Browse Forums Building A New House 1 Oct 04, 2021 1:06 pm Hi there, I am building for the first time and so im noob. I am at the stage where land is about to title and builder is preparing a building contract. Builder's sales person is very nice and accommodating (so far). This person has told me that I can choose a template design and later on they can customise layout and stuff and bring in some appliances and nice features from other houses like recessed walls, bulkheads, feature piers, double vanity, modular wardrobes. They have sent me a document to sign (its not building contract, its just a preliminary document) that says I'm interested to build this house for this price and a standard specifications (which has numerous specifications missing which they told me over phone and email will be included). Now my question is should I sign the document and send it back to them on good faith that they will change the layout later? Other question I have is how detailed a building contract has to be to avoid nasty surprises? e.g. do they need to include e.g. if the vanity will have a bulkhead with LEDs on the top. or the kind of shutters for the garage or the quality (and sealing grade) of the stone on the benchtop or the thickness of glass used on each window or how high the tiles will be in the shower (1.5m or 2.5m) or whether or what kind of splashback will be used behind the countertops If they answer to above is "yes" all the way. Then where does all this information go? Re: Builder has not included details and wants signatures 2Oct 04, 2021 2:35 pm Hey TroyfwX The agreement is for a preparation of plans (PPA) and you will be up for all the costs if you decide not to proceed The builder will also own copyright so you will not be able to get other builders to quote. They generally give you a Budget/Estimate based on a sketch and a coloured rendering of the elevation. If you are happy to proceed and firm up the contract, including variations, siteworks, engineering, etc You will need to pay a deposit, around $ 5K- $15K and sign a contract. Beware, prices can still go up even after you have signed, client always wears the costs for any changes later at exorbitant rates Cheers Chris Designer,Engineer (Civil,Const & Envir),Builder,Concrete & Masonry Contract.Struct Repairs Re: Builder has not included details and wants signatures 3Oct 04, 2021 3:09 pm StructuralBIMGuy Hey TroyfwX The agreement is for a preparation of plans (PPA) Hi there, Yes you are exactly right, that is what that thing is called upon which I am asked to sign and lock in the price. I get that and I can sign on certain word of mouth goodwill. My understanding is later on they will prepare detailed plans and final building contract, upon which I need to officially sign and lock in the scope. That is what I wanted to understand what level of detail has to be captured when I sign. The examples I quoted above, does it go into that detail and leaves no room for interpretation/assumption. or its only "high level" like saying tiled bathoom with 400mx400mm. The above line does not specify tiled till what height, what areas of bathroom will be tiled, how much gap between tiles, epoxy tiled or grout tiled. Where should the details go. Thanks for your help. Re: Builder has not included details and wants signatures 4Oct 04, 2021 4:59 pm How does it lock the price in? You haven't made your final selections , nor do you have the engineering, details and working drawings? Builders not going to give you that for free, that's forms part of the $15K, pay up The Builder always checks the final price against the tender....prices go up, LOL they never go down OT you can prepare plans and engineering yourself and its cheaper to do so, then get 3 builders to quote Designer,Engineer (Civil,Const & Envir),Builder,Concrete & Masonry Contract.Struct Repairs Re: Builder has not included details and wants signatures 5Oct 04, 2021 5:51 pm TroyFWX Hi there, I am building for the first time and so im noob. I am at the stage where land is about to title and builder is preparing a building contract. Builder's sales person is very nice and accommodating (so far). This person has told me that I can choose a template design and later on they can customise layout and stuff and bring in some appliances and nice features from other houses like recessed walls, bulkheads, feature piers, double vanity, modular wardrobes. They have sent me a document to sign (its not building contract, its just a preliminary document) that says I'm interested to build this house for this price and a standard specifications (which has numerous specifications missing which they told me over phone and email will be included). Now my question is should I sign the document and send it back to them on good faith that they will change the layout later? Other question I have is how detailed a building contract has to be to avoid nasty surprises? e.g. do they need to include e.g. if the vanity will have a bulkhead with LEDs on the top. or the kind of shutters for the garage or the quality (and sealing grade) of the stone on the benchtop or the thickness of glass used on each window or how high the tiles will be in the shower (1.5m or 2.5m) or whether or what kind of splashback will be used behind the countertops If they answer to above is "yes" all the way. Then where does all this information go? Hi TroyFWX, I understand where you are coming from, you’re nervous that that some of the things that have been promised by your sales person are not included in the PPA and are questioning at what point are these clearly outlined. I don’t have all the answers but from my experience you want to include as much as you can in the initial PPA and contract as possible. Don’t trust sales people, they will tell you absolutely anything to get you to sign. No matter how nice! I have seen it time and time again, with other peoples building experiences. In initial meetings we pretty much had our entire plan/ drawings adjusted and everything we could think of added into the PPA, to get as accurate an estimate as possible. We had their initial house plan completely changed to suit our needs and this was done prior to us signing anything. From what you’ve described some of what you are inquiring about can be delayed until prestart, such as the shutters for the garage, kitchen bench tops, led lights, thickness of tiles, splash