Welcome to Home Building Like a Boss, the podcast dedicated to helping first home buyers in Perth  build their dream home with ease and excitement.  I'm Jamie, your host and go to building broker.  Are you ready to feel empowered, in control and excited about your building journey? I'll help guide you with expert advice, insider tips and tricks and real life stories to help you navigate the confusing world of home building.

Tune in as I take you on the journey to building your home like a boss. 

Let's get down to the nitty gritty of builders, promotions, and terms and conditions. And the reason that I bring this up and chat about it is because I've had a few clients helping me with a secret project and which all will be revealed in  Early next year, we're going to launch it, which is very exciting.

So we're still just working at building it and getting it all ready, but we've had some clients help us with part of that project and part of that project was just understanding some questions that they had, and there was quite a few questions. Um, I'm going to be talking about a few things about builders, promotions, and red flags with builders and terms and conditions and things like that.

So what I'm going to do is I'm going to dive into a few of those things, like red flags, looking at with builders and also understanding builders, promotions, and terms and conditions. Because basically Under the terms and conditions, most of them can be undone essentially, and builders aren't giving anything away for free.

So, you know, when you think about all these promotions, like where is the money coming from? The builders aren't giving away a 60, 000 kitchen for free. They're not giving away an air con and pool for summer for free. So the money has to be coming from somewhere and somebody has to be paying for it. And 99 times.

99 percent times it is the client that is paying for it. So  it's really, really important to understand these promotions and just don't choose a builder based on promotions. Because if you choose a builder based on the promotions, you are set up most likely to go down a slippery slope of a not so great building experience.

There's a few promotions that are, I guess, like the typical ones that you see will pay your rent while you build, will pay your rent while you build is 10, 000. Added into the base price of the home. So let's say your home was 290, 000. Fairly cheap home. 290, 000. Now, we'll pay you rent while you build. Your home is 300, 000.

So you're getting your money. Your money that you're financing is getting paid back to you. The builder is not giving you 10, 000 to cover your rent. It is your own money on finance that is getting paid back to you. So we'll pay your rent while you build is, you know, they market it. We'll pay rent while you build cool build roughly lasts for, you know.

12 months. Are you paying my rent for a whole 12 months? The answer is no. So the way it works, like in your terms and conditions, if you go onto a builder's website where they have, um, will pay rent while you build, you can see it's a maximum of 10, 000 and it's paid over 20 weeks, 500 a week, or they might pay it as one whole lump sum at settlement.

Which is when, you know, the builder gets part of a progress payment, then they start to pay it. So, that's in the crux. That is understanding, I guess, we'll pay rent while you build. Things like, yeah, have free aircon, or you know, these promotions, or free 60 grand kitchen, etc. All these things, they're not actually for free either.

Sorry to break it to you. And it's added, those costs for that is added into the base price of the home as well. So let's say aircon, let's use 10 grand for a round number. Aircon's 10 grand, the same thing's going to happen. That's added into the base price of your home. And now the marketing is you have free aircon, but it's hidden in the base price of your home.

Like there is a cost for everything. Same as, you know, if you upgrade something or you change something. There might not be a fee to change a custom or make a custom change or change something in a base plant. But there is a fee for the materials and the labor and the things that you do. So, you know, adding extra tiles or changing something or adding in a door, you know, all those things cost money.

So that is then going to get part that that's part of the price in the bill. With build time guarantees, you have, you know, some builders will, you know, you know, 10 month build time guarantee. But when you look at terms and conditions for the 10 month build guarantee is from when the first bricks laid to when practical completion is.

So, you know, how long does it take for them to get the first brick down? And then that's when your 10 months starts. So technically your build was most likely going to go over 12 months because of that part of the start. They're not actually counting for that. So. Don't fall for the shiny objects and, Oh my God, the promotions.

And this build is so great because they're offering this. You really need to pull it back, do your research and understand the terms and conditions because a lot of them aren't actually what they seem on the front end. It's a lot of smoke and mirrors, and it's not actually what it's. truly is. With build time guarantees, so some builders will obviously have most have like a 12 month build guarantee.

With 12 month guarantees, you know, there are builders that are delivering on these and that they do stick to their 12 month guarantees. Find, have a look at social media, have a look at clients, their experiences, when a home's being handed over, all those kinds of things. Those Reviews, social proof, and real life client stories are going to help you understand, is this a good builder or is this a red flag?

Circling back to the build time guarantee, they'll have a build time guarantee and then they might say, okay, if we go over 12 months, we'll pay you 400 a week for the maximum of six weeks we go over. It will always have a maximum. The builder's not going to just say, well, we'll pay your rent for however long we go over.

Most builders will have, if we go over, we'll pay your rent for a maximum of six or eight weeks or something like that. So it's still really important to check those terms and conditions on those as well. And same as your, so like building contracts, for example, building contracts are under the HIA and MBA, the master builder association and the housing Institute of Australia.

