So, you’re doing research into building a new home. The prices from various builders are starting to come in, but there is so much variance in the quoted amounts. How are you ever going to decide which company to build with? Well I’m going to let you in on a little-known secret that builder’s use to get you to sign a contract with them for a price that seems reasonable, but is going to end up costing you allot more by the time you’re finished.
You see even though a builder offers you a fixed price building contact, there is still ample opportunity for the price of your build to increase. How is that? Well the building contact allows for items that have not been specifically detailed and chosen at the time of going to contract to have allowances budgeted for them for amounts that the builder believes he is able to supply the unspecified item for. The thing is, do you really want to have the $15 shower head from imported from China fitted into your project? When you chose the fittings that you really want in your home then the Builder has the opportunity to adjust your contract price with a variation. Usually each variation will cover the difference in the price of the item you have selected, plus allowance for the Builders margin but also and administration fee for carrying out the paperwork. As you can imagine this can make a significant impact on your final contract price, and quite often (especially with project home builders) you won’t find out what this is costing you until much later, as the paperwork lags behind the on-site progress.
What can you do to avoid this situation? When looking for a builder you need to make the choice, based not on price alone, but on what a builder offers you in the terms of value. Quite often larger builders will provide free quotations and cheap prices based upon the many assumptions they can make for inclusions in your home, and then sting you for the changes as the build progresses. Whereas a good custom home builder will take the time to walk you through a complete selections process to enable your home to be quoted just as you want it to be, with the items that you want included. When this front-end part of the process is done right then the rest of the process should be enjoyable, with fewer “surprises” coming up during the building process, making it more enjoyable for all involved.
To learn more download our free guide “The 7 Things You Should Ask BEFORE Signing Your Building Contract” here.