What to ask a building broker before you sign up

Building brokers can help inexperienced home builders navigate their process, but there are some important questions to consider, Consumer Protection WA warns.

Daniel Paton, whose business offers property advocacy help to people wanting to build their own home, said building brokers were similar to mortgage brokers in connecting clients with builders.

"They're really there to make sure what you want to build and matching you and fitting you with the best builder for that product," Mr Paton told 102.5 ABC Perth.

He said the introduction of many different building options in WA meant many people wishing to consider building needed to get more advice.

"What we're seeing now is the introduction of alternate building methods and I think that's what's actually brought out this building broker industry,"

he said.

"A building broker can be really beneficial just to help you think about things you might not have considered, but also steer you in the right direction of what builder naturally aligns with what you're trying to actually create."

Like mortgage brokers, building brokers are not paid by their clients, but by the building company that is awarded the work, and the fees typically range from 2.5 to 4 per cent of the construction price.

"Before building brokers, there were sales reps who worked for the builders to facilitate the signing-up of projects for builders," Mr Paton said.

"They were paid by the builder as a percentage of the construction cost, and it's the same model traditionally for a building broker."

Asked if that could create a conflict of interest for the broker, Mr Paton said: "Any good building broker, no different to any good mortgage broker, will walk their client through exactly how they're paid, when they're paid and the fees associated with it."

Consumer protection agency urges caution

Consumer Protection WA commissioner Trish Blake said there were important issues would-be customers should consider if they were engaging a building broker.

"Particularly given that the builder will pay for this service, as a consumer, I would want to know how that person is working for me and that they do have my best interests at the forefront of their mind," she said.

She also noted that unlike financial advisors, building broker services were not currently regulated by laws that compelled them to act in a client's best interests.

"The Australian Consumer Law does still apply because it's a service that's provided," she said.

"The service provided must be fit for purpose … and they must exercise or deliver that service exercising due care and skill.

"They can't be misleading about any aspect of their service."

Ms Blake said there were questions clients should ask about the service before they signed up.

"I would definitely be asking them which builders they work with as well, because I want to know that they're working openly with all builders or that I've got at least broad choice," she said.

"I would also be asking the broker what their role is if things go wrong, because if you're expecting them to stand up for you and advocate for you, you want to make sure that that is what they are going to do.

"The other thing it's so important to ask is what is their background, what are their qualifications?"

She said consumers should also keep in mind that even if they were getting advice, ultimately it was their name going on any legal contracts, not the brokers, and to pay close attention to what they were signing up to.