back, and tiling height in bathrooms (we did all this at prestart). What I would be worried about is that they have given you a template design and said customizations can be made later. This is what I think will end up costing you a lot extra. Try and get as much of the design aspect finalized/included before signing the PPA. You should also know what appliances are included and what your inclusions/specifications are straight off the bat. That way you will know exactly what your are happy with and what you may need to upgrade at “prestart”. Just as an example, from memory some of the things (not all) we included in our PPA- all design adjustments, ceiling heights, front door width, lighting packages, added stacker door to alfresco. Anything we could think of we added prior to signing the PPA. Hope that makes sense or helps. Re: Builder has not included details and wants signatures 7Oct 05, 2021 9:22 am Don't get too hung up on Bimboys comments, he's an alarmist and often suggests unrealistic courses of action to first time builders. Don't get overwhelmed by it. While there are provisions in contracts for increases (even in fixed price contracts), they aren't there as "gotcha" clauses for stooging you for more cash. Some builders have been known to use them that way, but I think you'll find most volume builders simply cant get away with that due to reputational risk and the fact that most lenders (if not all) predicate their lending on fixed price contracts. If you go the route of your own engineering and get three builders to quote, the risk of this happening is probably higher unless you're using a reputable custom builder. Now that that's out of the way; The general process is you sign that first piece of paper showing intention to use that builder. They'll usually take a small deposit of around 1-5k. This is usually non refundable. Most are doing around the 1-2k mark. That covers the costs of the work to come - i.e. all the communication, sales persons time, and usually a soil test etc. The soil test is so that they can provide an estimate for siteworks as part of your contracts. If you don't have 1-2k to spend at this time, youre in for a rude shock for the rest of your build. There's all sorts of costs that will pop up around the land transaction and conveyancing, inspections etc you haven't yet considered. A note on siteworks - The builder usually over estimates so the risk of getting some unforeseen extra charge related to siteworks is unlikely once they've done the estimate for fixed siteworks costs. Depending on your site, build and builder, these could be 5-80K (or more). You can get an idea of the site costs for the ear buy speaking to existing residents of the area you're building in or asking the builder what their costs have been in the area. Most flat blocks in new estates, with no prior construction are pretty simple and come with engineering notes from developers that give some indication of what's been encountered while building the roads and services (rocks, type of soil etc). SO that including your soil test on the block result in an estimate that can be pretty safe to be considered fixed, if they are labeled as "fixed". As a guide. 10-20k is standard on most greenfield estates in Melbourne. Don't agree to a provisional sum for siteworks as a newbie. You simply dont know enough about what to do or how to challenge the costs if they do get all used up or more is needed. The next stages should include a much more detailed breakdown of things you will want - structural changes, big ticket items etc. If you're well prepared i.e. you know their range of upgrades, you can specify these at this point. You will likely have to provide a provisional sum for your colour/studio session, electrical and cooling. These will all form a base figure that you will have to use in sessions that happen generally well after contracts are signed. It's in those sessions that you can either over spend or under spend and get a refund. This is perhaps the stage that you need to be most aware of being a possible way to blow out your "fixed price" contract. Unless you fall on exactly the dollar amount of those preliminary works, variations to the contract are created and the final costs drawn up. Be aware when you sign the contract, you will be expected to pay around 5% of the contract value as a further deposit. Most standard contracts will have a finance clause that could see a subjective "unused" portion of that 5% returned if you don't get finance. If you decide to cancel (i.e. not because of failed finance) after signing you could lose the whole 5%. Depending on how fast this all happens, you could have this before you go to the bank with a fixed price contract. If the lender has given unconditional approval for a specific amount before these sessions, anything that goes over the contract price will have to be covered by you before the lender even makes the first payment to the builder. If you come under, you will get the extra funds back after the final payment when you settle with the builder. These surplus funds are nice. so couple of things to consider
Good luck with your journey. It can be fun if you let it and don't allow yourself to be walked on. Don't get emotionally invested into it either, hard I know, but the moment you are, your decision making in the process loses objectivity. Dark matter scientist, can breathe underwater, mind reader and can freeze matter just by willing it. Trust me, its in my sig. Re: Builder has not included details and wants signatures 9Apr 24, 2022 8:41 pm dfhtw13 My contract is not fixed price and my lender is refusing to even look at it. Is this normal behaviour for lenders. Thanks At the moment, in current market conditions? Yep Also assuming you have low deposit/high LVR. Dark matter scientist, can breathe underwater, mind reader and can freeze matter just by willing it. Trust me, its in my sig. Hi All, This is our second home build and first time with a custom builder. They are small builder and have built some houses with good quality. They tender and color… 0 300 I work with owner, he/she is my man on the ground and I instruct them when to visit the site and take photos and I have other tools in the bag. 4 15276 hey there! 😊 so, it’s kinda common for standard drawer depths to be around 500mm since most cabinets use this size to fit the usual runners… 3 20911 |