It’s important to understand the difference between the base price and final price of your new home. That way you can avoid being sucked in by tempting base prices only to find that you’ve significantly underestimated the additional costs associated.
Did you know it’s quite common for the final construction price to be 20 to 30 per cent above the quoted base price?
Here’s our rundown to avoid being duped by tricky pricing.
A base price for a new home is a flat rate price that includes a list of features considered standard by the builder, it will vary from builder to builder.
What your base price usually will not include is any provisional costs, site works, changes to the design, and optional upgrades.
This can become confusing when it comes to comparing house prices from builder to builder. More often than not each base price you receive will be different. This is because each builder will have their own list of features that they’ve deemed ‘standard’.
So, where does that 20 to 30 per cent price jump come from?
Unfortunately, there are various necessary costs associated with building your home which most builders add on later. From preparing your land for construction to adding upgrades – it can add up quickly.
For example, site costs are usually excluded from base pricing, as well as driveways, and sometimes even the flooring.
It can seem overwhelming trying to wrap your head around comparing different base prices. Fortunately, we have a few tips to make the process a little less daunting.
Create a ‘Wishlist’ of FeaturesBefore obtaining a quote from builders, draw up a ‘wishlist’ of features you want reflected in the price provided by builders. This will allow you receive a more realistic price that is more comparable from builder-to-builder.
Ensure Inclusions and Site Costs are QuotedIt’s a good idea to aim to obtain at least three quotes that include fixed site costs and standard inclusions. Not only can this help avoid getting stung by unexpected costs, but it will allow you to determine which builders are providing better bang-for-buck.
Don’t be Afraid to AskNo question is a dumb question when you have thousands of dollars riding on the outcome. Make sure you ask about any provisional costs that may be included. A provisional cost is an estimate that your builder will provide for a section of works that they can’t provide a definitive amount on until completion. The provisional cost will include both the materials and labour costs.
Don’t be Sold on Cost Per Square MetreIt may seem like an effective way to compare house costs, but square metre rates can be very deceptive. Some builders will include the bare minimum features under their inclusions to provide a cheaper and more attractive base rate. You may also risk compromising on quality which can cause further headaches down the track.