Hiring a builder can be a complex, time-consuming process but the more you know about it the better. This article will help you answer key questions like:

• What do builders do
• What are the typical costs involved in hiring a builder?
• Do I need to sign a contract with my builder?
• What questions should I ask a local builder?
• What to look for when hiring a builder?
• Tips for working with a builder

Let's start by looking at what builders do. Yes, sure they help make renovations and new home building projects a reality - but there is more to their role than you think.

What do builders actually do?

Think a builder is the bloke up the scaffold with a trowel laying bricks? Very unlikely. In reality most builders are a combination of a project manager and supervisor - though some small builders will also work on the tools. A builder’s day-to-day tasks could include:

• Submitting plans to councils and following up on paperwork.
• Scheduling the building process.
• Managing the purchase and delivery of building materials.
• Organising and supervising his/her team of tradies.
• Scheduling and coordinating other trades such as electricians and plumbers.
• Working with architects and building inspectors.
• Problem solving issues as they arise on site.

What are the typical costs involved in hiring a builder?

As a guide to the ‘big picture’ breakdown of your total costs for hiring a builder, expect them to cost 30% - 40% of the total overall cost. Materials (50%) and council fees and permits (15%) will make up the balance.

Builders often use a per square metre (m2) figure to price a job as it is a good baseline to work from. Based on actual figures used by builders, the building cost per square metre (m2) can range from $1,300 per square metre to $3,900+ per square metre.

Wondering what factors will affect the price of your new home?

What factors will affect the price of my new home?

Factors that will impact the total cost of your building project, include:

• The individual builder and their pricing structure
• Type of construction, specifically timber frame ($), brick veneer ($$) or double skin brick ($$$)
• Choice of materials, finishes and accessories
• Site access and slope of the property
• Volume built project home or custom built

You also need to understand building contracts, and how builders structure their charges.

Do I need to sign a contract with my builder?

Generally, building projects over $5,000 require a formal home building contract, which is very detailed and follows a standard format. It typically includes the terms and conditions of the project, including the rights of both parties, the total amount you will pay the builder, and the start/finish dates of the job.

Once the contract is signed, you are committed to it, so be sure you know exactly what you are signing first. Read every contract you receive thoroughly before you sign it. If there are any grey areas or things you don't understand, don't hesitate to ask the builder for clarification and to revise the contract if necessary. You could also get legal advice if you are unsure of anything.

This could either be a fixed price construct or cost plus contract.

• Fixed price contracts are the most common type, where the builder agrees to carry out a defined scope of work for a fixed sum.
• Cost plus contracts are used when the builder does not know what the total costs of your project will be, though they will detail their hourly costs. Payments are made to the builder at defined times, when the builder submits all invoices and receipts of costs incurred.

Fixed price contracts can often be higher than cost plus contracts because the builder adds a "buffer" for some costs they can't fully anticipate ahead of time.

What questions should I ask a local builder?

When it comes time to hiring a builder you need to make sure they are right for your job. Key questions to ask them include:

• Are you appropriately qualified and registered or licensed?
• Do you hold valid insurance (professional indemnity and public liability insurance?
• Do you have experience in residential projects, like my job?
• Do you have references I can follow up
• Can you provide a written quote?
• How do you price your jobs?
• How long will my job take?
• What is your availability?
• What deals can I expect in the building process?

After you have plans and a firm idea of the material costs for your project, you can get quotes from local builders.

Builders licensing + what to look for when hiring a builder

Make sure your builder is licensed and insured. All states require builders to be licensed and insured to carry out work in your home.

Depending on where you live, builders will typically hold a particular class of licence. This specifies what scope of work they are allowed to carry out. The class may, for example, restrict the licence holder to only working on kitchen renovations. This will be detailed on the builder's physical licence, alongside their name, licence number and the expiry date. Hiring an unlicensed builder is against the law and could lead to a fine or worse. Checking a licence can easily be done online - all you need is the builders full name and/or business name.

Builders should also carry valid insurance, including professional indemnity, public liability insurance builders warranty insurance.

Tips for working with a builder

Your relationship with your builder is really important. It could make or break your reno or build. With this in mind, make sure you:

• Check that they have the skills and experience for your job. If you are undertaking an attic conversion make sure they have worked on this type of project before.
• Have your plans ready before you start approaching builders. That way they can accurately quote your job without delay.
• Get a project manager - either the builder themselves, your architect or a dedicated project manager. It will save you time and money.
• Have clear expectations, especially the timetable of works and deadlines - which should all be detailed in the contract.
• Budget a 10% - 15% buffer to cover unexpected expenditures that occur during works.