Browse Forums Building A New House 1 Oct 22, 2009 9:32 am Hi everyone, If someone has similar experience, please share your knowledge. At end of last year I signed contract for land and building, and finally land settlement is going to happen soon(half of year delay). I signed contract with builder in beginning of year and paid deposit. However, yesterday I received e-mail from builder asking for pay some more money (over contract sum) as prices have been increased. Did anybody met such situation? Thanks Re: Builder is increasing price 2Oct 22, 2009 9:50 am We purchased land in June 09 and are still waiting for settlement (probably end of Dec or Jan next year) and put a deposit of $500 when we decided which house we were going to build - I was told by our sales consultant that the $500 holding deposit was to be paid to guard against any price increases in the future (which since June has gone up twice and we have not been asked to pay the new price. I hope this continues as I was thinking the same thing, when land takes sooooo long to settle, does the builder have a right to ask for more money because of price increases. Site Start: 10th September, 2010 PCI : Friday 27th January, 2011. Handover: 3rd February, 2011 Build Thread: viewtopic.php?f=31&t=37677 Re: Builder is increasing price 3Oct 22, 2009 10:05 am I'd say there would be a clause in your contract that will specifiy whether or not they've retained the right to do this. I would have expected a holding deposit to be just that, but if they've spelled out that they could then I'm not surprised that they are! Maybe give them a call and have a chat with them, you might be able to neg the price increase down a little! Good Luck! ~W~ Building our forever home - Lilium Estate Clyde - Land due May 2019 Built our first home - Pakenham - 2011 Re: Builder is increasing price 4Oct 22, 2009 10:12 am When i first went looking and speaking with my builder (aussie living), the salesguy actually warned me that there would be a price increase happening soon, and that if i wanted to lock in the cheaper price i'd have to sign contracts before the price rise came into effect. viewtopic.php?f=31&t=22766 - my build thread! Time waits for no man. Unless that man is Chuck Norris. Re: Builder is increasing price 5Oct 22, 2009 1:44 pm I'm building with big M. When I paid the deposit I was asked to sign a agreement witch include a clause: i. Between 150 and 365 days from deposit, an increase of 0.5% of the total contract value will be applied per month or part thereof. ii. After 12 months from initial deposit, the New Home Contract price will be reviewed and prepared based on prices applicable at the time the revised New Home Contract is prepared. - M3tr0con - Byron 32 - Californian facade Re: Builder is increasing price 6Oct 22, 2009 3:07 pm Had the same with Clarendon. Signed the tender in November'08 and they were able to extend the tender for me a few times however in July'09 they increased the price by $3000 that was not that bad -- the base price for the building (on the web site) increased much more (from 236 to 248 I believe) ... built a Promenade with Clarendon. viewtopic.php?f=31&t=25104 20-10-09 - excavation and piering completed ... 12-04-10 - Basins fixed. Connecting to the electrical grid 23-04-10 - PCI 07-05-10 - HANDOVER! Re: Builder is increasing price 7Oct 22, 2009 5:40 pm Most builders have a clause to protect themselves against long delays. Imagine that you were able to lock into a price for a token deposit. Then let's say there were long delays with your land, your permits and some mucking around changing your mind about floor plans, so you didn't start building till three years down the track.... The builder's profit would be decreased due to increased cost of materials and trades etc. The delays aren't their fault, so it's not right that they should be disadvantaged. Signing a contract doesn't let you off the hook. Ours specified that the price quoted was subject to a site start by X date and that if construction began after that date, might be subject to an increase. Our land settlement was delayed, but lucky for us the price rise was only $1000. Re: Builder is increasing price 8Oct 22, 2009 6:24 pm My understanding is that the Tender/Deposit "contract" price (ie. not the final and binding Building Contract) is firmly fixed until a certain date (which is clearly written into your Tender document). Our builder also stated the conditions which could cause a price increase (eg. an increase in base house price) - but, as anything, this is always at their discretion. Re: Builder is increasing price 9Nov 20, 2014 5:49 pm I am very confused about this tender contract. By signing it off and put down the deposit doesn't seem to protect the buyer but the builder. I was under the impression that if we signed that sign-up contract, the price is fixed unless we make further changes. What is the point of having that tender contract while the builder can just increase the price? No doubt, the land title has been delayed but it is only by few months! I knew the price increases every Nov and I was worried the builder is going to play this kind of trick so I asked for a final contract before the land is titled but the builder declined. Now, bam....we are told that they send the plan for re-costing and it is now cost more to build the same floorplan. Did I miss something about the benefit of this tender contract? Timeline: viewtopic.php?f=31&t=76782 Re: Builder is increasing price 10Nov 20, 2014 5:55 pm Talk to them first - but our contract was based on no increases beyond the allowances in the contract - ie we knew the max figures involved. We came in under on most of the "allowances". Hi Mofflepop, I would recommend finding a building designer to prepare plans, they should design to your specified budget. The benefit is you can tender the project out… 9 20426 Wow I hadn't realised things had gotten that pricey in just a couple of years since I built, that is crazy with how much land is now costing if you aren't lucky enough to… 3 7135 |