Stroud Homes Wagga Wagga – Fixed Price Contract
Making the decision to build your dream home is exciting, but can also be costly and you need to budget for all variables.
With the banks imposing tighter credit conditions this year, it is vital to be able to secure your budget when building a new home.
A Fixed Price Contract is then helpful as the price remains fixed, no matter how long it takes to build the home, or how much any required materials cost.
We chat to Stroud Homes Wagga Wagga Sales Manager Mariah Foley about the basics of a fixed price contract when building with them.
This is the most common form of building agreement. We use the standard Housing Industry Association (HIA) contract, and drafts are always sent out prior to contract signing so that you can seek advice by a solicitor or other parties.
This also allows you to read through your contract and ask any questions prior or on the day of contract signing.
The fixed sum provides both ourselves and our customers with a degree of certainty and with a few clauses, which are rarely required, for unforeseen circumstances of site conditions, e.g. if major rock removal is required once the foundations have been dug, or the site changes conditions under severe weather event etc.
Aside from this, we provide a price with all of the preliminary results for your land – known and quoted for.
Preliminary testing includes contours (slope of your land), soil type, wind ratings, and may uncover other issues to investigate (flood, acoustics, bush fire rating).
Essentially it includes all things that determine the engineering or materials required to build your home.
A full preliminary fee also covers preliminary drawings of your proposed design based on the information, which ensures correct orientation, and that all known council requirements or estate covenants have been considered too.
The preliminary fee will then be deducted from your 5% deposit at contract stage. It is quite a personalised process to get the design you want onto your land with all of the boxes ticked.
Often, to get a pre-approval from the bank to move forward with your building project will require a copy of a Fixed Price Contract.
Almost anyone can provide a quote to you that has a ‘subject to’ clause, but this won’t cover the TRUE cost of things, such as knowing soil types and much more vital preliminary information which needs to be collected in order to provide the most accurate cost.
When entering a Preliminary Agreement with us however, we will get the information needed to give you the Fixed Price Contract you require.
Guesswork is not recommended as you might find out later that tens of thousands worth of extras are required due to earth works or reactive soils, for example.
Instead, start off with ALL the information included in this small Preliminary Deposit, consider your approved finance limit, and then you can start your plan to move forward more securely.
A PC item is an amount of money included in a contract sum to purchase a specified item such as tiles, taps, doors or bathroom fittings. An agreed estimated amount is included at contract signing even if the specific products are not selected until a later stage.
A provisional sum (PS) is an amount of money included in the contract sum to cover the extent of work or materials, or both, which cannot be specifically detailed when entering a contract. Typically, builders will include a PS for sitework costs.
We believe, wherever possible, PC sums should be avoided. We also believe that there are some builders that, unfortunately, use these PC and PS sums to up the price later or just find it too hard to get quotes for all of the things required if it is out of the standard easy build category.
At Stroud Homes Wagga Wagga, we take the time to do the opposite. We encourage you to read your contract thoroughly and question any unknown prices or PC sums. We advise you to simply not use any builder unwilling to take the time to get all of the prices needed!
There is always the small risk of hitting rock once site prep commences, unfortunately this cannot always be 100% tested for on an entire block.
Variations are allowed during the construction process, however can be inevitably costly to both the customer and the builder.
A variation must be in writing and signed by or on behalf of the builder and the owner.
Due to our extensive testing, all site works will be accounted for prior to signing a fixed price contract. In our day to day dealings with customers, we have the opportunity to learn about our competitors proposals.
We have become aware of several competitors who we believe are under-pricing their initial house price by up to $40,000, then later overpricing the site costs by the same amount.
From what we have learned, the overpriced site costs are presented on the day when the contract is to be signed at the builders office.
We have learned about this practice from a few cases where the customers have had the courage to walk out without signing and eventually made their way to speak with Stroud Homes Wagga Wagga where we provide site cost inclusive quoting.
NO! A client is not locked into anything once they sign a preliminary agreement, we understand that circumstances change due to various reasons.
All test results are yours, and until the HIA Building Contract is signed, your choice of builder is open.