Trusting a first time builder with your new home build can feel daunting.

How do you ensure your project won’t be a test dummy that crashes? The one that they get everything wrong on, because it’s their first?

Learn more as I talk with HOME Method member, Tatiana, about what to do if your project (and future home) will be your builder’s first project in their business.

Listen to the episode now.

Hello! This is Episode 351, and it’s Part 2 of my conversation with HOME Method member, Tatiana, about her new build in regional Queensland on a site with a specific Council Buffer Zone they’re having to contend with.

If you missed Part 1 of our conversation, make sure you head back to Episode 350 to catch up before you dive into Part 2. You can listen or read the transcript here.

In this episode, I talk more with Tatiana about how she’s setting up her pre-construction process with her preferred builder, especially given he hasn’t used the PAC Process before.

We also talk about how to manage your risk when working with a builder who is new to their business, and your project is their first as a business. There’s some important steps to take so you ensure your project doesn’t suffer from them getting their business up and running.

LISTEN TO THE EPISODE NOW.

We also talk through Tatiana’s design goals, and the budget checks she’s been doing as well. They’re working with a tight budget, and so you’ll hear how Tatiana is managing that, what she’s prioritising and considering to be cost efficient, especially based on what we discuss inside HOME Method.

Tatiana joined HOME Method in May, 2024. And the time of recording this conversation is in October 2024.

Tatiana is hoping they can be in their finished home towards the end of 2026, allowing roughly 2 years from the time of our conversation to complete their project from start to finish.

Something I want to mention before we jump in is this: you’ll hear Tatiana and I talk about her builder, and what’s involved in him demonstrating his ability to run a building business, using her project as his first. 

You’ll hear me talk about the builder’s license, and building up the ability to do work of a particular value. Instead of ‘license’, what I mean is ‘insurance’. Builders of course need the right kind of license to do your project, but a license is related to project type, not project value.

What governs the value of work they can do is a builder’s insurance … as builders need to have insurance to do your project, and their insurance policy will limit them to work of a particular value at any one time. 

If a builder wants to increase the value of the projects they’re working on, they have to increase their insurance limit, and it’s an onerous process for a builder to do. 

So any builder who is setting up a business, and wanting to do a project of a particular value, will have to navigate how they get insurance to the value of that project. You do NOT want to work with any builder who doesn’t have the correct insurance for your project.

Now, let’s dive in!

This is the transcript of my conversation with Tatiana about her new home build, choosing her builder, setting up the PAC Process and her design goals overall …

Amelia Lee
So, are you going to, in terms of working with this builder, are you going to sign a preliminary agreement,or are you going to handle this pre-construction process a little bit more casually? What’s your thoughts about how you want to navigate this part of the process with him, with the builder and the drafts person?

Tatiana
Yep, so we won’t look into a preliminary agreement in that we are both in agreement that we’re going to keep the plans of this first phase. That was probably part of the initial, how are we going to work this out? All right, it’s not going to be a preliminary agreement. I don’t want to be tied up to you, and I don’t want you to feel tied up to me in this initial phase. So he said, “Yep, I appreciate that, and that sounds like a good idea.” So, I sent him the copy of the PDF of what a PAC agreement looks like, and we’re negotiating at the moment, or just trying to understand the implications of those points of the PAC agreement for our little project, or at least this first stage of seeking the design of the build. 

Because he said, “This is a very interesting thing.” Because being his first solo clients, it means that he agrees and he doesn’t have any experience with PAC process. He has offered to do all of this in design stage for free, and so going back and forth and doing this for free. And I’m going, “No, you’re meant to be a consultant.” But, I mean, I don’t know, this is just my assumption, is he doesn’t want to lose the first client because of the charge. And so, that’s been a bit like, “I don’t know to deal with this.” Because I appreciate not having to pay for it, but at the same time, and I haven’t done that before, but I know it’s not going to be just an hour here and there. Like, it’s going to be a long time, and it’s going to be quite a few meetings getting bits and pieces together. So I guess, we’re kind of playing it by ear as we go. 

It is probably because there isn’t a contract, there isn’t a PAC contract. And he said, “I’ll do it for free as many times as you need to meet.” I’m going, “Man, that’s a lot of time.” But, yeah, I think I’m very open to continuing that conversation as we go, and if at some point he says, “Yeah, that’s a lot of times.” Then I’m happy to reassess and have that conversation again at that point. But yeah, there isn’t a contract at the moment, and it’s just a ongoing conversation of how things are going and what sort of time commitment and cost is involved than we’re willing to be accountable for.

Amelia Lee
Do you have a timeline that you want to get this project happening in? What’s that look like?

