Blog #6: The Contract.

Not a lot happening at the block this week. Sitting tight waiting for our builder to finish of some of his other projects before he gets stuck into our framing.

Have been forking out some cash, so probably a good time to talk about the financial side.

We signed a contract with KM Bray Building over a few beers on the balcony of an apartment in Port Douglas. We were up there for a wedding together so thought this was the opportune time to put pen to paper.

The contract price is $470k, however we agreed to some flexibility to eliminate the financial risk for him and ensure value for money for us.

Signing a contract with a registered builder is a much simpler process rather than building as an owner builder. To get a building permit you need either warranty insurance from a registered builder or an owner builders’ certificate from the Victorian Building Authority (VBA). The VBA have made it more difficult to get an owner builders certificate by introducing an online course to go with the usual construction induction course (white card) and application forms. They have done this to try limit the work done by unregistered builders to ultimately protect the consumer. Unregistered builders should not be confused with unqualified tradesmen, these are usually fully qualified carpenters that just have not been registered as builders with VBA (or equivalent in other states).

The banks have become much stricter with their lending and do not like lending to owner builders. Therefore, getting finance is much easier with a building contract in place, particularly if you use a mortgage broker who will do a lot of the leg work for you.

A standard building contract is structured with the progress payments due at the following stages:

  1. Deposit (5% of contract)
  2. Base stage (10%)
  3. Frame stage (15%)
  4. Lock up stage (35%)
  5. Fixing stage (25%)
  6. Completion (10%)

We waited for our house to sell before committing to the build, which while it created some inconvenience and expense having to rent, it has certainly made it more comfortable. We therefore funded the first 2 stages without finance and Kristian allowed us to arrange and pay some of the sub-contractors direct.

We budgeted $50k for the slab but were pleased to do it a bit cheaper. Early days but budget looking intact….

Anthony from On-time Pest Control has been on site during the week to lay the termite barrier. This is installed between the wall frame and slab – see pic below. We will also have another level of termite protection by having exposed concrete below the cladding and termite barrier.

Wilkinson Plumbing has also been back to lay the stormwater, which will be directed to our dam.

We have spent more time reviewing plumbing fixtures and aim to finalise our selections during the week. We can then move on to some of the other 999,900 decisions we need to make….

That is all for now, talk next week!

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