Volume builder vs Custom Builder for a new home builder: which one is better?

More affordable? Easier to work with?

You may be surprised. Learn how Michael resolved this for himself as he made his builder choice for his new home build.

Listen to the episode now.

Hello! This is Episode 324, and in it, I’m continuing my conversation with Michael about their new home project in Western Australia. This is a home that Michael and his partner are building to retire to, in a beautiful location on an acreage site.

If you haven’t listened to the first part of my conversation with Michael, you can find Part 1 in Episode 323. Listen now or grab the full transcript. It’s a great introduction to Michael’s project, including the design process for their new home.

In this episode, Michael goes into more detail about how he weighed up volume builders and custom builders, so he could review the best solution for constructing their new home and make an informed choice.

LISTEN TO THE EPISODE NOW.

And in investigating different types of builders, he also did a really good job of drilling into the detail of his project so he could compare apples with apples when reviewing their costing information as well. 

He shares more about all of that with us in this episode. If you’ve been assuming a volume builder will be a cheaper way to build, or trying to weigh up volume builder vs custom builder, you’ll definitely want to hear about how that research has gone for Michael.

Before we jump in, here’s a reminder regarding the timing of Michael’s project and my conversation with him.

So, Michael joined HOME Method in April 2021. We recorded this conversation in March 2024. Site works began on Michael’s project in January 2024, and it’s due for completion in 2025. 

We kick off the episode with me asking Michael to dive into the detail of how he investigated the various builders he was comparing, and understood costing for his project.

Let’s jump into my conversation with Michael now.

This is the transcript of my conversation with Michael discussing how he compared volume builders to custom builders and sought sufficient information to make a confident choice for his new home build.

Amelia Lee
I’d love to dig into that a bit more, because that was something that was really interesting to watch was, whilst you didn’t do the PAC Process, you still sought a lot of costing information from local resources along the way to ensure that the design decisions that you were making and the selections that you were making, we’re going to work from a budget and a performance point of view, and you balancing that. And then also, always testing and understanding what was going to be available locally or not going to cause you problems in terms of its supply. And that conversation that you are having from a balanced point of view of speaking to the custom builders, speaking to the volume builders, trying to get to a place where you could compare apples with apples, which can be really difficult in that process. And then also getting the quantity surveying information as well. Can you talk us through that whole comparing the volume builder to the custom builder? What you learned through that process? How you navigated those conversations? How you felt like you were providing them with information that was going to get you real feedback, how did you go about that to then make the call that you needed to for your project of who was going to build it?

Michael
So the quantity surveyor is a local Quantity Surveyor. And he was recommended to us by the custom builder who we ended up using. And actually, he’d just done a renovation with that builder. So he understood exactly the price points that he worked at, the quality that he worked at. So that was already built into the pricing. We also had, I remember, it was 23% added for escalation in prices. I think it was going to be a December 2023 start, it was all of these things were built in, and then you put margin on top, and then you put GST on top, when you add all these things in, it blows out. The actual square metre price didn’t seem that far off where we were thinking we would be with a house. But when you add all that on, and you add the workshop in. 

And I think initially when we started, I thought, “Wow, the workshop, if we go and get a kit shed for 20 grand and put a slab down and put it up, it’s $35,000 or something.” And I remember the builder talking about moisture and different things, and he said, “You’re probably better off building a timber one, I can build you a timber one for 60 grand.” And then I think that basically doubled in 12 months, that costing. So we had all those conversations. 

The interesting thing was with the quoting, we then got the quotes from the two volume builders. That earthworks and different things, there wasn’t a lot of difference. And there wasn’t a massive difference in the workshop. Most of the difference, I think, came is the way they assessed the house. And that’s where it’s trying to dribble down. Now where’s a lot of that difference, because you looked at the glazing and the glazing wasn’t very different, because all of those things, they’re putting, like for like. And it’s all those other areas, like just build quality, time on site, finishes, and that sort of thing, where that’s the really hard bit to measure. But at the point, it was a significant amount of money difference. And so I remember going and meeting the custom builder who we’re building with, and just after we have that quantity surveying and we talked about budget, and he said, “Well, are you the right builder for me? … Am I the right builder for you, effectively, because it’s going to be what it’s going to be because that’s the way I build and I’ll build the quality.” 

