Price, Price, Price – Budgets & Avoiding Hidden Costs
When building a new home there are so many factors that you will be compared to determine which builder and design are right for you. At the end of the day, the most deciding factor will be the price. You can compromise on just about everything else but you just can’t spend more than you can afford.
The most common home building horror story is that there are so many hidden costs. That doesn’t have to be the case! The best way to avoid any nasty surprises is to get educated. You have to go into the process knowing:
- What your budget limitations are, and
- All the right information to help you make educated and informed comparisons and decisions.
What is the max price you can afford?
Knowing your limitations is the most important thing (aside from standing strongly by them!). The first question every sales consultant and associate will ask you is “What is your budget?” To help them help you, you need to be able to answer this question.
There is no point looking at designs of homes that are out of your reach. It will only leave you feeling disappointed. Knowing your max price will also help you understand what you can buy for your budget. This may lead to a realisation that you’re just not in a position to build your ‘dream home’ just yet but will allow you to make informed decisions about the process. Whether you delay the project or make some compromises – it helps you stay in control.
Know the different types of prices!
The second thing you notice when entering the home building journey is all of the jargon the sales people use. If you know what these terms mean you will understand the prices you are getting and foresee any potential hidden costs.
What is a Base Price?
Almost every single builder will give you a base price. In most cases, it is impossible to build a home for its base price.
There is a trend in the building industry to create these fictional ‘base prices’ that only include bits and pieces of what is actually required to build the home. No two builders include exactly the same things in their ‘base price’. Worst of all, most ‘base prices’ exclude some of the essential times including:
- Site Costs – This is required to prepare the land before the home to be built on top. Exact site costs vary from site to site but there are certain items that are unavoidable and should be considered regardless of where you are building. Site fencing, bins, temporary toilets, rubbish removal, temporary driveways… these are all costs that you cannot avoid but are often not included in the base price.
- BASIX – This is the energy efficiency rating of your new home. Complying with minimum BASIX scores is compulsory in NSW. It’s a list of simple measures to include in your new home but these are often left out of the base price to make it look cheaper (even though you’ll need to add them on anyway).
Another factor that makes base prices incomparable are the inclusions. Every builder provides different quality products and finishes. Look through these inclusions thoroughly! Whether it is a kitchen tap, laundry cabinet, floor coverings, or even wardrobes… ensure that you are comparing apples with apples. There is no use going with the cheapest price if your carpet, tiles, and wardrobes have been left out of the base price.
Don’t fall for ‘Price Per SQM’
It is really difficult to tell what items the builder has included in their price per SQM calculation. There is no way to know what quality, inclusions and finishes have been considered.
Know the inclusions you are comparing
It is important to not just compare the prices that you are being given by different builders. Price is important but at the end of the day, you need to know what you are getting. Ensure that you are getting as many inclusions information as possible from each builder. Don’t just check what has been included but also compare the quality of the items they are providing.
The quality of the different appliances, fittings, doors, and even selection of included bricks will make a difference later in the building process. Pay close attention to the things that will be finalised at your colour selections. If you have a particular brick or roof colour, or if you would like a specific looking front door, ensure these items are included from the beginning to avoid disappointment or extra cost later down the track.