Shea CullenNSW Registered Architect 9748 · Updated 10 July 2026Choosing your builder is the single decision that most determines whether your project goes well. A good set of drawings can carry an average builder, and no builder can protect you from a contract that leaves you exposed. After years of watching projects from the inside, I see the same avoidable mistakes again and again, and almost all of them are made before a single brick is laid.
This is the checklist I use, and what to look for at each step. None of it is hard. It just takes asking the right questions before you sign, when you still have all the leverage. If you are earlier in the process, my guide to everything that happens before you build on the Central Coast puts this step in context.
There is also a good website that lists builders in order of their Google reviews, with other useful information such as how long they have been in business and how many projects they take on each year. Use it alongside the checklist below:
1. Builder's margin
A builder's margin is added on top of anything not fixed in the tender package. Take tiles, where a rate has been allowed, say $50 per m². If you later choose a tile at $55 per m², you pay that rate plus the builder's margin. At a 20% margin that is $66 per m². Margins generally run between 15% and 25%, so it is worth asking what the margin is and favouring a builder whose margin is not at the top of that range.
The lesson follows from the maths: specify as much as you possibly can before the project goes out to tender. Every discovery or change made on site costs you the price of the work plus the margin. Want to move a wall or add a window after the contract is signed? You pay for the work and the margin on top. The more your drawings and specification pin down up front, the less of your budget the margin quietly absorbs.
2. Fixed price versus cost plus
There are two ways a residential contract is usually priced, and the difference matters more than almost anything else on this list.
A fixed price (lump sum) contract commits the builder to a price for the work as documented. The builder carries the risk of their own estimate, so they build in some contingency, but you know your number. For most homes and renovations this is what you want.
A cost plus contract means you pay the actual cost of labour and materials plus the builder's margin, with no fixed total. The risk sits entirely with you, and the final figure is not knowable when you sign. Cost plus only makes sense for genuinely unpredictable work, such as a complex heritage renovation full of unknowns, and only with a builder you completely trust and a transparent accounting of every cost. If a builder pushes cost plus for a straightforward new build, treat it as a warning.
3. Progress payments and retention
Payments should track work that is actually finished, never run ahead of it. A healthy schedule releases money in stages as each one completes: deposit, base or slab, frame, lock up, fixing, then completion. In NSW the deposit on residential building work is capped at 10% of the contract price, so be wary of anyone asking for more.
The danger is a schedule loaded toward the front, where you have paid for far more than has been built. If the builder runs into trouble, you are the one left short. Keep the money roughly level with the work on the ground, and hold a small retention amount back until any defects from the final inspection have been fixed. Your last payment is your only real leverage to get the snag list done, so do not give it up until the work is right.
4. Contract type and red flags
Use a recognised standard contract: HIA, Master Builders (MBA), ABIC, or the NSW Fair Trading plain language contract. Read it in full before signing, and pay particular attention to two things that quietly carry cost risk:
- Provisional sums (PS) are allowances for work not yet fully priced. If the real cost comes in higher, you pay the difference plus margin.
- Prime cost (PC) items are allowances for products not yet chosen, such as taps or appliances. Allowances that sound generous but are set too low push the overage onto you later.
Ask for these allowances to be realistic, and specify the actual products wherever you can so the allowance disappears. Be cautious of any clause that lets the builder change the price at their discretion, removes or guts liquidated damages, or makes your payments due on dates rather than on completed stages. If a clause does not sit right, get it changed before you sign, not after.
5. Excavation rates
This is another area where the budget can blow out, because it is often left out of the initial tender. As a guide, the rate should sit between $30 and $50 per m³ for soil, and between $40 and $150 per m³ for rock.
6. Licence and insurance
Ask for the builder's contractor licence number and check it with the Fair Trading licence checker. Also check for previous disputes.
A builder should carry several insurances. Before you engage one, ask for a copy of each:
- Home Building Compensation cover (required for residential work over $20,000)
- Contract works insurance
- Professional indemnity insurance
- Public liability insurance
- Workers compensation insurance
Here is the full list from Fair Trading NSW.
7. Project timeline
Ask what the timeline is, and whether the builder has to compensate you if they run over it. This matters if a delay costs you money, such as paying rent while you wait. Make sure any compensation actually covers what a delay will cost you, which brings us to the next point.
8. Liquidated damages
Liquidated damages are an amount the builder pays you for every day or week the build runs past the agreed completion date. It should be a real figure tied to what a delay actually costs you: extra rent, the cost of moving rentals, and a little more for the inconvenience. If you are a business, base it on your expected earnings.
Some project home builders offer laughable amounts, ten dollars a week or similar. Do not sign a contract unless it carries genuine liquidated damages for every day or month past the builder's own estimated completion date. Without them, you are simply at the bottom of their list of priorities. Remember to allow for rain days too, so do not plan to move in until a couple of months after the stated completion date, just in case.
9. Allocated rain days
Make sure the timeline includes a fair allowance for rain days. Ask what the builder counts as a day rained off, find out how many wet days typically fall in that part of the year, and check the allowance covers them. The Coast gets enough wet weather that a thin allowance will be used up early in the build.
10. Talk to a previous client
Ask the builder to put you in touch with a past client, and go and visit the project. A builder who can do this is showing you both that the work is good and that the relationship held together. Ask for a list of projects you can drive around and look at.
11. Trust your instinct
If at any stage a builder misleads you, shades the truth, or simply leaves you with an uneasy feeling, walk away. You are about to spend a great deal of money and hand someone a year of your life. You need a builder you can trust, and the warning signs almost always show up before the contract is signed. Pay attention to them.
What an architect catches
I am not a builder, and on every project I work alongside good ones. My job is to protect your interests in the places this list points to. Tight, well resolved drawings and a thorough specification are the single best defence against margin creep and variations, because they leave far less open to be priced after the fact. I can help you compare tenders properly, read what a contract actually commits you to, and administer the build so that progress payments line up with real progress and defects get fixed before the final payment goes out. And when a builder waves a defect away with "it's within tolerance", it helps to know what within tolerance actually means and where the numbers are written down.
One honest word on the other end of it. If a build goes wrong, the legal road to recover your money is long, expensive, and usually disappointing. Far better to spend the effort up front, on the right builder and a contract that protects you, than on lawyers afterwards.
Here is the checklist we use before engaging a builder:
Checklist for Hiring a Builder
A few Central Coast builders
Here are some genuine Central Coast builders we have worked with in the past. Do your own due diligence, as a lot can come down to which foreman is assigned to your job. Have a talk with them and see how you feel:
Smaller jobs:
Larger jobs:
North Construction and Building
There is also an article on becoming an owner builder here.
If you would like a hand choosing or comparing builders, or a second set of eyes on a contract before you sign, talk to us.
