Common Mistakes People Make When Choosing a Building Company

Building or renovating a home is one of the biggest investments most Kiwis will ever make. With over 40 years of qualified building experience across our team, we've worked on hundreds of projects nationwide and seen far too many go off the rails due to simple, avoidable mistakes when selecting a builder. Supply issues, labour shortages, and economic pressures continue to make the sector challenging, so choosing carefully is more important than ever. Here are the pitfalls we come across most often, and steps you can take to avoid them.

1. Going for the Lowest Quote Without Checking the Details

Price is always tempting, but the cheapest quote often hides problems. It might skip important items, use lower-grade materials, or come from a builder who's planning to recover costs later through extras and variations. In a competitive market, some quotes look attractive simply because they're incomplete or overly optimistic.What we always advise: Ensure you're comparing like-for-like. Request full breakdowns of inclusions and exclusions, and ask for explanations of any major differences. A higher upfront price from a reliable builder usually saves money overall, no nasty surprises down the track.

2. Not Checking Licenses, Insurance, and Track Record Properly

It's easy to assume someone advertising as a builder is fully legitimate, but that's not always true. Certain work requires Licensed Building Practitioners (LBPs), and all builders should carry solid public liability insurance. Without these, you're left exposed if issues arise - damaged property, non-compliant work, or rejected building consents.We recommend: Check the MBIE LBP register yourself to verify qualifications. Request current insurance certificates and proof of memberships, such as with Registered Master Builders. If they hesitate or can't provide these, it's best to walk away. This is basic due diligence.

Construction site inspection in progress

3. Skipping References and Site Visits

Too many people rely on a nice website or friendly conversation without digging deeper. A builder might talk a good game, but past clients will reveal the real picture - about communication, adherence to timelines, or how problems are handled.Our advice: Always request recent references and contact them directly. Ask specific questions: Were there delays? How were variations managed? If possible, visit a recent job site. Check online reviews as well, and look for any recurring complaints.

4. Not Understanding Provisional Sums (PS) and Prime Cost (PC) Sums

These are among the biggest budget killers we encounter. Provisional sums cover work or items that aren't fully detailed yet, like ground conditions or specific fittings- while PC sums are allowances for things like taps, appliances, or tiles (materials only). Builders sometimes lowball these to make the initial quote more appealing, then apply big overruns when actual costs emerge.From our experience: Push to finalise selections early to lock in fixed prices where possible. If a quote includes lots of PS or PC items, question why- the plans may lack detail. Demand clear breakdowns, realistic allowances, and ideally caps on overruns. A strong contract spells out exactly how these are managed.

5. Ignoring the Risk of Builder Bankruptcy or Financial Trouble

The industry has seen companies fold mid-project, especially with tight margins and economic fluctuations. If your builder goes under, you risk losing deposits, facing unfinished work, subcontractor claims, or stalled consents - it's expensive and stressful to resolve.How we help clients protect against this: Assess stability by asking about current workload and checking references for red flags. Builders linked to schemes like the Master Builders Halo Guarantee provide added security. Structure payments around milestones to avoid paying too far in advance.

6. Signing a Vague or One-Sided Contract

Verbal agreements or skimpy contracts invite disputes. Without clear terms on scope, timelines, payment stages, and variation processes, you're vulnerable.We always insist on: A detailed written contract. Review it thoroughly, and if anything seems off- like unfair cancellation clauses or hidden fees- get it checked. An independent review can catch problems before you commit.

7. Underestimating Delays and Variations

Weather, supply problems, and plan changes are common. Without buffers or controls, these lead to major cost and time blowouts.Build in: A realistic contingency- 10-15% on budget and time. Ensure the contract requires written approval for variations and sets fair pricing rules.Choosing the right builder takes effort, but getting it right pays off hugely. We've helped many homeowners and renovators spot these issues early through contract reviews, quote checks, and site monitoring.

If you're starting a project or concerned about your current one, reach out- we're happy to provide an impartial assessment so you can build with confidence.