They are governing bodies in the building industry and most. Of those contracts are standard templates and they're fixed price contract templates, but those are fixed price contract templates. There is a clause in there that builders can use for unforeseen circumstances, supply, labor costs, weather, et cetera, all those things that they can use that.

Or if you haven't met your obligations of, you know, moving through the system quickly, not holding things up, getting your finance on time, all those things that you need to do as. Your obligations as the owner and then the builder has their obligations that they need to do. They can use one of the clauses in the HIN MBA contract to issue you a price increase.

So your building contract is technically fixed price, but builders do have the option to unfix  your fixed price. price contract, using those clauses in the contract, which is why it's so important to go with a builder who's not using and abusing those privileges and who is not passing on price increases to clients willy nilly who are meeting all their obligations and moving through the system and doing all the correct things.

So a builder can pass. A price increase up to 5 percent and you can't cancel the contract. If a builder passes a price increase over 5%, you have the option to terminate, but they have the right to pass on all the costs on that job up until that date. So that is a little bit, obviously a tricky situation.

I, and like, obviously I can only speak for our clients and our builds and builders and things like that, no price increases. So we haven't had to do any price increases in a very, very, very, very long time, like since COVID times. And it's about working and finding builders who are doing, you know, the right things, you're meeting obligations, all working together, working together as a team to achieve the same goal, which comes back to as well, you know, Finding the right builder who aligns, has the same values, are they transparent, do they communicate, all those things, because you are finding and putting together a team to help you build your house, which is the biggest investment that you're ever going to make, and you want the right people and the right team.

On that job to help you through that. Everyone's working towards the same goal. And there's a huge misconception. And there's, I think a lot of negative connotation in the industry around builders and clients and, and builders being out to get people and all these things. And it is actually, there is a lot of good in the industry too.

And it's about finding the builders and the people that are there and want to help you and work with you. To work towards the same goal, because at the end of the day, most builders want to have happy clients, build a beautiful home and things like that. So it's finding the right people and knowing that if it looking out for the red flags, if you see any red flags go with your gut, I got a phone call from my cousin last night and he said he had a meeting with a.

Sales rep for a builder. And he called me and then he was like, can you remind me what you do again? And blah, blah, blah. You know, so he's coming in for a chat. Um, but he was telling me about his experience with the sales rep and he was just like, something just did not sit right with me. I came in for a hard, you know, hard close.

He's a block. He's a package. He's this, he's on a house, you know. Got to move quick, blah, blah, blah, all these things. And he was like, whoa, whoa, whoa. I am feeling very overwhelmed. I literally only just thought about building a couple of days ago and then inquired, and now I'm sitting here and I'm being told I need to make a decision within 24 hours.

Like with no information on building, how it works, all those things. And the feeling he had in his gut, you know, with a builder and a consultant or a broker or a rep for. 12 to 18 months, depending on when your land titles is, how long construction is in two years, for example, with clients that have delayed titles, you need to, you want to make sure you're with someone who you trust and you can call and you can ask questions and you together for 18  months to two years, you don't, if you have a.

Gut feeling and it's not feeling right, and I get another opinion. Talk to somebody independent, talk to friends about it, speak to someone else, you know, go with your gut because sometimes if you don't it, it's going to end up in a situation that you don't want to end up in. I think I just went on a little bit of a tangent there, but I'm gonna circle back to the terms and conditions and the promotions and the smoke and mirrors.

It is all smoke and mirrors and promotions, so nothing. Is given away for free. It's really important to remember that is not the be all and end all when you choose a builder, which kind of linked me into my rant that I went on just before. Pick a builder who, you know, is delivering on timeframes, good quality.

They, are they, what are their clients doing on social media? Are they.  Delivering on time. Are they doing what they say? What is product review? Say all those things, you know, do some research. It's not just about all the promotions and saving a dollar or cause the cheapest quote is normally not the best deal.

The best deal you need to account for timeframes, quality, and price.  And if you go for the cheapest deal, you're going to. 

So it's really important and it's super hard question to answer of how do I know which is the right builder? How do I, cause that all falls into, you know, what block do you have? What do you want? What's your budget? What, what's more important to you and your lifestyle? So it is a super hard question to answer.

And that's why I guess it's a very stressful and overwhelming process, especially when you don't know what you're doing at the start. And then, so you go walking through display homes and you get. Um, going through display streets and you're having consultations and you going to a display home, you end up feeling more overwhelmed than when you, than when you left, it's all price and promotions and, and things like that, which that is, I guess, the front and the smoke and the mirrors, but you need to peel back the layers and actually see, okay, What do I want out of a builder?

Who do I want to work with? What are they doing? All those types of things. So hopefully that's been helpful for you. If you have any questions, of course, or any concerns, or you want to understand terms and conditions a little bit better or anything like that, call in the show notes below, and we'll be able to have a chat with you and.

Hope you're out from there. 

Thank you so much for tuning in to the home building like a boss podcast. I hope you enjoyed today's episode and learned something new. Remember you've got this and I've got your back until next time. Stay inspired, stay informed and stay confident on your building journey. I can't wait to chat with you on the next episode. 

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