Tatiana
So we bought the block, I think around May, June, and we are thinking about two years for design, two years to move in. So, what’s that? June, July?

Amelia Lee
Middle of 2026, yeah. So, that’s a fairly realistic assessment, all things being equal. The red herrings in that will be whether Council takes a particular amount of time to approve, given the constraints on the block. And, I suppose, whether the fact that they don’t have particular mechanisms in place about what those buffers mean and those kinds of things mean that ultimately, you experience some delays. But they’ll also have obligations to meet required timelines. It’s just where, I suppose, your approval sits in their definitions of process as to what those timelines might be. 

We’ve spoken about this inside HOME Method, every builder has to have a first project. It’s one of those things, isn’t it? You never really want to be the one who is the first. And at the same time, we’ve had a fair few members be the first project of their builder. And it can have mixed results. The challenge is, and it’s really great that you’ve recognised it, is that your ideal scenario for this PAC process, this builder’s going to be spending a fair amount of time with you and is also going to be investing a fair amount of time in giving you costing and buildability feedback. That’s the whole point of their involvement at this point, during pre-construction. And will that be problematic for them from a financial point of view? Do you know how this builder is planning to exit where they currently are in terms of if they’re working for someone else? How are they planning on starting their business as a business operator? And do you also know where they’re at with their license in terms of what they’re allowed to do, from a solo operator point of view? Have you had those conversations yet?

Tatiana
No, we haven’t. We looked at his license, and for what I could see very superficially, it was a fully, what’s the wording for that – operable license?

Amelia Lee
A legitimate license?

Tatiana
Yeah. And again, that’s one of those things that, as a foreigner, I’m going, “If he says he’s a builder, isn’t he allowed to build? Is there more to it than that? And why is that the case?”

Amelia Lee
Yeah.

Tatiana
So I just assumed, until now that you’re asking that question, I assumed that if he was going solo… And I think he’s staging himself out of this other big company, he’s not giving them a, “All right, this is the last contract that I do under your name” kind of thing. I think he’s staging himself out. And hence, he’s wanting us to be part of this stage without pricing, because he’s building his name. It’s the case that I get. He’s building his reputation. He’s wanting to be known as his own name without the umbrella of this other company. So, I don’t really know how the whole separation is going to be. I do know that because the houses that he’s built would be under the umbrella of this other company, so I’m not sure how to compare, “Okay, well, that’s that guy, and this is this guy.” Because it’s under the same umbrella. I do know for the houses that I have seen around, because there’s plenty of houses built by this company, I do know that they are good quality, and they’re often a name that sounds around town. And the houses are well-known for being good quality and well-finished and not having any issues later on or disputes or anything like that. 

I have friends that live in them, so I’ve seen the houses inside and all that sort of thing. But, yeah, I don’t know, I’m not sure. Now I’m curious.

Amelia Lee
Yeah, it’d be interesting to have that conversation with him, because I think one of the biggest challenges for a new builder is A, do they know how to price projects well? Because if you’re working for another builder, it depends whether he’s had a builder role with this builder, or he’s been a supervisor. So, he could have been using his own license under this umbrella company, and has been running it like a builder would. But they might be the ones that are pricing the projects, and then his responsibility is managing a team to then execute according, and be accountable to the price predictions that were put in place by the builder company. And so it’s very different, I think, as a builder operating a business. 

It’s a different mindset to forecast what a project is going to cost, versus then build a project against what somebody else forecast. And so, his ability to actually estimate hours, look at a set of drawings, do take offs, figure out how much it’s going to cost and what it’s going to take to put that project together, you just want to probably have the conversation of, does he have any experience in that? How has he gone with estimating jobs? And I mean, the benefit of you doing the PAC process with him is that you’re going to very quickly say, “How does he do that?” Because he’s going to be giving you estimates along the way. Like, if you were doing a tender and then signing a contract with him, you wouldn’t know how accurately he had priced the project until the project was being executed and you saw whether he was panicking because he got it wrong. You’re actually going to get to see during the pre-construction, his confidence in his ability to forecast the cost of building your project and strategising the most efficient way to build it and what it’s going to take. But it would be worth just having that conversation. 

My hope is that because he’s new to his own business and he’s also keen to build his own reputation, that you’re going to have this lovely opportunity to have some really candid conversations. Because it’s a leap of faith for you, it’s also a leap of faith for him entering this new process. And so, there can be a really lovely collegiate relationship that can come from that, a really great collaboration, where you’re both able to bounce off each other, learn from each other, support each other in your shared goals, and really lean into that experience. And as long as the communication lines are kept open and he’s being really candid about stuff, then you can know that he may not know 100% how to do it, but he is demonstrating that he’s upskilling himself, he’s got resources he can lean on, he’s not batting blind. He’s aware of what he doesn’t know, and he’s doing the work to figure that out. So, I see that’s where this goes well for people. 

