Cost of footings- Sterling Homes

[bez23]

Hi all,

I am thinking of buying a house and land package with Sterling Homes. Everything is fixed price apart from footing. Land size a bit over 300 and build area around 120m2. They allowed $14000 for additional cost for footings on top of their normal footing allowance. Salesperson told me that they have built a lot in the area and usually footing comes back at 11-15k.

1) Just wondering if anyone build with them before and the footing went way above the estimate.

I'm going to put the offer subject to finance and satisfactory footing cost but if void the contract, I'll still lose the deposit of $1500.

2) If I get out of the contract, can I claim the $1500 in my taxes next year (since it's a lost due to a failed investment).

Cheers!

 

[Brady]

Hi all,

I am thinking of buying a house and land package with Sterling Homes. Everything is fixed price apart from footing. Land size a bit over 300 and build area around 120m2. They allowed $14000 for additional cost for footings on top of their normal footing allowance. Salesperson told me that they have built a lot in the area and usually footing comes back at 11-15k.

1) Just wondering if anyone build with them before and the footing went way above the estimate.

I'm going to put the offer subject to finance and satisfactory footing cost but if void the contract, I'll still lose the deposit of $1500.

2) If I get out of the contract, can I claim the $1500 in my taxes next year (since it's a lost due to a failed investment).

Cheers!

I've had a clients footings come back at $15k above the allowance. The client actual worked for a company that did footings, so he was able to negotiate it out of the contract and got it done himself.

Other times I've had it come in under and spot on...

 

[boods99]

2) If I get out of the contract, can I claim the $1500 in my taxes next year (since it's a lost due to a failed investment).

Cheers!

Bez23, it should be treated as a capital loss and will be off-set against any future capital gains. You won't be able to use it as a deduction against your taxable income.

Boods

 

[sports fan]

check the provisional sum clause in the contract. if standard mba/ hia contract from memory max cost overun on a proviosnal sum is 30%

 

[bez23]

Could you please explain the provisional sum?

Also I managed to get the builder to reduce the deposit to 1000 and ill pay the other 500 if I'm happy with the footing costs.

Cheers

 

[underdev]

Could you please explain the provisional sum?

Also I managed to get the builder to reduce the deposit to 1000 and ill pay the other 500 if I'm happy with the footing costs.

Cheers

I believe anyone buying land should get soil tests done as part of the DD process! It only cost $450 but could save 10's of thousands.

Don't let the builder force you into a contract before giving proper costing's. It is not how things should be done, its a trick and personally I am sick of how these project builders treat their customers.

 

[bez23]

Totally agree underdev.. But at least they are letting me do a subject to footing clause in the contract. Most I'd lose is 1000 but it is just stupid why they don't do the engineer report and and the 1000 to the final figure and fix the price.