Construction leads mean different things depending on who is talking. In much US advice they are bid lists for commercial projects. For an Australian residential builder, a construction lead is a homeowner who wants to build, renovate or extend and has asked you for a price. This guide is about the second kind.
Construction leads: tenders versus homeowner enquiries
A tender lead is a notice that a project is open to bid. The buyer is an organisation, the process is formal and a lot of builders are pricing the same job. A homeowner enquiry is one person with one block or one house, who has often spoken to a handful of builders at most.
The work around each is different. Tender work is pricing documents and meeting submission dates. Homeowner work is judging whether the person is ready, then spending a day or more on a feasibility or a quote. If you are a residential builder, a list of open tenders will mostly send you the wrong kind of work.
Where residential enquiries come from
| Source | What you get | Trade-off |
|---|---|---|
| Referrals and past clients | Warm, trust already built | Not on demand |
| Architects, designers, draftspeople | Projects with drawings | Takes time to earn, and they may send the job to several builders |
| Local search and your site | People looking now | Slow to build; your site has to answer what they want to know |
| Your own ads | Volume you control | Includes window shoppers; you need to filter |
| Shared lead sources | Fast volume | The same enquiry often goes to several builders |
| Exclusive enquiries | One builder per homeowner | You pay for enquiries that go nowhere |
No single source wins. Most steady builders end up with two or three, and know which one pays.
Judge each source by signed contracts
Cost per enquiry is a number that looks like a measurement. A builder who gets 30 enquiries for $3,000 and signs nothing has paid for nothing. A builder who gets 6 for $3,000 and signs one has a different problem to solve, but a real one.
Use your own figures, not an industry average. For each source, over a few months, write down what you spent, how many enquiries came in, how many you quoted and how many signed. Divide the spend by signed contracts. That is your cost per signed contract. The worksheet for custom builders walks through it.
What to track from first contact
- Date, source and the person’s own words.
- How long it took you to reply.
- Whether they own the land or house, and whether drawings or approvals exist.
- Their budget range and whether they have finance in mind.
- Whether you quoted, when, and when you followed up.
- Whether they signed, and if not, the reason they gave.
One row per enquiry is enough. A made-up example:
| Date | Source | Reply time | Land, drawings, budget | Quoted | Outcome |
|---|---|---|---|---|---|
| 3 March | Designer referral | 2 hours | Owns land, concept drawings, range given | Yes, 20 March | Signed in May |
| 5 March | Own ads | Next day | Still looking for land | No | Ring back in June |
A spreadsheet is enough. The point is that after three months you can say which source brings contracts. For the questions to ask on the first call, use how to qualify building enquiries.
Rules for taking residential work
Rules differ by state, so read your own regulator. As examples, NSW requires a written contract when the price is over $5,000 including GST, with a more extensive contract for work over $20,000. Victoria sets the major domestic building contract threshold at $10,000. Queensland requires a written contract for domestic building work over $3,300 including labour, materials and GST. The NSW page also says the most you can ask as a deposit is 10 percent. Other states have their own rules. In New Zealand, the building regulator’s prescribed checklist says a building contractor must give the homeowner that checklist and prescribed disclosure information before a contract is signed when the work will cost $30,000 or more including GST. Check the regulator for your situation, because this is not legal advice.
Questions for any paid source
- How many other builders receive each enquiry?
- Does anyone ring the homeowner before it reaches you, and what do they ask about land, drawings and budget?
- What happens when an enquiry turns out not to be real, or is outside your area?
- Can you stop at any time, and what do you owe if you do?
Get the answers in writing, then track the source like any other.
What to avoid
- Bid lists. Wrong buyer for most residential builders.
- Bought or scraped lists of names. The people on them never asked you for a price, so none is an enquiry. Ringing cold costs a day and mostly buys annoyance.
- Any source that cannot tell you how many other builders get the same enquiry.
- Any report of results with no contracts in it.
Where to start
If you only have time to do one thing, pick the source that already brings contracts and ask how to get more of it. Then add a second source and track it separately. Why builder quotes go quiet is worth reading before you spend more on enquiries, because many quotes die after they are sent.
PreBuild Systems finds homeowners for builders, rings every one who enquires, checks six things and sends each to one business only. Read how it works on the homeowners page, or see custom and new homes.
Common questions
What are construction leads?
In the United States the term often means bid lists for commercial projects. For a residential builder it means a homeowner who wants to build, renovate or extend and has asked for a price.
Where do residential builders find leads?
Referrals, past clients, local search and ads, your own website, architects and designers, and paid enquiry sources. Judge each by signed contracts, not enquiry count.
Is a bid list the same as a homeowner enquiry?
No. A bid list shows projects open to tender, usually commercial, while a homeowner enquiry is a person asking you for a price on their own home.
What should I track from the first contact?
Date and source of the enquiry, time to first reply, whether they have land, drawings and a budget, whether a quote went out, and whether a contract was signed.