Every builder, their license has a figure against it as to how much work they can have on to a financial value. And so, it’s just a cursory question to ask, “Does your license cover a project of our budget level?” And because every time a builder needs to up level in terms of the amount of financial work that they’re doing inside a year, this is for most locations, there’s a whole heap of hoops that they have to jump through to get up to that next threshold financially. And that’s how the industry protects, from a licensing point of view, builders just taking on loads and loads of work that they may not actually have the financial resources to complete. The other thing that I think would be worth having the conversation about is, he is not going to bill you for work during construction until he’s cash flowed some of it himself. 

So, how are his cash flow resources like? If he’s been working for somebody else, and he hasn’t been doing his own projects, what are his cash flow resources to be able to get your project going? Because that’s when you see things go pear-shaped with builders, when they are super tight on cash flow, and it’s starting to hurt them personally because they’re not paying themselves, their house is on the line, their family’s in trouble, all of that kind of stuff. That’s when you see things start to go really pear-shaped on building sites, and they’re delaying their payments to their subcontractors, and subcontractors are getting narky about it, and orders aren’t being paid for, and all of that kind of stuff. And the screws start coming in on them. So, it’s worth having that conversation of, “Look, this is your first job. What does it look like financially for you in terms of cash flow? How are you doing that? And how are we going to know that it’s going to be okay as we navigate it?” 

And I think, too, the benefit of the PAC process is you’re going to be able to have lots of really detailed conversations about, “Okay, what does it look like during construction? How long is this project going to take?” And see if he sounds like he’s got the ability to program a project, he can schedule it out, he can give you feedback on how long something’s going to take, how many people are going to be required, all of those kinds of things. So, he’s not brand new to the industry, he’s just brand new to a business. So, that’s the thing that’s the thing to explore. And, I would definitely get it in writing that you’re going to own the designs. The curious thing that I have in this, and we’ve had this conversation, because there’s been a few people who’ve used those design build setups with their companies, and the ownership of the design in a design build scenario will always be with the person that paid for the design. 

Like, that drafts person, I’m curious, is that draft person working for free? Or is the builder wearing the cost of it and then just not charging you for it?

Tatiana
We would be paying for the draftsperson.

Amelia Lee
You’re going to pay for the drafts person, and the draft person’s going to be directly contracted to you?

Tatiana
Yep.

Amelia Lee
Yeah, that’s good. And so, your conversation about the ownership of the design needs to be with the drafts person. The builder’s quite irrelevant to that, because the financial relationship is between you and the drafts person. I think then, it’s really great that you’ve used the PDF resource inside HOME Method about the PAC process. So then, just starting to see if the drafts person can lay out for you a bit of a program of, “Okay, when are we going to have the first round of designs? What’s the timeline then for our review?” All those things that we talk about in the Fee Agreement Checklist to see, okay, how do we project manage this design phase so that it happens in a timely fashion, and you don’t have that builder disappearing for three months, trying to get a response back to you and you’re not getting any ability to move on, because you don’t know what the project’s costing where it’s at, and all of that kind of stuff. So, does that all make sense?

Tatiana
Yeah.

Amelia Lee
Awesome. I mean, I think it’s always going to be a challenge when you’re located in a regional location. Because, like you said, you don’t have the multitude of people to choose from. The benefit that you do have is, I think you can actually create some quite intimate collaborative relationships with people when they’ve got the right mindset. So, I think that there’s some really exciting opportunities in how you can all work together, seeing how that goes with this. So, I’m looking forward to seeing how it plays out. Can we talk about the design, and, I suppose, what your goals have been for the design, what you’re thinking about the design, how you’re building your brief and your expectations around the kind of home that you want to create? I’m really keen to understand more about that.

Tatiana
Yes. Okay, so in the first couple of interviews with the two builders in town, what came very often in those conversations was that the budget that we’re looking or the loan that we’re looking at getting with the banks, it’s not going to get us too far. And so, most of them said, and I’ll give numbers, I don’t think that really matters much, but most of them said, “Look, to build around town at the moment is about 2,600 per square meter, and that won’t get you more than maybe 200 square meters of a house.” And so, I found that very helpful. Because we were already listening to HOME Method, and I was like, “Oh, that is a good place to start in terms of limitations and not dreaming too far ahead of ourselves.” And so, with that, then we started looking at, “Okay, so what things can blow up the budget, and what are we looking for for a design?” Say, in our first conversations, I’ve always said to my husband, “I’m not looking for a big house. I’m only wanting to have a functional house that’s well-distributed. We don’t need a grand space, I don’t think, and we can’t anyway.” 

