One simple way to fix your building price upfront
One of the biggest problems I see when people consider building a home is becoming victims of dishonest and unethical marketing ploys. It goes something like this:
“Build your dream home from $xxxx”.
The idea of building a home for substantially less than we initially thought was possible is great, but how do we know this is the real cost? Too often we get lured into a false sense of security, sign on the dotted line, and experience blow out costs when it’s too late to do anything about it. These costs are known as PC items (provisional cost) in your building contract, which are nothing more than an estimate — more like a guestimate. The most common PC blowout item on a building contract is the structural footings.
A better way around this is to request a 100% fixed price upfront from your builder, also known as a turn key price. You can do this by engaging in the services of a structural engineer where they will physically test your soil and write a report stating the precise length and depth required for the structural footings. The testing and report will cost approximately $1200 but it takes away all the guess work and uncertainty of something that can potentially blow out to ridiculous proportions. This report, along with your plans, can then be presented to a number of builders to price it up on an even playing field.
I was unaware I could do this when I built my first home in 2005 and my building cost blew out by $10,000 because the PC item for structural footings was under estimated. Technically and by law the builder did nothing wrong because a PC item is subject to change whether we like it or not. Unfortunately all my chest beating and fist pumping gestures were in vain and I had no choice but to walk away with my tail between my legs.
This one piece of information will save you tens of thousands of dollars in unexpected ‘hidden’ extras. I always recommend getting a fixed price up front for peace of mind. I’d rather understand exactly how much I’m up for while I have the power to do something about it. This way, you can adjust things where necessary to stay within a desired budget.
