Hi all,
I'm new to ozbargain, I joined because I'm desperately want to ask this question.
I have been looking for home builder for almost a year, and the private builder quoted prices $700+, but the project homes (e.g. Eden Brae, Metricon, etc) quoted prices under $400k.
I don't understand why such a massive difference, is there hidden costs I should know about? It seems too good to be true.
It is a massive investment in our life, and we are afraid of making the wrong move.
Thanks
Do they cut corners though, use cheaper materials without telling me, or the building only last half as long, etc.
Because $300k difference is life changing. Our land is very generic, no trees, rectangular shape, flat, easy access to road. It seems no brainier to use project homes?
Do they cut corners though
Yes, but it still meets building standards. It's just that things could have been better than the minimum building standards.
use cheaper materials without telling me
No, they tell you. They provide a full list of specifications. Whether or not you understand all of these specifications is a different issue.
or the building only last half as long
It's probably not going to be a house that is still standing in 100 years, but it will last as long as you want to live there. Things might potentially start to get a bit shabby looking and need more frequent repairs over the years than a house that was built to higher specifications though.
Here is an example of what I mean. It's a real example from my own life.
I live in Sydney and my house is 130 years old. It is made of brick and sandstone. My brother also lives in Sydney in a project home that was built in the 90s. I have owned my house for 13 years, he has owned his for about 10 years. In that time he has had to replace all of the flooring in his entire house because it wore out. He has also had to replace his entire roof because of broken concrete tiles. It was expensive - tens of thousands of dollars. The floors will probably need to be replaced again at some point.
My floors are hardwood. They are still the original 130 year old timber floors. We had them sanded and polished when we first bought the house ($1000) and will probably need to do that again at some point. We have not had to touch the roof. It is not the original roof but because the pitch of the roof is much higher than his (a lower pitched roof is another cost cutting thing that project homes do), and the tiles are better quality, everything is still watertight.
In general, most things were built to last a lot longer 130 years ago though.
@Love a bargain: Another way to look at it is that things that were built to last did. Things that were not built to last didn’t, be it 100 years or 20 years.
Humans have been building shoddy stuff since we started walking upright.
Modern mass production and computer design analysis has just thrown a whole new level of design practice to reduce the cost of an item by a fraction of a percent.
They build in volume - 1 style but 50 of them.. they get the trusses walls and stuff in bulk instead of your 1 off.
even project homes, change a wall or a door and the price can explode….
private builder quoted prices $700+
project homes (e.g. Eden Brae, Metricon, etc) quoted prices under $400k
Half a duplex?
You asked for disadvantages of project homes, so I'm going to list some. This doesn't mean you shouldn't do it - they have advantages too. Some of these disadvantages may also apply to an independent builder depending on who it is and what they do.
1) They are designed and built in bulk. This means that your block of land has to be adjusted to suit the house. This can be expensive. When you have a house designed by an architect they will design the house to suit the land.
2) They tend to use the cheapest products unless you pay extra. The downpipes, for example, may be pvc piping that is painted to look like metal. This is not necessarily bad, but if you knock a metal downpipe it may bend, whereas if you knock a pvc pipe it may break.
3) Things that some people may consider basics (e.g. sarking in the roof) are often an optional extra
4) Things that some people consider good design for a variety of reasons (e.g. eaves) may be reduced or missing to save costs
5) Because of some of the above points (e.g. lack of sarking which adds insulation), the house may be more expensive to cool and heat.
6) They look like project homes which some people may have snobby opinions about
7) If you make any changes to the basic design the costs add up quickly
Word, wiz … all of that is very well said. Take heed OP.
Thanks mate. With private builders how do I know for sure that they don't cut corners and use premium materials?
Also I heard many private builders shut down the company immediately after each build thus can't be chased for warranty. I heard this from property agents. Not all, but certainly something to consider.
With price almost doubled, i would expect so much more rather than just ability to customised.
You have to do your due dilligence. You have to ask questions and check. Perhaps you could start by directly asking them how their houses are better than a project home.
You have to look around for a builder, look at some of the houses they have built, and check how long they have been in business. A builder who has been around for 20 years is unlikely to suddenly shut down after building your house.
