Turn-key package contract

[dink]

Hi all

I'm looking to get a turn-key package as my PPOR. The house is yet to be constructed and I'm looking to cover myself with escape clauses in the contract.

I know of the usual 'subject to finance' but would 'building and pest' apply?

A home is currently being built next to the lot I am looking at - would I need to perform a soil test and insert a 'subject to soil test' clause?

Thanks and sorry if they're noob questions

 

[Philip Thomas]

Is what you are buying a vacant lot & the vendor is then offering a separate building package? (i.e. two contracts).

Or is it a House and land package?

 

[dink]

It's a house and land package.

I have seen other lots (and house plans) in the estate and asked if a different house design could be built on the lot I am considering. The builder has agreed via REA verbally that this is possible but will be a slight change to the package price. I am currently awaiting the revised price in writing.

Once I receive the revised price, I will negotiate with the builder on the house modification - tiles, water tank, etc. When I am satisfied with the final package price, I will proceed with the contract.

 

[Minx]

Hi all

I'm looking to get a turn-key package as my PPOR. The house is yet to be constructed and I'm looking to cover myself with escape clauses in the contract.

I know of the usual 'subject to finance' but would 'building and pest' apply?

A home is currently being built next to the lot I am looking at - would I need to perform a soil test and insert a 'subject to soil test' clause?

Thanks and sorry if they're noob questions

In regards to the subject to soil test what will you be subjecting the soil test to exactly?
Builders already know what the costs are for foundations when it comes to H&L packages. Builders handpick the blocks they want, there usually is a reason for that. Site costs tend to be fixed with H&L packages, you should ask otherwise you are adding a clause for nothing.

The contracts tend to be your standard HIA ones. Is it a project builder (major builder) or a custom/spec (smaller builder)? You have mentioned that they have various designs in the estate which leads me to believe that the builder is a project builder.
Generally houses from H&L packages tend to include "standard' inclusions. Upgrades or additional items will cost you. From those that have built with project builders I have heard that they give you the price for upgrades and you accept if you like it and reject if you don't. From what I hear, negotiations off the price for upgrades are slim to none.
Remember anything additional or upgraded will include standard builders mark up (20%).
Building a PPOR is very exciting, I have just about completed mine. For us, my partner is a builder and we got everything at cost so saved a fair bit there in comparasin to getting a custom builder to build it.

Best of luck

 

[rugrat]

You will often find with H&L packages (particularly those with a long settlement) that a 'subject to finance' clause will not be accepted.

 

[dink]

In regards to the subject to soil test what will you be subjecting the soil test to exactly?
Builders already know what the costs are for foundations when it comes to H&L packages. Builders handpick the blocks they want, there usually is a reason for that. Site costs tend to be fixed with H&L packages, you should ask otherwise you are adding a clause for nothing.

Yeah that's what I thought. I got the specifications yesterday and soil test is already included

The contracts tend to be your standard HIA ones. Is it a project builder (major builder) or a custom/spec (smaller builder)? You have mentioned that they have various designs in the estate which leads me to believe that the builder is a project builder.
Generally houses from H&L packages tend to include "standard' inclusions. Upgrades or additional items will cost you. From those that have built with project builders I have heard that they give you the price for upgrades and you accept if you like it and reject if you don't. From what I hear, negotiations off the price for upgrades are slim to none.
Remember anything additional or upgraded will include standard builders mark up (20%).
Building a PPOR is very exciting, I have just about completed mine. For us, my partner is a builder and we got everything at cost so saved a fair bit there in comparasin to getting a custom builder to build it.

Best of luck

There are four different builders in this estate and all offering different designs on their allocated lots.

I thought there would be no chance of negotiation as their price was to the dollar. I also expected the builders to mark up for additions but I guess you pay for convenience.

 

[dink]

You will often find with H&L packages (particularly those with a long settlement) that a 'subject to finance' clause will not be accepted.

Would there be any clause I can cover myself with?

 

[rugrat]

Would there be any clause I can cover myself with?

I don't know - You can always try and sneak the finance clause in, they 'might' let you. If you come up with any other solution let me know, I am still haggling over the contract for a H&L package like yours myself - will sign soon hopefully (once we stop playing tag on terms we want changed and inclusions). Our PPOR was also a H&L package with a long settlement and it had on the contract a subject to finance clause, giving us a 21day leyway to get out - but again was pretty useless as actual settlement was over 12months away, so we couldn't actually get finance that far in advance.

 

[Minx]

I think that H&L packages are great for keeping costs down.
An example is that a relative of mine bought a block in a new estate. It has a 4 meter fall so project builders wouldn't touch it unless there were dirty big retaining walls and the estimated site costs based on soil report was a bit of coin also.
The alternative, most practicle and best idea was building a house with a sub floor. Due to the slope the design ended up being 40 squares and around 15 of it could of been fitted out at a later date.
We priced it up and estimated the house to cost almost 500k and that was based on the high level of finish that they wanted.
Due to she slope of the block it had to be a split level and had to be that size for it to work.
Other builders did cost it roughly the same also.

They ended up buying a new block H&L. The total cost came in way under than what the original house was to cost alone.
It is their first home so probably a better idea to go H&L.
Moral of the story, builders don't hand pick hard blocks.
Blocks with a view will cost you some sweet coin.

Advice, get what you can afford. The lovely display homes do make you want, want but they do cost.
Ask for the upgrade pricelist. You don't want to be going to contract meetings or tender if you can't afford it.

 

[Propertunity]

Project home builders has 'standard' house designs for a reason. They negotiate the prices with suppliers and sub-contractors well in advance.

If you want to build the standard thing - no issues. They literally push a button on sale and all the orders and sub-contract orders spit out their printer/fax machine/email.

If you want a change, it is a major hassle in this process - which is why you get slugged for it. They are sausage factories. You want to change the ingredients the production line stops, all sorts of changes need to be made, and then it starts again and the pieces don't fit. The tiler has a spak attack and wants more money for 'these' tiles. The kitchen cupboards need to be changed for that 'wall oven' etc. which then affects the tiler and so on down the line.

I know, I used to sell them the software to do all this for 15+ years. If you want cheap and mass produced then get a project home and change nothing. If you want unique, hire a specialist builder who will cop all this stuff and who charges accordingly.

There are no escape clauses for any project home builder worth his salt. He has been 'done over' so many times by customers, if he has any business sense, he has every protection in place to protect himself and every opportunity to charge you for even 'thinking' about changing anything.