every step of the process until you home is complete.
Why do I need a builder broker?
The traditional process most people follow when they decide to build is:
- Go through display homes for inspiration
- Talk to their bank or mortgage broker to understand how much they can spend
- Go back through display homes to ask questions about what is plausible
- They then decide on a home that looks good and sign up with a builder
The problems start arising once someone has paid a deposit; at this stage most people realise that the display home they saw and the contract they have signed (and committed financially too) are two completely different homes. Builders will generally spec the display homes which is what people fall in love with, however the contracts that are signed don’t include many of the additional features in the property. This can result in blowing out the budget and unnecessary headaches for people.
The two main problems with the above decision-making process when choosing are builder is:
- Most people will decide on a builder based on his display homes. Typically, there are 4-8 builders in any given display home which is the limit to your comparison.
- They are deciding on a builder based on a home that could potentially be outside of their budget.
With a builder broker there is a panel of over 20 builders that have been carefully selected based on individual strengths of the builders. Once your builder broker understands your brief, they can help find a builder that is suited to your individual needs. They will also assist with identifying things that you might have missed and work with the builder to ensure they deliver on all of your expectations.
Top 6 tips when choosing the best building broker?
Ask why you should use a broker instead of going directly to a Builder?
It is always important to understand what level of service your broker will provide through your journey. Much like a mortgage broker, we believe builder broker’s primary roles is to increase competition in the building industry and help mitigate the pitfalls of building. Using a broker may give you advantages, such as getting access to plans that might not be marketed, understanding the building processes and helping you ensure you haven’t missed anything important. But most importantly, it will allow you to save time by speaking to 1 person rather then dozens of builders who are going to want a deposit before sharing giving you all the details.
What does the research process look like for your builders?
Ask your building broker how they decide on the builders that suits your needs. It is important to understand their process and how they operate.
When it comes to your home most people want the right balance of price and quality. So, if your broker is telling you they will get you the cheapest house then you must consider how this will impact on the quality of your home.
Who are the builders on their panel?
Most brokers will have 15-30 builders on their panel, now if you don’t see the big-name builders this isn’t a problem, but you want to understand that there is diversity in what the builders are going to deliver.
Will the brokerage service have a fee? How does the broker get paid?
Ask your broker about how they get paid, there are brokers in the market that will charge a fee for service, very similar to a property buyer’s agent. They will also get a commission from the builder you decide to build with. This could be double dipping.
With Buildi it’s a true fee free service, we are only paid a commission from the builder which is equal to or lower than their cost for marketing/sales. This means you pay no more going through a broker vs going directly to a builder.
Check to confirm if they have a licence to operate?
Most Builder Brokers in the market have no licence to operate. This could potentially put your interests at risk. As a minimum your builder broker should have a real estate licence to operate.
At Buildi we have a Full Agency licence along with individual licence for our Brokers.
Are they able to help with due diligence on land?
Builder brokers will generally only assist once you have sourced your block of land. This could potentially be a problem, the type of land you purchase can impact your budget and design.
As an example, a block that’s on a slope will need to be built as split level or on stilts these will both attract additional cost.