Almost everyone has a budget for their new home. It typically goes something like this: “If I sell my current home for this much, and the bank has said I can borrow this much, then my budget is this much.”

Next comes the wish list, followed by the realization that the budget won’t cover it all. “No problem! We’ll get creative and come up with a few unique ideas that are bound to be cheaper. Surely, no one else has thought of these! What do you mean those ideas won’t work or will make the house more expensive?”

“Oh well, we can always save as we go.”

In my experience, the single biggest cause of stress in building isn’t all the building issues—such as weather delays, material shortages, or plans being misread. The real source of stress is when the budget runs out.

Getting the budget right means less stress and more enjoyment of the building process. To get it right, you need to have a realistic budget from the start. This means understanding what’s included in your contract, accounting for potential extra costs, and being aware of additional expenses you might incur during the building process that you wouldn’t normally have.

Understanding Fixed Price Contracts

If you’re borrowing from the bank, there’s a good chance they’ll require your builder to offer a fixed price contract. This means the cost of your project is set and won’t change, unless you request changes or variations—which can be costly.

However, we’ve seen many disputes between builders and owners over fixed price contracts. Often, this happens because what’s included or excluded from the fixed price isn’t clearly outlined, or the allowances in the contract are unrealistic. When final costs are determined, these allowances can cause confusion and lead to additional charges.

For example, your contract might include an allowance of $100,000 for your kitchen, but if the kitchen ends up costing $120,000, you’ll need to pay the extra $20,000 on top of the contract price. To avoid this, make sure that any allowances in your contract reflect the true value of the items, before you sign.

Allowances aren’t just about money.we’ve seen contracts where a driveway allowance covers 40m² of concrete, only for the owner to discover their driveway needs 80m². These discrepancies can lead to higher-than-expected costs, so it’s crucial to ensure that allowances are realistic.

Planning for Extra Costs

When budgeting for your build, be sure to consider any additional costs you may face that wouldn’t occur if you weren’t building. These costs can include:

• Disconnection and reconnection fees for power, phone, or gas.
• Extra fuel costs if your new home is far from your current location.
• Accommodation costs if you’re renting while paying for the mortgage on your new home. Don’t forget to factor in a few extra weeks of rental costs in case the construction is delayed.

There’s a lot to think about, but getting your budget right from the beginning means you won’t be surprised later on. Once the finances are sorted, you can enjoy the process of watching your new home come to life.

TIPS AND ADVICE

• Set a realistic building budget.
• Ensure you understand what’s included in your building contract and what isn’t.
• Make sure allowances in your contract are realistic.
• Budget for additional costs you wouldn’t have if you weren’t building.

At B&D Homes Group Pty Ltd, we take the guesswork out of your construction budget. We provide a comprehensive written Master Builder contract, with no grey areas or potential disputes. Our contracts include a detailed quote, payment schedule, and a 7-Year Master Builder’s Guarantee, covering everything from loss of deposit to workmanship, structural cover, and completion cover.

We believe that you shouldn’t experience any surprises during the building process—especially financial ones. That’s why our Fixed Price Contract is exactly what it sounds like: a genuine fixed price. Unlike many other contracts, we don’t include allowances that are often inaccurate or misrepresent the true cost (unless you specifically request an allowance and agree that it’s a realistic value). With our Fixed Price Contract, the cost of your home won’t change unless you decide to make changes.

Contact us today to book your free consultation and site visit. Let’s meet, walk your block together, and start designing a home that brings your dream to life. It’s the first step — so let’s take it today!