And yeah, it’s really interesting, because with the volume builders, they use a lot of contractors and you have no control, and that was the thing having that conversation with the volume builders is about we want to have the right wall wraps and we want classical breathable membrane. I’m keen to build to NCC 2022 standards, and took me quite a while to get my head around roof structure and how to manage that. But we got that building to our specifications in design through selections and that sort of thing. But yeah, it was just an evolving process. 

And it was interesting to see, I think the last quote I had with the volume builder, the gap had narrowed considerably. I think it was a couple 100 grand more, and as we drill down on selections and that sort of thing, you could see they were bringing their price up and initially, they were going to do a fixed price. And as we moved down, we’ll only do a cost plus towards the end, and then we just parted ways probably September last year, I guess. It was basically they can’t meet your timelines. And I think some of that was their thinking, “This is going to be too hard for us to meet their requirements.” I think that’s where it came from. So I don’t know whether I’ve asked your question. But yeah, that’s part of that process, it was an interesting process. 

When we got the quotes, I made it quite clear that this is our design, and we want you to quote on our design. And I made it quite clear that we want to protect that design, we don’t want the volume builders to actually plagiarise the design or take it on. So that was our design. Because as soon as they come in, and they start making some changes, then it becomes their design, and then they pull you in. So I’ve made it quite clear that this is the design, this is what we want built. One of the volume builders certainly tried to push us down that path, and we kept pushing back, and then we just made that decision that it’s going to be a lot harder, because they were going to try to pull us their way more than the other was saying, “Well, we’re happy to build what you’ve got. It’s great design, we’ll do that.” So yeah, that was an interesting split between the two volume builders,

Amelia Lee
I think it was really interesting to watch how you navigated it. And the fact that you were insistent on, “Look, this is the specification that we want”, and trying to get the volume builder to come to that, and so that you could compare a like for like pricing, and then making the call to go with the custom builder that you did from a quality point of view, and navigating that from what that was going to mean for your budget. But yeah, like I said earlier, you did such a good job of really digging into the detail of it. You didn’t just do it as a cursory thing and just get them to price it and then walk away, you really did try and understand exactly what it was going to mean from a cost point of view. So it was really great. And I mean, Western Australia volume building is quite different to volume building in other parts of Australia. Insofar as the volume builders build a lot more homes in Western Australia, I think that’s compared to other states where it’s 20 to 25% of new homes are built by volume builders, in Western Australia, I think it’s around 40%. So they obviously have a big place in the market over there. And so I can imagine you would have been an interesting potential client for them in terms of the way you were educating yourself about the detailing that you wanted, and the specification that you wanted, and then feeding that back into their casting process would have been quite interesting. 

Did they have an appetite to learn how to build better? Or were they struggling? Obviously, they made a call at the end that they couldn’t do it as a fixed price. But along the way, did you see that they were cottoning on to the fact that this might actually be the future of building? Or did they not seem to be taking it on in that way?

Michael
I think there was an appetite to but limitations is what will our contractors deliver us if we ask this? They won’t want to deliver it. So they don’t ask it. I think there’s a bit around that. And it’s their systems. Yes, I think there’s a bit around that. We sort of developed it because I said it’s really important, we want to have input through the build. And they were sort of engaging about that. And the owner of the business had brought on a partner, and he managed most of the commercial, and certainly with the after COVID madness, then things went quiet. So they were transitioning into doing a lot more custom builds. So it was where there’s still potential for them to stay busy. So they were doing a number of custom designs, and, I think, building that process of working to different standards. 

But I remember, we did one other builder who he is a German guy. We went through his house early on when we were selecting builders. I think he builds two or three houses a year, probably a couple. And he’s very particular about his building methods. And I remember him saying, and I’ve learned so much since then, this is my wall system and this is non negotiable. And I now understand what was in that wall that I didn’t understand then, but he had a solar passive design, he had timers to allow to ventilate if he was at work and all sorts of stuff. But I remember just I bumped into him at one of the hardware places and I just said, “Look, we’re at this point where we’re talking to builders about wall wraps and stuff like that, and I just had a conversation about the builder that we were building with.” And he said, “Well, I’m not sure that they’ll actually do that for you.” 

