When you’re building a new home, it’s important to understand the fixed costs in the quote you receive from your builder. Many builders will put something called ‘prime cost’ items or provisional allowances into their quote, and clients may find that when it comes to actually selecting items for their home, they’re met with surprise costs that weren’t included in their original quote. At Hotondo Homes, we are committed to providing clients with transparent pricing to ensure you don’t get any costly surprises.

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What Are Prime Cost Items and Provisional Allowances?

Often builders may include prime cost items and provisional allowances in their quote. These could be for the kitchen, tapware, sanitary ware, connection of services, bricks and many other items in your new home. This is where a nominal figure is included in your quote to cover basic items, so when it’s time for you to make your selections for your new home, you pay the difference between the basic item and the item you wish to include.

Why are Prime Cost Items and Provisional Allowances Confusing?

Many clients are unaware of these additional charges when they do their selections, and while it’s considered very normal practice in the building industry, it can lead to clients becoming disillusioned and disappointed. Clients who sign a contract with a builder in good faith based on the quote they’ve received being a fixed price then find out throughout the building process that every time they make a selection, or there’s a construction issue on site requiring extra work they incur additional costs not included in their quote.

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Why Is It Best to Quote Accurately?

We believe that quoting clients with prime cost items and provisional allowances is a bit of a trap – so we don’t do it! Inevitably these allowances do not cover what you will ultimately select for your home. We want you to have the freedom to select exactly what you want for your dream home and understand where it fits in to your budget, without the nasty surprise of additional costs, so the price we quote you in your contract is the price you pay. The only change to that is if you have specific items you’d like to include, or upgrades you’d like to make in your home.

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How Can We Quote Accurately?

Providing our clients with a true fixed price quote takes a lot of work, due diligence on our part, and time. Our builders visit every site, and arrange to do specific soil tests, rock test, fill tests, compaction tests and contour surveys. Then, armed with all that information, they get a civil engineer to asses the best way of building your home, the necessary site cuts, piers, fill and driveways, paths, and retaining walls if required. They also work to determine the position of the service connections, and price those accurately. Once all this has been priced, the builder then works on pricing the cost of building your home, including any modifications you require, to an agreed specification level. This level of specific pricing will provide with you with a fixed price quote to give you an accurate idea of your overall costs, right down to the cost of including heating, cooling, light fittings, and even the mail box!

At Hotondo Homes, we are committed to making sure you don’t get any nasty surprises throughout your building journey, and that the price on your contract is the price you’ll pay. We believe in being accurate and transparent in our quotation process, and we will work closely with you to answer any questions you have, include any modifications you may need, and provide you with an accurate price for your home. To start planning your dream home, visit the Hotondo Homes website and find a local builder in your area today!

Trying to improve your finances is not an overnight task.

Working towards a deposit for your home takes time and patience. The best way to approach it is to start with small changes in your life. This doesn’t mean giving up absolutely everything, but rather cutting back on the non-essentials in life. Every little bit counts, and each small contribution can result in big progress.

We have rounded up a list of nine things you can start doing today to help you improve finances and get on track to purchasing a new home in 2017!

1. Cancel subscriptions/memberships

Topping almost all financial guides is cancelling subscriptions to magazines or gym memberships you do not use. Another perhaps unnecessary purchase is cable TV. With so many cheaper, alternative streaming options available, it may be worthwhile checking out.

2. Renegotiate your bills

Shop around for your energy, gas, credit card and insurance needs. If you like the company you are with, a simple phone call asking for a reduction will often get you a cheaper price – they want to keep you as a customer! It may be painstaking, but renegotiating your bills could save you some big cash. If you already have a mortgage, it is worth speaking to your bank about an interest rate reduction too!

3. Pay your debts

If you have a high-interest credit card, the first thing you should do is pay it off as fast as possible. Interest-related costs is basically dead money, so working to get rid of the debt should be your priority. Consider transferring the balance to a credit account with a lower or even zero-interest rate to further help your cause and improve finances in the new year!

4. Find your unclaimed money

The Australian Securities & Investments Commission  can help you search for unclaimed money from various banks, building societies, credit union, life companies, friendly societies and registered Australian companies. Check out this link to see if you have any unclaimed funds!

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5. Automate your savings

Set your bank account to withdraw a portion of your earnings every time you are paid. By doing this straight away, you can never miss the money you never had! If you can transfer it to an online account you cannot touch, or does not have an attached card, even better. Be sure to figure out exactly how much you can afford to save per pay by creating a budget for the week, fortnight or month.

6. Reconsider your phone plan

Just like renegotiating your bills, it is worth checking out your phone plan for cheaper alternative options. These days there are so many options including ‘bring your own phone plans’. These plans require you to purchase a phone outright, but the ongoing monthly cost of the phone plan is significantly cheaper than an all-inclusive one, which could work out cheaper in the long run. Carefully consider all your options and work out what is best for you and your lifestyle.

7. Take a grocery list shopping

Plan out your meals for the week, write a shopping list and STICK TO IT. How many times have you gone to the supermarket and come home with items you never intended to purchase?

8. Cook dinner at home

Not only can this be cheaper and healthier than eating out, but you can also cook extra to have for lunch or even dinner the next day, saving you even more cash.

9. Don’t be TOO strict!

Saving for a new home will require some discipline and cutbacks, but you still want to live and enjoy life while you do it. Don’t feel guilty for indulging every now and then and treating yourself. If you work hard to stick to improve finances for 2017, there is no reason to not go out, enjoy a nice dinner or hit the shops on occasion. Do not let your finances consume you!

 

Contact your local Hotondo Homes builder today to find out more and help improve finances next year!

 

*Hotondo Homes is not an authorised financial adviser so please seek professional advice for your banking enquiries.


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