Risk Awareness and Management

For the home-owner, there are many risks associated with building a house as the project involves a large number of different people, products and services. Even if the whole process is totally hassle-free – and you would be truly lucky if it is – problems can still arise over the next five or 10 years because of poor construction practices or inferior materials.

Risk Variety

Certainly, the single most important issue to be aware of when building your house is RISK. As long as you know what to expect, you can take steps to avoid them, or at least to minimise the impact.

Cost is usually inversely proportionate to risk – the lower the cost, the higher the risk. But this does not mean that you should pick the contractor who submits the highest bid either!

Knowing the building specialist is no guarantee of reliability, quality or service. You’d need to select him based on merit.

There are four broad categories related to the risks you will face:
  1. Abscondment/bankruptcy

  2. Inferior end product

  3. Negligence in servicing and warranties

  4. Over-blown budget

So what is a home-owner to do?

A good guide is to look for an organisation which takes ownership and pride in its work, and insists on a certain standard even if it exceeds your budget. Typically in any industry, this would be a company which:

  • Is proud of its track record

  • Has a reputation to maintain

  • Has direct interest in the outcome of all its projects in the short, medium and longer term

  • Is 100 per cent focused on excelling in the trade

  • Will deliver on its commitments

  • Uses a tried-and-tested workflow/business model.

You are also advised to look for its dedication and investment profile specific to building houses, not just other structures. This is important as building a house involves many details that the contractor must have an aptitude and passion for – details which are essential to creating a cosy haven called home.

Whereas a reputable house builder can almost certainly build a factory of good standard, the converse is not automatically true. In a home, there is a greater need for aesthetics and functionality, and for them to seamlessly coexist.

If all else fails and you are unable to decide on your construction partner, this last acid test always works. Talk to previous customers and see how many are willing to vouch for their builder’s credibility, reliability and responsibility in delivering the house, and the followup service after the guarantee period.

You owe it to yourself to get a list of references and contact details so you can check out the builder(s) yourself. Remember, your sanctuary is an important investment, and you should involve yourself in any way you can – especially in selecting the team which will make your dream a reality.

Also refer to our article: "How to choose the right builder"