The Secret To Avoiding Costly Variations

by Ryan Stannard | December 5, 2020

Are you concerned your build will turn out to be a budget blowing horror story? 

Whether you’ve built before or know someone who has, we’ve all heard tales of escalating costs as the variations mount up. These changes or additions all lead to the original budget going out of the window, leaving you to find extra cash to get your house built.

Whilst some people believe that variations are inevitable, if you and your builder invest time upfront, you can avoid costly budget changes. By taking the time to get into the details of exactly what you want and completing the necessary research and reports, you will be able to guarantee a fixed price before you sign the contract.

Not only will this ensure the price you agree is the price you pay, but you will be confident when signing the contract that there won’t be any nasty surprises.

Invest Time With Your Builder

With finance experts, Canstar, identifying that budget blowouts can be attributed to modifications during the build, it’s important builders invest time to ensure they capture exactly what you want so that it’s included in the contract.

At the same time, you should also pay close attention to the details of what is or isn’t part of the preliminary agreement. As once the contract is signed, any modifications or additions will incur additional fees you haven’t accounted for. 

When builders don’t allow you the time to invest in evaluating and making decisions that are key to your build, it is unlikely to end well. 

The Secret To Avoiding Costly VariationsA professional builder, on the other hand, will encourage you to itemise everything you want for your new home. And if there are areas you aren’t sure about, their detailed standard inclusions list will clearly define what will be used to finish your home. Armed with a detailed preliminary services agreement, you will then be confident that the only way the price will change, is if you change your mind.

Do Your Research

To reach this point, you do, however, need to spend time researching and reviewing the finer details, so you clearly understand what is and isn’t included in the contract.

All too often, the people who get hit with variation charges, are those who have been too busy to be able to put time into pre-contract planning. Whether you know someone who has built a new house or this is your second, third or even fourth new home, you may get the impression that variations are completely normal.

Don’t be fooled by this myth, as this is used by some builders to encourage you into signing what appears to be a cheaper contract. It’s only when the build starts and variations begin cropping up, that the ‘cheap’ builder turns into the most expensive option you could have chosen.

To help you avoid variation after variation, I’ve put together my top three tips.

Check The Facts

The first tip is to make sure there is an adequate cost for the footings of your build. 

The only way a builder can do this is by completing a soil report so they can prepare an accurate quote. In fact, for complete confidence, you should ensure that the engineer’s report has been submitted prior to signing the contract.

Some builders sadly, will give you an artificially low footings allowance to get you to sign the contract, and then complete the tests afterwards. This will likely result in a variation and a hike in the price of the build before work has even commenced.

Allow Time For Preparation 

The Secret To Avoiding Costly VariationsThe next tip is to make sure you invest enough time researching and planning before the contract is signed. That way, both you and your builder will know exactly what you want, and you can be certain it’s all been allowed for from the word go.

A simple change can incur additional labour and material charges, but it may also impact the overall design or structure. This would mean you’d need to have your plans redrafted or your contract reissued. And those charges soon mount up. But if you take your time to plan, a professional builder will happily provide you with a detailed preliminary services agreement, so you’ll know exactly what you’re getting.

Let Your Builder Know If You Change Your Mind

Finally, in the event you do change your mind, try to give as much notice as possible to avoid delays and minimise costs. Whilst the change may be as simple as swapping out tiles, if there is an extended lead time on receiving the materials, it may extend your build time.

If the build is delayed, you’re not only being hit with variation charges, but you will also end up paying more for rent or have to make additional mortgage payments while your home is being built.

It doesn’t matter if you are building your first home or if you have built many times before, there are so many misconceptions. Download our quick guide that contains everything you need to know before designing your new home.

It’s completely free, and it will help you to keep your design on budget and avoid any nasty surprises that can sneak up on you when building a custom home.

Just click on the link below to download our guide on The 7 Things You Must Know Before Designing A New Home.

Download Our Free Guide For Building In Adelaide