The Building Companies
The great majority of so called Building Companies are not actually builders at all ... they are HOUSE RETAILERS or BUILDING BROKERS. They buy materials and labour at wholesale rates and sell them to the new home buyer at retail rates. The Building Companies profits depend on them establishing a profit margin between wholesaler and retailer and supplying a service to justify the margin.
Probably the greatest difference between retailers at your local shopping centre and Building Companies is that the new home builder also has, in many cases, direct access to the wholesale market for many of the goods and services involved in the building of a new home. Therefore if the new home builder takes on the role of "Owner/Builder" and can then purchase at wholesale prices there is potential for considerable dollar savings. That's the good news.
The bad news is that a new home builder buying direct from the wholesalers of materials and labour may well save a lot of money, BUT when times are good in the building industry it might be very difficult to directly source the best quality materials and resources. In fact some of the larger manufacturers, wholesalers and tradesmen such as bricklayers, tilers, concreters (granos), plasters, electricians and plumbers will only provide their materials and services to Building Companies. This may well result in people who choose to buy directly from suppliers of materials and labour obtaining an inferior quality and/or paying too much money.
The quality of the Building Companies house generally depends on the ability of that company to supervise the sub-contractors they hire. Some Building Companies maintain a high standard of supervision, some certainly do not. If the new home builder decides not to use the services of one of the Building Companies and take on the role of "Owner/Builder" they must take on the task of building supervision themselves.
This will of course mean that the "Owner/Builder" must have a sound working knowledge of the dealing and supervision that goes into building a house. They must also have the time available to carry out a task that may go on for some months. In reality very few people have the time and knowledge to become an "Owner/Builder" and prefer to contract the services of a Building Companies.
There is however a second alternative which involves a Building Company constructing a house to "lock up" stage and the new home builder then taking on the role of "Owner/Builder" for internal fitting. This can also result in considerable savings and does not require the high level of knowledge required during the construction phase.
FINALLY ... PHRASES TO TREAT WITH DEEP SUSPICION
"I have contacts in the Planning Department"
"There is no shortage of building materials"
"I have tradesmen waiting to start"
"The price will not change"
"Fast track"
"Trust me"
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