And it turned out that the appetite to do that was limited, but they were very open to the partner actually taking us on and having an active role. And we went on site with him, we talked about he had a massive build going on there, the underside of the house, where there’s a lot of structure, just about what you’d have in a car park in a super market. That was interesting. And I think at the end, he could only spread himself so thinly to have that on site connection between the customer and the builder. So, yeah, I think it was just that process of they have to push things along. And that’s about where that got to, I guess.

Amelia Lee
Can I ask you this, this might be a strange question. But you’ve talked and peppered through this conversation about, you learnt this and then had a conversation about this, you learnt this and you’ve had a conversation about this. You have managed to maintain across quite a long, long duration, you joined HOME Method in October 2021, you bought this block of land early 2021. You spent some time in the design phase, you spent some time navigating, getting it costed and making decisions through that costing process about the selections that you’re making, and along the way, I’ve watched you upskill yourself, upskill yourself, upskill yourself, dig into detail, dig into detail, how have you maintained your own motivation and energy around that and seeking out that learning on an ongoing basis from, I suppose, from a motivation and an energy point of view, from a mindset point of view? Yeah, what have you done personally? Is that just how you’re geared normally? Obviously, you’re a busy man with a property and those kinds of things, how have you balanced that for yourself?

Michael
Yeah, look, that’s where podcasts are great, because you can be working and listening. And I just love absorbing information and just got engaged in the process and just wanted to do it well, and to understand what we’re actually doing. And probably, without joining Undercover Architect, I definitely wouldn’t have been able to dig as deeply into it. And certainly, I’ve reached out to a number of your podcast members that have done the podcast with you in different areas, and yeah, I just wanted to understand why and the process. And didn’t want to bid on a home that didn’t perform. I wanted longevity in the home. 

I think building has a massive carbon footprint, and massive amount of energy. And there’s a massive amount of waste. And I know one thing at the start was, we want to use as many natural materials, but buildings are very much a system thing and a process thing, and it’s what’s available and what people are used to. I remember going to the German builder, I remember going to his glazier in Denmark and just talking to him. And the wife said, “Well, that’s a plastic handle on your window, there’s not much we can do about it. It’s just some things are what they are.” But I’ve wanted to use as much natural material. So timber and just getting to the basics. I mean, not ready yet to jump into the Low Carbon concrete or anything. I just thought we’re too late in our design stage for that sort of thing. It was interesting, I didn’t think Holcim, who you’ve done podcasts with, I didn’t even realise they were actually in Albany. So we could have actually gone down that path, but a lot of this stuff has just stayed with the builders. I tried to work with the builder, his process and who he deals with. And then quietly, I suppose, just bringing some ideas. Probably digressed a bit off where the question was, but…

Amelia Lee
That’s excellent. And that’s the thing I think, you’ve probably heard me inside HOME Method saying, “Don’t over own your responsibility in this, don’t take on the risk of trying to tell the builder things that mean if there’s any issues with it, the builder can deflect fault to you as the homeowner. Remember that you’re working with professionals who need to take responsibility for the role that they’re playing and the advice that they’re giving. And at the same time, you, as an informed, empowered, educated homeowner can definitely be providing input and driving particular outcomes.” And I think you’ve always created a really good balance of that with the teams that you’ve worked with and the team members that you’ve worked with and how you’ve gone about thinking about details. You’ve never been frightened to pick up the phone to somebody and check an opinion or reach out for some advice on those specific things along the way, as well. And then you’ve come back into the group and shared your learnings from that point of view. And you’ve been sending me emails about wall insulation, and looking at that as well, and being hungry for that to be an option in Australia. And yeah, it’s been really great to see how you’ve navigated it over the whole project. It’s been a really fantastic experience for me to see you as a homeowner, the way that you’ve navigated this.

