First time builders- pit falls.

Hi all, wish I’d found this forum earlier. I’ve owned a few homes but this is the first build. Build hasn’t even started yet but I’ll never do it again. I don’t know if all builders are the same but I have found the process somewhat underhanded. Hidden costs, exuberant pricing for upgrades, pressure to make decisions and sign documents at every stage and customer service is non existent at middle to senior management. I work in a related industry so know some pricing. To give some examples. Upgrade air con. Real price $2570. Their price $5500. Internal doors upgrade, price via Bunnings about $50/door, their price $140/door. And the list goes on. When questioned it is basically “up to you. Do it or don’t have it”. Even chasing the flooring I was shafted. I had signed the agreed colours etc. I later (before the land has even registered) asked to change one room from carpet to tiles. The price was very high (as expected by now) however on top of that I am to be charged a $500 admin fee! Nothing has been even ordered yet! Apologies for the long post but at 50yo and building my first home I am so disappointed I’d pull out if I wasn’t being penalised…..again. Be careful people. Don’t be pressured to sign in 5 days, make smart choices, get as much in the contract as you can. Everyone is in business to make money but being extorted is just plane criminal in my opinion.

[quote="Nosajk"]Hi all, wish I’d found this forum earlier. I’ve owned a few homes but this is the first build. Build hasn’t even started yet but I’ll never do it again. I don’t know if all builders are the same but I have found the process somewhat underhanded. Hidden costs, exuberant pricing for upgrades, pressure to make decisions and sign documents at every stage and customer service is non existent at middle to senior management. I work in a related industry so know some pricing. To give some examples. Upgrade air con. Real price $2570. Their price $5500. Internal doors upgrade, price via Bunnings about $50/door, their price $140/door. And the list goes on. When questioned it is basically “up to you. Do it or don’t have it”. Even chasing the flooring I was shafted. I had signed the agreed colours etc. I later (before the land has even registered) asked to change one room from carpet to tiles. The price was very high (as expected by now) however on top of that I am to be charged a $500 admin fee! Nothing has been even ordered yet! Apologies for the long post but at 50yo and building my first home I am so disappointed I’d pull out if I wasn’t being penalised…..again. Be careful people. Don’t be pressured to sign in 5 days, make smart choices, get as much in the contract as you can. Everyone is in business to make money but being extorted is just plane criminal in my opinion. /quote]
Nosajk

Sorry to hear you are having a bad experience.

Unfortunately your experience is very common. One of the problems with the project builders ( I am assuming you are using a project builder as you mentioned colour appointments) is that to be competitive the builders have to sell the dream of having your new home on really low headline rates. Bottom line is that some of them are working off margins as low as 4-5%.

The main way they try and improve their margins is by charging 30-40% for any item that is not included in the base price ie at colour appointments. Every time you want something changed it creates work for the back office staff so these costs are passed onto you plus some "pain in the rear end" money. So you can never compare a bunnings price to a project home builder's price, you'll only give yourself a stroke.

This creates an atmosphere where clients feel that they are getting overcharged, even though in reality the total build price is cheaper then it should be.

Having worked for a couple of big builders, the reason my partner and I started our business was provide our customers with a completely transparent process. We give our customers full detailed spreadsheets with every item costed and a fixed margin. So our clients have the ability to source cheaper items if they can find them at Bunnings, or bing lee or anywhere and we refund the difference.

We even have had one client go to the renovators auction to buy flooring. On our last job we refunded around $11k as she was able to do some clever shopping.

So the point I am trying to make is, its great you have started this discussion as it's a real problem in the building industry, but it is possible to do it better with more honesty and transparency that starts at the beginning of the build.

I hope it all works out for you

regards

Simeon

Cheers and I agree with a lot of what you say. My contract says 20% builders margin. Whilst high I am happy to pay this. I’m not happy at between 50% and 200% though. You really get a gun held to your head. Either pay what we ask or don’t have it. Your choice. There’s no need for that and in fact I’d have spent more with them if they had been fair pricing. As I’ve said, I at least have some idea of pricing, process and costs. My elderly parents or young daughters don’t and that just means they are fodder for the wolves. Sad state of affairs I’m afraid.