So, things that affect us being able to build within that budget would be changing shapes. I remember hearing that in one of the podcasts or somewhere in the HOME Method. To give ourselves the better chance of fitting within the budget, we’re going to have to go square or rectangle. So I did play a bit with squares and rectangles within the block of land, and what does that mean for the sun? What does that mean particularly for the Western sun? Because in our current house, we’ve got a big block of land. So we’ve got front to south at the moment, and so it runs south to north. And so, we have a lot of wall, and we have the wall against our mushroom against the Western sun, and it gets blasted with the sun all summer, and it gets really hot, particularly at night time, because it’s a brick wall. And so it keeps it decent during the day, but then it releases all of that heat during the night, and it is a sauna. 

So anyway, so just trying to work, play with shapes, rectangle, squares, in the different places, and what would that mean for a place in a car park that would shield the Western sun? So within that limitation of 200 square meters and square or rectangle, we are looking at four bedrooms, because we do have a lot of people coming to our house to stay with us, and oftentimes, that is families, like families of five or six. Yeah, it wouldn’t be a crazy thought for that to happen. And so, usually, in this parent house, something that we’ve done, it works really well, is that the bedrooms are located almost on their own. So like, the bedrooms are separate from the social areas, which I love. I don’t like mixing. I don’t like rooms that come out of social areas, necessarily. And it allows the students say, give almost a whole area of the rooms to our guests. One bedroom, two bathrooms for our guests, and then our kids move, and they use one room, the three of them, and then they use our bathroom for that weekend or that week, whatever. And so we would like to replicate something similar to that where we are.  

And I think this is ambitious, but we would love to have a social powder room or bathroom. So that bathroom that is meant to be for the guests, when guests are here, which is at least once a month, really, like we do a lot of hosting, and so we would like them to not have to share their bathroom with all the people. And that is a dream, but I’m not sure if we’re going to get there, we’re going to stretch the budget that far. But yeah, that would be ideal. Something that we do have in our current house is… So this house had four bedrooms, but they were all relatively small. And we converted one of those bedrooms into a multi-purpose room, which it’s got an office. It’s actually where I am at the moment, and it’s got some bookshelves and a lot of storage, and we can have a TV there. 

And we’ve put sliding door with glass, which is awesome when we have people with kids, because the kids just come into this room, shut the door, and we don’t hear a peep. But we can all see them, because the living room is just off this bedroom, and so that works so good. And the screens are in a way that also, we can keep an eye on people doing homework, and just just privacy and at the same time, very joined to the social space. And we would love to replicate that without having to necessarily add a room, just somehow divide a living room into two areas or something like that. We would love to replicate this room into the new place. And I would love to be able to keep our garden green, which is a sad, rough thing here, with the weather that we’ve got. And oftentimes, we have water restrictions. And if you do want to keep a green grass, you have to pay a lot of money for water, and we’re not in a position to do that. So, I would love to investigate the option of using gray water for gardening, but I have no clue. And I think, investigating the options for that will come soon enough.

And so, at the moment, I don’t know what sort of prices we’re looking into for that sort of thing, and whether the budget is going to allow us to do that, or whether the budget is just going to be for the bare minimum, floor tiles, walls, kitchen, bathrooms, done kind of thing. We don’t know that yet. Yeah, because of the weather, again, would love to be wise with the material selection for exterior walls particularly, just because I love brick houses. Because during the day, they are nice and fresh. It is a nightmare at night time, and so it’s not the greatest for bedrooms. But for the living room, we feel the difference, and there is no aircon on or we’ve got evaporative cooling, and there’s nothing on. And oftentimes, we can walk in at one or two, and the house is not cold, but it is fresh. It’s not like a hot car or something like that. So that’s something that I would like to pay attention to. 

And I think, a simple roof, as simple as we can, and I don’t know in terms of physics and the engineering of things, whether just having one roof that has most of it, if not all of it, facing north, whether that is more expensive than having your normal, this shape of roof kind of thing. It is very much all dependent on the costing as we go into the full design process. But yeah, those are the main concepts at the moment.

Amelia Lee
In terms of having the roof facing north, do you mean to have north-facing roof so you can put solar on it? Or do you mean that it’s open to the north?

Tatiana
Yeah, that we can put solar on it.

Amelia Lee
Gotcha. And, have you by chance, had a look at any of the seven star floor plans that are on the yourhome.gov.au website?