Michael
Yeah, I mean, the wool one, we’ve got wool insulation in our home on the farm. I’m a wool grower, I’m passionate about the fibre. It’s an amazing fibre. So at the start, that’s what I wanted in our walls and our roof. And then it was available in Albany, that’s locally. And the more I explored and reached out to people that were supplying it, suddenly, it’s not even available in Australia. And then I got it quoted from New Zealand. And it was $46,000, I think, the quote to insulate our home. And so that’s where you stepped away from one of the volume products, freight and different things. Just staying with the process is where a lot of the dollars get burnt up. So we’ve ended up going with it in the walls.  

I think we might actually end up with Rockwool, I’ve connected really well with Andrew Wisbey, who’s got Hybrid Green in Perth, and he did a podcast on the Yak podcast.

Amelia Lee
The Sustainable Builders Yak?

Michael
Yeah. And he was actually a wool classer. It’s interesting having those conversations and just learning why some products are better in some areas than others. But we’ve always wanted a healthy home, low VOCs, so it’s one of those. I could expand on that a long way, but that’s probably another story to hear. But it’s all those products that at the end of the day, we’ve got a budget, and we’re way beyond where we need to be, but we can work within that. But yeah, there’s a limitation. So I’d love to try some other products sometimes. 

Just staying with fibre cement, different things as cladding, and stay with what the builder works with. And that’s always an interesting conversation I had with the builder. I did ask him, “How do you deal with asking questions without insulting the builder?” Because you’re maybe asking a question that he can’t answer. And then somebody just researched the James Hardie products and their installation requirements. And so I just got my facts. And then there’s two options, you can put a class four vapour permeable membrane, you can either direct fix to the wall, or you can have an air barrier. 

And so I just tried to very carefully ask that question. And I remember we went and met with him that morning, and he’s a bit of a grumpy fella. But by lunchtime, he said, “Well, we can do it.” But it is that how do you bring some of these things into the conversation, because they’re trying to get to an end result, and they’ve had processes that they’ve worked with for so many years that work. And they don’t want to actually move too far away from it, because they’re responsible for your building, the quality, and if there’s a problem. So they’ve got to make those decisions, but you can still have the conversation about how to bring this in. And I just said, “Look, I just want the walls built to NCC 2022 standards in a climate zone six, that is a plus four vapour permeable membrane. Because I don’t want to have mould issues in the walls. Because we’re not going to have a really tight home, but we’re going to have a comfortable home. So they’re just conversations that we’ve had along the way.

Amelia Lee
Yeah, it’s absolutely fantastic. Can I ask you, because you and your partner have navigated this project slightly differently, you’ve had different roles in it. How have you found that as a couple working through this project, and where you’ve seen your strengths and your approaches to things, inform the way that you’ve worked together on creating this home?

Michael
I think, luckily, we’ve both been pretty similar, I suppose, expectations of what the home will bring us. So that’s been really good. I’ve got plenty of confidence in my wife’s colour selections and different things. So we have a couple of different agreements on where our fridge should be in the kitchen, because I know if it’s in an area where we’re going to be on top of each other, then it’s better off somewhere where there’s easy access. It’s just a couple of little things like that, but I’ve gone down this UA path and I think your blueprint is, you’ve got it, you’ve nailed it. And every build is different and navigating it. 

And I can see that there’s areas Gabrielle, I think, probably September last year, brought in a interior designer and she identified a few things and they are for full pan. And we just spun a few things around. There might be enough depth in the study area, if you’re trying to get past, and so we just spun a few things around. But if that could have happened earlier, I’d have shortcut a few designs. So that would have saved a bit of cash on our cost with designer, but I think the most important thing is ending up with the design that you’re happy with at the end. 

And we’re very comfortable now after the pad’s gone down. And so we’re really comfortable with the layout and the way everything’s coming together, we’re not thinking, “Oh, we’ve messed up here.” It was an interesting, walked on site. And I thought, we’ve got 2400 door heights, and then we went in there and I looked and I got the tape measure out, and they’re 2100. And we just sent an email to the builder on Monday morning. We waited till Monday morning, and then nothing, and then phone call on, that was an email back on Tuesday just saying the boys are written Bairstow, they’ll rectify it in their own time. They just got into the flow of building and just did the normal process. And they didn’t go back and read the plans, but there’s no issues, so that’s off track. But the more you can bring forward, you talk about your selections and bringing them forward, I said to Gabrielle, “We really need to work out if we did go with the volume builder, then we need to know what we’re putting in there. Because we need to have price points for all of those because we need to get that built in.” But that’s been interesting to watch, because you really don’t know what you want to select until you get to the end anyway. Because it can change. The new products are selling, deleted, and all these sorts of things. But the basics of everything have stayed very similar. So I think it’s just knowing your price points and everyone gets carried away, they see something and then they want it. “Wow, that’s 30% more than my budget.” I think we’re pretty well covered in all those areas.

