• Email info@buildinoz.com.au

choosing
your builder

by nat stevens

CASE STUDY – CUSTOM BUILDER

 

CUSTOM BUILT HOME

Working with a Custom Builder is a different experience to working with a Volume Builder.  This gives you a real life example of the process I've used myself personally.  Please be aware that every builder works differently and you can use this case study to give you an idea of what questions you should ask to ensure that you're happy with the builders individual process.

Please note that this case study does not include engaging the services of an architect.  This is for a home that would be considered comparable in design and value to a project built home using a volume/project builder.

The Process

I find an area I would like to build in.  I purchase (or put on hold) a block as per Module 3.  I explore floorplans I like from a range of online floorplans and create my own sketches to cut and paste elements from different ones I like.

I use my rules as per Module 2 to roughly sketch up a floorplan I like.  I take into consideration the dimensions of the block and any easements to know what dimensions my floorplan roughly need to stay within.

I create a Pintrest board of facades I like.

Armed with my pintrest board, my 'homemade' floorplan sketches and the plan of subdivision for my block, I visit a building designer or 'draftsperson' who will helps me refine my ideas and draw my floorplan to scale.  They take the block dimensions into account and offer up suggestions and ideas that I might not have thought of.  I let them know my budget despite knowing from my experience that there will be things that I will further refine with my builder later which will help us agree to a budget which the builder then needs to stick to.

My building designer works on creating a floorplan which we go back and forth on a few times until I am satisfied.

My building designer will then produce 'working drawings' which provide enough details for my builder to provide an accurate quote from.  (In most cases the plans get amended somewhat after I've engaged a builder, but more about that later).

I own my plans.

I give my plans to three builders to quote from.  I follow the process of obtaining quotes as per Module 2 Topic - How to get quotes from Builders.

Unlike project builders quotes, my builder will quote according to the working drawings.  They will quote according to the materials my building designer specifies in the plans (which can be changed later if I need to negotiate the home specifications to better suit my budget.  The most important thing is that each builder is quoting on the same specifications).

They will also take into account any site considerations when putting together my quote.

They will also share allowances they personally make for things such as curtains, flooring, appliances etc.  I use the quote comparison chart in Module 2 to compare apples with apples.  For example if one builder is quoting tiles at $30 per square metre and another is quoting them at $80 then it helps me understand where any discrepancies are.  This also helps me make an informed decision.  For example, someone might choose their second preference builder simply because he was cheaper when all they had to do was ask him to use the basic range of tile.  That is a simple example but when you apply that to something as significant as the types of windows used, the discrepancies can be huge.

I make it clear to my builder that my quote is to include everything, which means driveways, required paths and site costs are to be included.  I don't usually require them to include fencing however I will need to take that cost into account.

I have the opportunity to ask the builders who have provided the quotes any questions I might have.

Armed with the process I follow in this course I now have enough information to choose who I'd like to work with.

I engage my chosen builder further but DO NOT sign a contract until we have worked together to nut out any site specific issues that may exist and discuss possible solutions if required.

I seek the builders knowledge to see if there is anything that they feel should be done differently.

Some Building Designers to have a tendency to go overboard in some areas rather than apply what I consider to be rules to creating 'equity'.  (At the end of the day they are creatives who like their finished result to 'look amazing'.  You however, may need to stick within your budget)

If my best option quote is still over my budget I work with my builder to strip things back.  NOTE:  This is ALL done BEFORE I've signed a contract with the builder.  I can still walk away at any time and take my plans with me if I choose.

I discuss with the builder the process of making amendents once the build has begun.  I let them know that I require that they be reasonably flexible without penalty.  I agree to pay for any variations as they occur.  I must however consider that my lender may not provide funds for me to pay for such variations if they are funding my construction loan.

Variations made once the build has began are usually minor and they are usually things that can driven by emotion such as appliances, splashbacks, sinks, tapware etc.  When you go to choose your $35/m2 tiles it's awfully hard to resist the $85 porcelain tiles.  The struggle is real.

So unlike working with a project builder where on one day you go in and 'pick everything in one go, working with a custom builder is often more relaxed where you pick at the time it's required.  For example.  If you've been given an allowance for bathroom and kitchen fixtures you'll visit the home plumbing store and choose according to that allowance.  If you spend less money you'll be in credit with the builder and if you spend more, you'll be invoiced for the variation, it's that simple.  You should confirm with your builder prior to engaging them that you will have this arrangement. (unless of course, you've set your fixtures and fittings prior to signing the contract).

When it comes to selections, anything to do with plumbing comes first as they need to take your products into account when plumbing your home.  Then the rest comes as your home is built out, flooring, kitchen benches, splashbacks and appliances, paint colours etc.  Your builder will give you the heads up what's required when.  It can be more relaxed as you make the decisions based on your home having begun.  You can get a 'feel for it' as you go.

A custom built home means feeling quite connected to the process of your home being built.  You get a great opportunity to address things that might not seem right at the time rather than seeing a problem once it's 'too late'.

With a custom builder there is no 'advertised price'.  You get a quote that you can negotiate.  But you're not negotiating 'their price' you're negotiating the inclusions they quoted for.  For example, you might negotiate with your builder to have a smaller alfresco area so that they can build the home within your budget.

The only extra costs that I incur with my custom builder are the ones I inflict upon myself.  In other words, variations that I choose to make due to an emotional weakness.

The costs

The QUOTED price - $275,300

Download a sample custom builder quote from this example here.

Plans with Building Designer- $3,500

This home had 3 bedrooms plus study, 2 bathrooms, 2 living areas and a double garage.  It was 25sq.

Note that the quote doesn't mention site costs at all.  It's all included in the overall cost of the home.

Initial Build Price: $278,800

I paid $130,000 for my block.

I did not have to pay for any excavation costs as the home was built on piers to maximise the views over parkland adding considerable value to the home.

During the build here's the variations I made which cost me extra ontop of my quoted price.

  • Brick Upgrade $2469 (Big regret)
  • Change in window size (just changed my mind once I could stand in the home) $370
  • Kitchen appliances $1258
  • Kitchen Sink $702.00
  • Lights to overhead cupboards
  • Flooring $1650
  • Blinds $448

Total of Initial upgrades: $6897

Final Build Price: $285,697

Upon completion further costs include:

  • Shared Fencing Costs $3,000
  • Landscaping $3,000

Total cost of landscaping, paths, crossover and driveway $6000

Plus

Total Cost of Block $130,000

Total Overall Costs: $421,697

Unexpected Costs

I didn't have any unexpected costs in regards to building this home.

Upon completion I sold the home for $440,000.

Equity Created: $18,303

If you’d built this home as a Victorian first home owner, you’d also have received the $20,000 first home owners grant adding another $20,000 to your equity position.

First Home Owner Equity $38,303

Note - FYI

The existing home owner who purchased this home paid $18,370 in stamp duty tax on top of the purchase price.

Had they been an investor they would have paid $21,470

An existing home owner who built this home would have paid just $2870 in Stamp duty on their $130,000 block of land compared to the $18,370 they paid which would have saved them $15,500.  (just to highlight this financial benefit to building)

Stamp Duty Saving for existing home owner who built this new $17,950

equity created plus stamp duty saving for an existing home owner who built this home would have been $56,253

Disclaimer

We value the privilege of sharing what we’ve learnt from our own home building successes but please understand that by signing up for the Building Home Masterclass you acknowledge that your experience could be different to ours and Build In Oz, its founder, director or associates do not take any responsibility for your experiences, relationships or outcomes both personally or financially, that you may have as a result of engaging with Build In Oz or it's associated content.