Tatiana
I don’t think so. No, I don’t think I’ve got to that yet.

Amelia Lee
It’d be interesting for you to have a look at some of them, because they do a lot of this kind of pavilion design. And they might be a good starting point for you in thinking about clean layouts that are super functional. I’ll shoot through a link to you after this. And we’ll pop one in the show notes as well. There’s some really good floor plans in there. I can see that having that multi-purpose room, and it might be that it’s the fifth bedroom / study /second living space, conservatively-sized space that just acts as that completely multi-purpose room, and then you could keep your living, kitchen, dining quite well-proportioned and compact. But use the layout of the planning to create the relationships between those spaces so that you get the visibility that you want. But it’s also a room that can be closed off, should it need to be for guests and things like that. So, it sounds really good. I love that you’re very clear about this… “We would like this, but not sure if the budget’s going to extend.” Like, you’re being super realistic about what your budget’s going to mean for your choices, which is a really great place to start from. So, I think that’s really, really great.

Tatiana
It was very funny. Oh, sorry.

Amelia Lee
No, no, that’s alright.

Tatiana
I was just going to share just a little story. Because I think it was the first interview with one of the builders, and it was the shock, like, this is what the square meterage is, this is how much it would get you, and it felt like there was so many things against the project. And we got home, and my husband was a bit like, “Oh, should we just resell the block of land?” And I was like, “Challenge on. Challenge accepted. If you tell me small, we’ll build small.” We’re thinking, we’ll go as far as we can, and we’re hoping we can get something that’s going to be comfortable enough. It is what we can afford, and if we can’t build something bigger because we can’t afford it, well, so be it. Let’s just be real with what we have in our hands, I guess, is probably where we’re going.

Amelia Lee
Well, I think you’ve got a lot going for you. Because you’ve got the space to do a super simple plan layout, to do that really clean pavilion-style home that is a simple rectangle. I know that we can feel that that’s going to create a boring-looking home. It looks in plan like it’s a really boring shape. But I think that’s just largely because we’ve been conditioned over the years to see these very stepping in and out articulated floor plans that we feel that when we go for that simple rectangle, that we’re being boring. 

I’ve always found, as a designer, that you start with a very simple approach. You move through this complexity, and in the process of really honing the design and getting it to sing, you actually move back to the simplicity. And that’s when you know that the design is actually going to work really well as a home. And so, I think back to my days at Mirvac, and we did lots of lovely designs that were when you looked at the floor plans, were super simple layouts. But then there’s things that you can do, you can have a very simple roof form, you can do all of those kinds of things. You can manage all the affordability. And then, you can then spend things on the materials, the landscape, how the outdoor space is detailed. There’s lots that you can do to add a richness and to elevate the feel of the design overall. And also, the benefit of it is that that’s stuff that you can spend on over time, you don’t have to do that all straight away. You can add that as more resources become available. 

But there’s something to be said for creating a beautiful pavilion-style, simple home that aggregates the spaces, the distribution as you talk about it, has those spaces arranged the way that you want to, and that ultimately, is really functional and is going to work for the site, and that you can actually afford to build. And yeah, I really look forward to supporting you in seeing how you can get this house working from day one as the functional home that you want it to be. So that it does the job that it needs to, and then you’ve got the scope to do things over the coming years, particularly as the boys grow and their needs change. It might be then, that you’re playing with how the landscape design is working and those kinds of things. So, I’m really looking forward to it, Tatiana. I think it’s really exciting. I love that you see the challenge in it. I think 200 square meters is going to be plenty for what you need. I think you can actually challenge yourself to even keep it more compact, so you’ve got some cash in reserves for those contingencies, and also for the thermal kind of things that you want to make sure to make it suit the climate. 

Did you have any questions before we wrap up?

Tatiana
I don’t think at this point I’ve got much to ask. I think there’s plenty already to consider.

Amelia Lee
Awesome. Well, I’m looking forward to getting you back on in a while and seeing where you’re up to. And I know that listeners will love hearing your updates and how this project is progressing. Thank you so much for being here and for sharing your journey with us, and how it’s starting off. It’s really, really great to hear, and I’m super excited for you as you embark on this very, very exciting journey. So, thanks so much for the conversation and for sharing it with us.

Tatiana
Thanks to you, Amelia, and thanks for all the work you do. And yeah, I’m very excited too, and very excited to pick your brain along the way and see how things progress for us.

Amelia Lee
Awesome.

RESOURCES:

Free Home Designs that are architecturally designed with energy efficiency in mind >>> https://www.yourhome.gov.au/house-designs 

Access the support and guidance you need (like Tatiana) 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