Builder Asking for More Money after Finance Approval, Now Threatening to Remove Inclusions

TheMoDz on 11/07/2021 - 18:58
Last edited 12/07/2021 - 11:05 by 1 other user

Hey guys,

I'm in contact with a Builder/Broker in WA around November, December and was quoted a specific price to build a house, cool, I got the deposit, but we had problems with finding a bank that will finance me as I just moved jobs, we all waited six months and went with a bank, bank approved the finance just a month ago, now builder/broker setup a meeting asking for $16,000 because apparently labour went up,

What's weird to me is that, he waited till the finance gets approved and the land to take money out before telling me this, now at the beginning and its in my contract as well, that I will get Inducted air condition and wall painting included, now I just received a variation to take out both of those to reduce the price and cover that supposed labour increase.

Is this right? it doesn't feel right, like being offered a package and a set price then asking for more money and threatening to remove the included stuff if I don't pay…

Can someone point me to the right direction.

Thanks

Home & Garden

Comments

  • Ughhh on 11/07/2021 - 19:02
    +7

    Have you spoken to your conveyancer/lawyer?

  • jv on 11/07/2021 - 19:03
    +21

    What does your contract say?

    • SF3 on 11/07/2021 - 20:15
      +1

      Exactly, quotes usually would have a time limit clause.

      it doesnt feel right

      I’m sure you have some hard feelings, but clauses are not feelings based…

    • AndyC1 on 11/07/2021 - 22:00

      The contract you signed and read carefully and got a lawyer or conveyancer to check and advise will have info on it about what the builder can do and what you can do about varying the price.

      So what does the contact say?

      • magic8ballgag on 12/07/2021 - 09:55
        -2

        jv's comment was plenty, thanks.

  • Rashed on 11/07/2021 - 19:07
    -1

    DBDRV

  • PissLUR on 11/07/2021 - 19:09
    +5

    builder or broker?

    join Shonky Buillders WA on Facebook to get advice.

  • oscargamer on 11/07/2021 - 19:15
    +1

    Have you signed anything?

  • MrHyde on 11/07/2021 - 19:16
    +16

    6 months is a long time in the building industry… labour has gone up as has materials.

    Do you have a signed contract? or were you waiting to sign the building contract. If you have a signed contract, what does it say about starting dates and any penalties for not starting on time. Usually they will have clauses around delays caused not by them - like council approvals, etc.

    If no signed contract, then they are under no compulsion to keep the price the same. I know when we built, the quotation was valid only for a month - we did end up keeping the same price 2 months later; but knew it could have gone up.

    As for the builder waiting, again depends on what was signed and how much communications you have had with him over the last 6 months - maybe he thought you guys were no longer interested; so stopped comms with you.

  • spackbace on 11/07/2021 - 19:18
    +10

    In 6 months a lot has probably changed, obviously the industry is going gang-busters.

    Certainly wouldn't expect a quote to hold for 6 months.

    They likely figured you just wouldn't get finance, if the approval took that long

  • sparkles on 11/07/2021 - 19:20
    +16

    You snoozed on this due to lack of finance and now expect the builder to honour a nearly eight month old quote?

    • TheMoDz on 12/07/2021 - 19:01

      Didn't snooze due to lack off money, no bank want to finance me due to moving to new work, all party was aware of this and they were willing to wait

    • oscargamer on 11/07/2021 - 19:54
      +3

      OP mentions nothing about a contract, only a quote.

      • garetz on 11/07/2021 - 20:55

        now at the beginning and its in my contract aswell

        • oscargamer on 11/07/2021 - 20:56

          Have you signed your contract yet?

          • garetz on 11/07/2021 - 20:57

            @oscargamer: I quoted the op, it clearly mentions a contract. So what i said is valid.

            • oscargamer on 11/07/2021 - 20:59

              @garetz: ah - ok, that's not how i read it

              I read it that he had a quote, and was still securing finance before signing the contract……

              His mention of the contract, I read as being what he will sign once his finances are in order….

              • garetz on 11/07/2021 - 21:03

                @oscargamer: The way i read it is there was a quote, and then an agreed contract, however the contract was subject to finance, which took 6 months to get approval.

                Guess its hard to say for sure, but could be either way.