Amelia Lee
Well, you are under construction at the moment, I’m looking forward to getting you back on for another chat about the construction phase because I know that you’ll have a lot of learnings to share from that. But before we wrap up, is there anything that you’d like to share in terms of, I suppose, tips or information for the listeners about that whole process that you’ve gone through to get up to where starting on site and thinking about creating the right home or even, I suppose, what you’re most excited about in being in this finished home. I can’t wait for you to be in this finished home. I think the design is really fantastic. And I think you’ve done such a great job of navigating the process so far. So yeah, did you have anything to share before we finish up?

Michael
I suppose just going right back to start of design. I mean, we’re happy with our design, I think he’s given us a fantastic outcome. Probably in that early stages, maybe we would have said, “No, give us two designs.” We might have had a different design with a pavilion style, we’ve got a larger wall area and costs go up and that sort of thing. It would have been good to maybe just explore a different design and just seeing where that went. We’re certainly happy with our design. But I think, yeah, just keep an open mind early on. Because I know actually getting attached to a design, I remember when we got to the point of getting to financing and we took our design, talking to our consultant, talking about getting financed, she said, “Why does that cost so much? I can’t understand it. I built a home seven years ago with a volume builder, and it’s got all this glazing and stuff and it was you know, $400,000 but why is it significantly more than that? And I think you just got to look at the value of your block. We’ve gone through all of that and worked out yes, we can still justify the build. It is our forever home. So that’s really been important, and that’s probably one of the things that I’ve wanted to put a lot of energies into it because it’s the only chance I’ll get to do it. 

And then you’re just bringing on board, I think just seek out the right people that you can relate to and will give you the results that you want. I think we’re extremely lucky that, I think Albany’s 40,000 people and it’s got a greater population of another 20,000 around it. So I think we knew a lot of people that knew a lot of these professionals so we were able to get an insight into what they were like, go through homes that they worked in, talk to people, it’s great to have that understanding. But if you don’t have that, I think you just got to seek out. Do you connect with those people? Are they going to give you what you need and what you want out of your build? If not, just move on. As you say, look for the red flags. And if they’re there, just in time, I remember the builder saying with our design early on, I was thinking, “Okay, this is great, let’s keep moving.” And he said, “Sometimes it’s good just to stick a nail in the bottom drawer.” And it is, it’s amazing. Your thought processes are completely different over time. And if you rush the process, you probably make mistakes so that we don’t all have time and turn out that we’ve had time and it’s working out. So yeah, that’s about it.

Amelia Lee
How do you think HOME Method has helped you through this process? Because as a member, you’ve navigated it in a different way in terms of you being willing to ask these questions and make these phone calls and explore these different avenues and that kind of stuff. How have you found that HOME Method’s helped you through this process overall?

Michael
Look, you’ve got a very unique resource. So in every area, it’s helped. Yeah, I think there’s a lot of value in just that trust that what you’re hearing is actually what it is. There’s a lot of greenwashing and a lot of promotion and stuff, it’s seeing through all of that, it’s just looking at the facts and stuff like that. So I think there’s a lot of value in that. And your resources are just amazing. A lot of things we’ve just done through trust, and knowing and I remember, it took a long time to get finance. Because being a farmer, your income varies significantly. And we’d work with our bank that never ever done finance for a custom build. And the conversation went from June to December, pretty much, but we decided to go with our custom builder in October. We basically said to him, “I still didn’t have our finance, but we knew we’re going to get financed.” 

