7/23/23, 10:38 AM What to consider before paying a builder |

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paying a builder
 July 13, 2023 |  0 Comment Search

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To start the process with a builder doesn’t require any upfront Recent
payment but after the initial estimates are given you will need to
put down a deposit. Posts
Go through Choosing a Builder to get more details on how to New Home Windows
narrow down your list of builders and see which ones might be
suitable for you. What to consider before

Budget and Builder Costs paying a builder

Consider first that the builders estimate doesnt include many

Comparing Pricing of
things you will add later or realistic site costs. Its best to do some
research and narrow down a handful of builders before putting
Tenders against other
down a deposit. Take a look through Comparing Pricing for
Tenders. You can fill out the estimates for your house and this will
help ensure you have a more accurate estimate for comparing. Builders

Its also worth going through How to save on costs before paying Builder Margin and
the builder anything.
Markup with Calculators
Finance
Demolishing a house
Before signing any tender make sure you have pre-approval
from your bank to borrow what you need for the build. You will
likely spend a lot more during selections and for surprise costs so
make sure you have a good buffer. With interest rate rises you
also need to factor this in, what happens if they increase by 2-3%
before you get approvals to build.
Recent
Price Lock In Period Comments
Most people don’t realise that price lock in periods starts from
Justin on New Home
Windows
the initial tender date. So when you ask for an updated tender
and there’s delays just know that your clock has started ticking.
You can negotiate the date though.
Margot on New Home
DA approvals can take over 6-8 months with many council and it Windows
can take you a few months to get to a stage where you can
submit your plans for approval. This will eat into your price lock
period so be aware that builders can easily hit you with a 10-20%
increase after this period. Given the trade and material Anonymous on
shortages in 2022 prices are rocketing up every month and Checking Your House
builders can’t absorb all these increases.
Plans & How to
Correctly Read Them

Contour Survey, Borehole Test

and Other Property Reports Soundproofing on
To get a tender, which is mostly a fixed price contract, the builder Soundproofing your
House
will need to arrange for a contour survey of your land and a
borehole test. More details about these are below. They may also
want your 10.7 document for your property which lists restrictions
like a bushfire zone, flood zone and if it’s noise affected (ANEF). Peter on Tips for an
Efficient Build Design
If you are tendering with multiple builders there’s no need to
repeat these costly surveys and the builders may accept
previous ones you’ve done to reduce the deposit required but
not all will agree to this.

If you are doing this through the builder for the first time, ask
them if you can get a copy of the .dwg file and the report. The

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7/23/23, 10:38 AM What to consider before paying a builder |
.dwg file is used by the draftsman to include that in their plans
and without these they cant do this. If they wont supply this, then
you may want to engage the surveyor directly and pay for this
upfront and as its the same company the builder uses, then they
may be willing to use them. Alternatively you can pay the
surveyor afterwards for a copy as they wont need to repeat it.

The borehole test will determine the type of slab required eg. M
class, H class. It will also tell the salinity of the soil and if you
require further treatment to your slab for this.

Contour Survey
This is what a contour survey looks like

Contract Review
Before putting any money down with a builder or at least if you
are just up to the tender stage you will have the most power at
this stage to negotiate your contract. In most cases with volume
builders the builder wont amend their clauses however now is a
great time to go through their standard contracts that they
would issue after paying the 5% or 10% deposit.

By the time you normally get to this stage you would have
invested months of effort with the builder and if you dont like the
contract terms you have to start all over and price increases
could have occurred during this time.

So ask the builder before paying anything significant for all their
contracts so that you can try negotiate items you arent
comfortable with or at least you will understand the risks
involved.

In my case I paid the tender and before paying the 5% I asked for
the contracts. I was issued with a Works Agreement which covers
all the reports and DA/CDC submission. After this stage I would
then be issued with a HIA contract.

Liquidated Damages
Negotiate this early when you have leverage. If this is done after
giving a large deposit of more than 1-2% then your leverage is
gone and you will likely have a tough time changing this. Ideally
you would agree to this at the sales stage because this is where
you will be told about unrealistic timeframes and this will help
prevent this happening.

A good amount would be over $100 per day. Many builders would
put $1 by leaving it out and gives them no incentive to complete
the job in time.

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