PPOR buiilder - negotiate price

T

toony

I am looking at building a PPOR with a project builder like Metricon. They say the Nolan 41sqs has a base price of $280k.

Before i start negotiations, can i tell them i will not proceed unless the base price is reduced by say 10%. Is this normal practice?

I get the impression, these builders suck you in by making sure you select the home you want, then they know you've got an emotional connection and can charge accordingly.

Should i design my own home, get plans drawn up, then get 4 quotes to have it built.

Any advice appreciated?
 
toony said:
Before i start negotiations, can i tell them i will not proceed unless the base price is reduced by say 10%.
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You can tell 'em what you want. Just the same way they can tell you to please shut the door on your way out :p

toony said:
Is this normal practice?
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What's normal? I'm sure they've heard it all before.

toony said:
Should i design my own home, get plans drawn up, then get 4 quotes to have it built.
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It will cost you more. But sure - if you want.
 
Hiya

There isnt a lot of negotiability with most project builders. the margins are reasonable and not outrageous. Commercial reality sees to that.


and usually doing your own gig is much more exxy per sq m than a project home.

ta
rolf
 
toony said:
I am looking at building a PPOR with a project builder like Metricon. They say the Nolan 41sqs has a base price of $280k.

Before i start negotiations, can i tell them i will not proceed unless the base price is reduced by say 10%. Is this normal practice?

Any advice appreciated?
Click to expand...

You could try it on. You could also try it and add how you'll build the kitchen, tile the non wet areas, do the painting and landscaping and fencing (and forego the warranty on that work.) Though might effect your loan and progress payment schedule.
 
toony said:
Nolan 41sqs has a base price of $280k.
Before i start negotiations, can i tell them i will not proceed unless the base price is reduced by say 10%. ?
Click to expand...

These companies have all their prices locked in to their computer software,
I believe it will be impossible to get it cheaper unless you go for the lesser options.
I haven't used Metricon personally,so I don't know their homes.

The $280K that you speak of will have loads of extras attached to it,possibly bringing it around the $350K on final contract price ,this mainly depends if you get personally involved or not.
 
I'm with the others; their margins are very tight, and if you were able to negotiate *any* discount (which I doubt), then it's not going to be anywhere near 10%, I wouldn't think. Some of them have margins less than that. :eek:
 
One of my family members was in sales for a project home builder.

They normally have fixed prices to work off and there quotes are normally fairly tight.

However he did always have a percentaged factored in on top for:

A: Buffer factor for any estimates taken into account

B: Room to negotiate prices to get customer to sign contract by passing on discount or adding extra into the deal (eg. if you sign today we will put in aircon).

I think 10 % will be a bit on the high side. No harm in asking (Not too sure about demanding one :)) for a discount I think you willl need to end up along the lines of a 3 - 5 % discount.

Cheers,

Fourex.
 
Thanks for your comments. I have never built before. I have bought investment properties and cars and have always negiotated a price. I was wondering if this was also the practice with Project builders.

I intend to sell my PPOR and a 2 bed unit to build on a nice block of land that has an old house on it. I bought the block 3 yrs ago on a 100% loan.

I do like the look of the Metricon homes that i have seen. Its all the extras that are daunting. (site costs, facade, extra fitouts, evapourative cooling, swimming pool, cabana, landscaping, curtains etc)
 
building is a BIG learning curve (one I am going through at the moment).

My advice at the moment is to go through an inclusions list and get VERY specific. Even to the point of making all the choices for things like tiles and DEFINITELY kitchen and bathroom layout, before entering into negotiations with builders (that way you should also have an idea of what it is going to cost you before you ask them).

Our buiolder has been a bit sneaky changing plans after contracts, so it is cheaper / easier for him, and then our allowances which should have been OK, he seems to be charging a 20% surcharge on all the 'outsourced' work (ie, tiles, carpets and kitchen).

Oh well live and learn and make different mistakes next time.
 
rugrat said:
he seems to be charging a 20% surcharge on all the 'outsourced' work (ie, tiles, carpets and kitchen).
Click to expand...
It is called builder's margin, and while 20% is a little steep he is entitled to make something out of organising and dealing with these other trades.

Tools
 
hey bc

1970s for metric measures

When I came here from a country with metric measures I had some small trouble with the cubits used.

But funny enough my imperial teachers had trouble with the metrics and needed help from the 10 year old kid :)

ta
rolf
 
We built a house with a project builder - there was no/nada/nill neg on price at contract - they would not have it - not even if they went over time would they pay us more than $60 a day ! I tried - there is no give at this stage. But where we saved money was to neg with the trades at build time to put in extra lights and taps ect and they usually charged the same as what they charged the builder - it was well under the price if I was to get someone in.

But bottom line - project homes are generally cheaper to build provided you don't have many variations to the plan - change the plan a fair bit you are over the price of a custom home.
 
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