How to choose a reliable builder

Many of those who have bought residential stands in the past two years are now ready to start creating their "dream" homes – but first they have to choose the right builder.

"This is the single most important step in the home-building process," says Jo Pelser, MD of leading residential developer Sable Homes. "A great design, a stunning view, and superb finishing materials cannot compensate for shaky foundations, a skew wall or a leaky roof."

And to guard against the possibility of such poor workmanship, Sable Homes suggests that property owners take the following steps:

* Ask how long the builder has been in business. Many builders have practical experience gained as subcontractors or site supervisors for other contractors, but managerial and business skills are just as important. Delivering a home on time and on budget also requires the builder to have a reliable network of material suppliers and subcontractors built up over a number of years.

* Check the builder's track record. Don't be shy to ask for references from recent clients – or to call them and ask them about their experiences both during construction and afterwards. Every new home requires some "fine tuning" and good builders attend to snags promptly and without argument.

* Check on the builder's finances. Get a list of suppliers and subcontractors and ask them if they are satisfied with the builder's payment performance and how long they have been working together. Check that the builder is correctly insured to cover both non-completion and injury on site.

* Be careful about show homes. It is not uncommon for spec builders to construct show homes that are bigger and better finished than those being offered off-plan. And in some cases, their advertised building price actually excludes the cost of finishes. Don't be embarrassed to ask exactly what is and isn't included in a quoted building rate.

* Get everything in writing. The building contract should specify all work to be done, construction start and end dates, and a fixed price. It should include a contingency plan in the event of delays due to weather conditions and stipulate what recourse the buyer has against builder defaults. It should also detail all basic materials and finishes to be used, and the make and model of any appliances that are to be installed.

* Stay involved during construction. Visit the site regularly and make sure the home is inspected properly at each stage of construction. Address problems as they occur. And don't allow the builder to make a "draw" on your building bond until you are satisfied that the work covered by that payment has been correctly completed.

* Don't sign off too quickly. The building contract should give you at least 60 days to notify the builder of any problems or defects you did not notice during construction and you should not waive this right when you accept the keys or take occupation.