With builder leads for custom homes, the number that matters is cost per signed contract, not cost per lead. Enquiries are plentiful and contracts are rare, so a source that looks cheap per enquiry can be the most expensive way to sign a job. You can find your own figure with three numbers: what you spent, how many quotes you gave and how many contracts you signed.
Why lead volume is the wrong target for custom homes
A custom home takes months to decide. The homeowner is buying or has bought land, working with a designer and talking to a bank. Many enquiries come from people in the first week of thinking. They are real people, but they are not ready.
If you chase volume you spend your time on the early thinkers and have less for the ones with land and finance. A smaller number of ready enquiries beats a pile of early ones. The guide on how to qualify building enquiries sets out how to tell them apart.
What to know before you spend a day on a feasibility
A feasibility, site review or early costing costs you time. Before you offer one, get the basics on a short call. If the answers are vague, offer something smaller first, like a phone chat or a written list of what you would need.
The call can be as plain as this:
“Before I book a site visit, can I ask four quick things so I come prepared? Do you own the block yet? Have you got drawings, or a designer working on them? What range are you working to? And have you spoken to a lender yet?”
If two or more answers are “not yet”, book a phone chat now and the site visit once those are sorted. Put a date in your diary to ring back. When they do come back, start from your notes, not from scratch.
For the homeowner who is early, a short, kind reply keeps the door open without costing you a day:
“Thanks for getting in touch. It sounds like you are still sorting the land and the design, which is the right order. When the block is settled and a designer has started, ring me and we will book a site visit. In the meantime, a rough idea of your budget and the size of home you want will help me tell you early if we are a fit.”
Land, drawings, budget, finance
- Land. Do they own it, are they buying it, or still looking? Do they know the zoning, slope and services? Land that is not yet purchased changes everything.
- Drawings. None, a sketch, concept drawings from a designer, or full documents? The further along, the closer the price.
- Budget. A range, not a promise. If a homeowner will not give a range, they may not have thought about it, or may be shopping.
- Finance. Have they spoken to a lender? Not a promise of approval, just a conversation. Someone who has not may be months from signing.
- Decision maker. Who else has to agree, and will they be at the first meeting?
The first four match the questions on the custom and new homes page.
Tracking builder leads to a signed contract
Set up one simple record for each enquiry: the date, where it came from, who replied and when, what they have (land, drawings, budget, finance), whether you gave a price, and whether they signed. Update it each time something changes.
Here is a worked example with made-up numbers, to show the working. Use your own.
| Source | Spend | Enquiries | Quoted | Signed | Spend per signed |
|---|---|---|---|---|---|
| A | $6,000 | 40 | 10 | 1 | $6,000 |
| B | $6,000 | 8 | 5 | 2 | $3,000 |
Source A has five times the enquiries and costs double per signed contract. Count the spend honestly. If you also spent your own hours on 30 enquiries that went nowhere, that is a cost too. Keep a window long enough to cover your sales cycle, because a contract signed in month five belongs to the spend of month one.
Where the enquiries come from
The sources are the same as for any residential builder: referrals, designers and architects, your own site and ads, and paid enquiry sources. Construction leads for residential builders compares them. Two points matter more for custom homes. Designers and draftspeople meet people who already have land and drawings, so they are worth the time it takes to earn their trust. And on your own enquiry form, ask one question that costs the homeowner a little thought, such as “do you own the land?”. Those who answer it already know what they want.
If you charge for preliminary work
Many custom builders charge for early work, such as site review, concept costing or documents, rather than pricing for free. It filters out window shoppers and pays for your time. Your state’s contract rules still apply to that early work. In NSW, for example, a written contract is needed when the price is over $5,000 including GST, and the same page says the maximum deposit is 10 percent. Other states set their own thresholds. Check your regulator and your adviser, as this is not legal advice.
For how to structure and price it, see charging for preliminary work.
PreBuild Systems finds homeowners for builders and checks six things on a call before it sends each one to a single builder. You can read more on the homeowners page.
Common questions
What are builder leads?
Builder leads are homeowners who have asked a builder for a price on a new home, extension or major renovation. For custom homes, the useful ones have land, some drawings, a budget and a way to pay.
Why is cost per lead misleading for custom homes?
Because few enquiries become contracts and the sales cycle is long. A low price per enquiry says nothing about what you pay per signed contract.
How do I work out cost per signed contract?
Add up what you spent on a source, then divide by the contracts you signed from it over the same period. Use a long enough window to cover your sales cycle.
What should a custom home enquiry carry?
Whether they own the land or are buying it, whether they have drawings or a design, a budget range, and how they will finance the build.