  • Seraphin7 on 11/07/2021 - 19:24
    +1

    Without a specific agreement, you can't assume a quote remains unchanged after six to eight months.

    It comes down to a simple question … what agreement do you have with the builder?

  • Dundundunnnn on 11/07/2021 - 19:47
    +13

    As a builder going through this myself at the moment with a range of clients… expected build costs have increased in the vicinity of 15% since November last year with further price increases expected in the coming months. I don't know what your contract price was but $16k is likely not even going to scratch at the surface of what this builder is experiencing from suppliers and trades at the moment. You ultimately have 4x choices. 1. Negotiate a lesser amount. 2. Negotiate payment plan. 3. Suck if up. 4. Walk and wait 18 months for another builder (and potentially pay alot more at that time).

  • Guybrush57 on 11/07/2021 - 21:50
    +6

    Im in contact with a Builder/Broker in WA around November, December

    It's now July

  • Third_Gear on 11/07/2021 - 22:10
    +2

    6 months is a long time. Pay it. Get your house built. Enjoy life.

  • Bob Svargis on 12/07/2021 - 07:26

    Check your contract, perhaps?

    • Logical on 12/07/2021 - 23:53

      There appears to be no contract, just a quotation from waaaay back….

  • exceladdict on 12/07/2021 - 09:16
    +3

    If your builder uses the standard WA fixed price contract, there is a days for finance specified in the schedule. If you took longer than that, there are relevant clauses that allow the builder to raise the price.

    If it's more than a certain amount (I think 5%?) You are able to cancel the contract in response. Or, if you think it's unreasonable, you can go to the relevant tribunal at which point the builder will just have to prove it is (which in the current climate they probably can).

    Source: happened to me as well

  • Darayus on 12/07/2021 - 09:28

    unless contract is not accepted by you and signed till then price & delivery is subject to change.

    My builder ask me to accept the contract with special condition in case I want to hold on to price subject to finance (within 8 weeks) even then he had change the delivery time from 16 weeks to 40 weeks since there is a huge shortage of timber frame and material and all his project are now running late.

    There is a huge surge in demand in property and if you really wish to get on the bus then you just cope and it and move on or you will missed out on this and keep paying rent on your current house.

  • 87percent on 12/07/2021 - 10:48
    +2

    $16k in when building a house is peanuts…

  • whitelie on 12/07/2021 - 11:06
    +1

    As others are saying it will be in your contract.
    Something along the lines of if there is a delay beyond 45 days that they are able to increase the price by a set amount. This can then be up to 5%, if it is more than this you are able to cancel the contract. I've been dealing with my builder since August, luckily locked in the price then getting them to begin preparing the plans. Finance got approved in March but took them this long to get everything sorted on their end so no price rise. If I were to sign up now, it would easily be another $30-40k on top. Labour has gone up and all the packaged inclusions are gone due to the crazy demand.

    Given how busy everything is and how long it takes to get full approval, 45 days isn't long at all.

    If you can't come up with the additional $16k, then they will be able to reduce the price as they are doing. Have you done your pre-start and finalised everything yet or are they just pulling stuff out of the quote to keep the total on par?

  • OzHunterNSW on 12/07/2021 - 11:59
    -1

    He has shown his cards….. walk away… money speaks…. walk away

  • WT on 12/07/2021 - 13:46

    I get that 6 months a lot has changed, but I dont think anyone is building a house within 6 months right now. E.g neighbours were in the last stage of demo 6 months ago, they have gotten the slab and some walls up of the lower split level/garage only.

    Im not sure if any of the builders are going to wear the additional costs/delays that are currently going on. Basically its half BS and half true

    • whitelie on 13/07/2021 - 13:07

      Contracts are definitely written in the interests of the builder (eg practical completion within 300 days of signing but they won't be responsible for delays in materials, labour etc and will not pay higher amounts to secure them).

      My initial quote was from August last year, financed and contract signed 6 months later in March for the same price. Will probably be 12 months from the initial quote to getting a slab down and another 9-12 months for completion at a guess. We were very lucky to have secured the price but that said, we did forego $25k in grants having to wait for contract prep.

  • HeWhoKnows on 13/07/2021 - 14:15

    Thats life at present

    All building costs are going through the roof at the moment

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