Picture this: your builder promises your new home will be ready by November, so you tell your family that Christmas will be at your place this year. You even buy flights for your out-of-state inlaws! 

But it’s September now, and instead of a home, you have a construction site.

In fact, your builder has scarcely been on-site this month, busy with other people’s houses, not yours.

“No worries,” they say. “We’ll get it done with time to spare.” 

Meanwhile, you’re forking out for rent payments and living out of boxes — so you’d be forgiven for stressing about the fact your builder might have bitten off more than they can chew.

Looks like the in laws will be staying a hotel…

Sadly, this is an all-too-common scenario: would-be homeowners left in turmoil due to builders overcommitting and under delivering.

So why does this happen? And as someone looking to build a new custom home, how can you avoid getting caught in this trap?

Overpromising and Underdelivering: The Cost of Builder Overcommitment

The issue isn’t a new one — builders taking on more jobs than they can actually handle.

Hoping to ride the wave of housing booms and other such opportunities, some builders will simply say yes to every project.

However, instead of successfully juggling several or even dozens of projects, the reality is often disaster. For their clients, that means endless delays, nasty financial surprises, and living in temporary accommodation for months longer than expected.

Even if they do have the capacity, poor planning and poor communication can land overenthusiastic builders (and their clients) in that very same predicament.

This issue was particularly prevalent during the COVID-19 pandemic, when a surge of new building projects led to widespread builder overcommitment.

COVID-19 and Builder Overload: What Went Wrong?

Motivated by the home-building grants and bonuses available during the pandemic, many Australians leapt head-first into construction projects. But in place of new homes, many ended up with financial and legal headaches instead.

A common cause of such headaches involved builders exceeding their home warranty insurance limits because they had taken on far too many projects.

(Home warranty insurance caps aren’t just bureaucratic red tape — they’re a financial safeguard for homeowners if a builder goes bankrupt or fails to complete a project. Builders are rated by insurers based on their ability to manage projects and finances responsibly, and when they exceed this cap, it’s the homeowners who bear the burden!)

Many homeowners were shocked to discover their claims denied, leaving them with unfinished homes or projects dragging on for months as builders waited for their insurance caps to reset.

This threw their  plans and finances into chaos.

So how can you avoid builder overcommitment and insurance dilemmas to safeguard your home?

Avoiding Overcommitted Builders: Key Questions to Ask

Avoiding the nightmare of extended timelines and blown-out budgets starts with choosing the right builder. Here’s what you can do:

1. Look for early planning and upfront timelines. From the first meeting, a good builder will discuss realistic timelines and potential challenges. If they avoid these conversations or make vague promises, it’s a red flag.
2. Find out how they manage their workload. Ask about the systems they use to track and organise projects. A well-organised builder should be able to explain how they stay on top of their commitments and avoid overcommitting.
3. Check if they stick to their limits. Ask the builder about their home warranty insurance and how many projects they’re handling. A builder who knows their limits will be transparent about how they manage multiple projects without exceeding capacity.
4. Ask about their trade relationships. Builders with strong trade relationships and organised management tools will use software to schedule work and ensure tradespeople prioritise your project. Timely payments and strong coordination with trades are essential to keeping everything on track.
5. Don’t assume all builders manage projects perfectly. Ask for regular updates. The right builder will be open about their timelines and any possible delays. A builder who communicates clearly and often is less likely to leave you guessing.

Your Next Move: Choosing a Builder Who Doesn’t Overpromise

The last thing you want is to find yourself staring at a construction site on Christmas when your builder promised you’d be opening presents and chugging eggnog in your new home.

By choosing a builder who understands their limits, communicates clearly, uses powerful project management systems, and maintains solid relationships with trades, you can avoid the pitfalls of builder overcommitment and keep your project on track.

With that said, selecting a builder who manages their workload responsibly is just one part of the equation.

That’s why we’ve created this free guide for you to download:

Build with Confidence – 7 Things You Must Know Before Designing a New Home

It’s packed with practical advice to help you steer clear of common pitfalls and ensure your project stays on track.