Building a house is a stressful process and you will have lots of things you are worried about regardless of who builds it. You probably won't ever be 100% happy, and will think about things that could have been different. This is because you will have a huge emotional investment in the building of this house. That's just life unfortunately.
how do I know for sure that they don't cut corners and use premium materials?
Anecdotally, and this applies to project builders as well as independent (and to be honest really anything involving a contract):
If it's not in the contract or law/regulation, it won't be done.
It'll be done to the contract/law/regulation/industry standard. If you want something specific ("premium materials"), get it in the contract.
And just because they say something is good quality/premium, doesn't mean it is.
Volume builders are able to offer those prices because they are part of a buying group that allows them to be able to receive large discounts to purchase of certain supply chains. They also screw subbies down somewhat on prices, with some trades rather them quoting the job the volume builder tells them how much they will pay them to do the work. There prices start at very budget fitouts eg 2400 ceilings, no eaves, cement sheet or similar infill above windows, laminex bench-tops etc etc, they make a lot of their money off upgrade packages and people making changes to the actual design of the house.
A good private builder is worth the money if you're looking at building a custom home that isn't a typical 4 bed brick veneer home that looks like it belongs in a new housing estate, they are generally far more flexible at accommodating late design changes and provide you more freedom on fittings. A volume builder is going to show you a display rack and tell you that you can pick a door handle from that section (depending on package). A private builder is going to do something like tell you they budgeted x amount for the door handles and go to this store and pick which one you want within the budget and if you go over then you'll need to pay extra. I will add if using a private builder an interior designer that nominates all fittings, floor coverings etc for the builders to quote off is quite beneficial as then you know the price given is based on the fit out you chose with the interior designer.
Realistically volume builders offer a service that is very appealing. You can step foot in their office/display home, you can look at floor plans and choose one you like, go through a package and walk out with a quote (subject to site costs) that day. But go to a private builder and they're going to say that you need to get plans drawn up. So you go and see an architect or draftsman who is probably going to take 1-6 months to draw up plans and cost 4k-15k roughly, then you go back to the private builder, they are then going to send the plans to all their trades and suppliers to price up. After about a month they will get back to you with a price…. and then you find out that the house the architect thought would be 500k is actually 700k and you need to go back to the drawing board.
Really great info. While I'm not in the market to build a house, or buy one for that matter, this is definitely useful info for future reference!
Re:
'… they are generally far more flexible at accommodating late design changes'
Actually, they are most definitely generally not; unless you have a 'lazy 100 grand extra' to chuck into the mix. Then of course, like anyone/any company, they are. 'Bespoke' is expensive'—especially if you decide to change something late in the piece—regardless of who you are paying.
How late are u talking here? If rework needs to be done onsite then obviously charges are incurred but if its minor changes once contracts are signed but before installation of said change then i disagree with your assessment and believe your average private builder will be flexible on design changes without charging u an arm and a leg
We built our architect designed home around 12 years ago, the prices ranged from around $560k up to $1.2 mill we went with the $560k, they were a small family custom builder of many years duration. Fantastic quality, fixed price we were blessed!. The $1.2m builder would have done a 3 coat paint job, but the 2coat we had was fine!.
It is important NOT to make changes, I did one - ply floors rather than particle board, we had much rain at the time and wanted to ensure no underfloor damage. Cost - minimal just the actual difference!.
We also had a quantity surveyor cost out the build, it was so worth that cost ……knowing those details had some builders a bit on edge, and the costing we had was quite close to our final build price!. This aspect was due to a developer we knew and suggested the survey, how right he was.
Good Luck
Large volume builders are very clear what items they place in your home which are very basic. However they usually have 3-tier packages with lowest to highest materials/size of home or as some say here, you can add better fittings etc for more cost. They don't offer too many differences in design as it is easier to cost and know that you will get exactly that build. If you want a custom home, then go to the specialist private builders which most likely be way more. Don't forget when you decide to go ahead and build (with any builder), hire an independent building inspector throughout the whole build.
Had a mate who was a builder tell me for project home or developer works they use minimum of everything. Spec homes for example might have 1.5-2x as many screws in the flooring to help prevent squeaks etc.
Project Home' price is mainly based on building size. In your quote, it may be about 25sq. It is a generic cookie cutter product that not much you can modify. If your budget is below 1mil, go for a project home.