And we knew that if we didn’t get on and start to put all the ducks in a row, we wanted to try to get a pat down either before Christmas or immediately after Christmas and utilise that summer, the dry summer period for getting all of that work out of the way. In some places, you just got to have trust, but you’ve got to know the person and know their background. I remember him saying to us, “I’m going to retire in six or seven years,” he said, “The last thing I want to do is to be called up when I’m retired to say come and fix this.” So that means something to us. So it’s just finding that type. So whether that’s answered the question, but I think, yeah, the resources are amazing.

Amelia Lee
Thank you, Michael. I’ve always loved your questions for our HOME Method Q & As. You’ve always got really great questions that I know offer a lot of value to other members as well. So that collective learning journey is definitely one of the things. I mean, the community inside HOME Method is just fantastic. So you’ve always been a really great member. So I’m looking forward to getting you back on to chat about the construction process. Super excited about that. And it’s really great to be seeing your home coming to fruition. Thank you so much for your time and for sharing your information so generously. I know that this is going to be super helpful information for those who are thinking about building as well. So I can’t say thank you enough. I really appreciate you being here.

Michael
I appreciate the opportunity. And yeah, quite happy to participate. Hopefully there’s some value. Thanks Amelia.

Amelia Lee
Thanks.

There were loads of gems in that conversation, and I hope if anything, it’s helped you be less nervous about getting second opinions, speaking to people about the detail of your project, getting yourself informed, and getting the right team around you who are open to these kinds of discussions, and also support you wanting to know and understand the nuts and bolts of your project.

Now, Michael didn’t use the PAC Process, but was still super proactive in seeking costing information through the design phase. 

So, I also hope that you’ve seen how valuable it is to really dive into the detail of your project, your selections, your energy efficiency, and how that is all coming together in your future home, before you are resolving your final contract with your selected builder. 

It was great to hear Michael share just how much he pushed to ensure the costing information he was receiving was informed on actual selections, so he wasn’t making a choice about who to work with based on a bunch of assumptions. 

Assumptions in costing can cause a huge amount of disappointment when you discover those assumptions are not what you wanted to include or use in your home, but you’re committed to a contract, and subjected to budget blowouts. So much better to find out this information up front.

Of course, the PAC Process enables you to get this type of information during pre-construction, as you work with your selected designer or architect, and your chosen builder, in a collaborative team. 

But even if you’re not doing the PAC Process, there are still ways to ensure you can access that knowledge and data for your project before you build.

I hope from the conversation you’ve heard with Michael now, that you can see how beneficial it is to NOT wait until you’re tendering your project to find out what it will really cost to build or renovate. 

(And if you don’t know what the PAC Process is, it’s when you bring a builder on board your design team during pre-construction, and pay them as a consultant, to collaborate with your designer or architect, and provide input on cost and buildability). 

(Episodes 201 to 205 in the resources below will give you more information about how the PAC Process works, and we have a special training session inside HOME Method about it).

RESOURCES:

Episodes 201 to 205 about the PAC Process (or Paid As Consultant Process): Start here >>> https://undercoverarchitect.com/podcast-home-design-on-budget-pac-process/

3 Top Challenges When Building with a Volume Builder >>> https://undercoverarchitect.com/podcast-building-with-a-volume-builder-3-challenges

Tips for Building with a Volume Builder >>> https://undercoverarchitect.com/podcast-tips-building-with-volume-builder

Designing, Building and Renovating on an Acreage Block of Land >>> https://undercoverarchitect.com/podcast-acreage-block-of-land

Sid Thoo, that Michael references, is an architect and energy efficiency assessor, located in Western Australia. Sid and I created a specific training session inside HOME Method called “NatHERS: Under the Hood”. I also interviewed Sid on the podcast about dark roofs vs light roofs >>> https://undercoverarchitect.com/podcast-roof-colour-dark-vs-light-energy-efficiency-sid-thoo/

Access the support and guidance you need (like Michael did) to be confident and empowered when renovating and building your family home inside my flagship online program, HOME METHOD >>> https://undercoverarchitect.com/courses/the-home-method/

Learn more about how to interview and select the right builder with the Choose Your Builder mini-course >>> https://undercoverarchitect.com/courses/choose-your-builder 

Access my free online workshop “Your Project Plan” >>> https://undercoverarchitect.com/projectplan