Pros and Cons of Fixed Priced Contract During Property Value UpsurgeJune 8, 2021
You heard it right! The Australian property value continues to rise and is expected to grow until 2023. Mortgage rates are also at their lowest in years. This combo rarely happens. So if you dreamed or thought of being a homeowner, today’s circumstances are most beneficial to you, where you can save money and be guaranteed property appreciation for the next 2-years.
Let’s say you’ve decided to buy a home, should you buy or build a house? Buying a house has its own advantages. All you have to do is scout through a list of for sale homes, close a deal, and you can quickly move in. It’s easy, fast and stress-free.
Although buying a pre-existing dwelling has its benefits, nothing beats moving into a newly built home. A new house just has this notion of having a clean slate, moving to a new place and starting a new life. But with all the benefits a newly built home offers, many are still fearful of building a new house because of the indefinite cost it may incur. This does not have to be so. You just need the appropriate construction contract like a fixed price contract to prevent the high expense.
That said, let’s weigh in the advantages and disadvantages of building a new home and know more about a fixed-rate contract, which can save you from unplanned cost.
Pros and Cons of Newly Built Homes
The most significant advantage of building a new house is customisation. You have the freedom to realise your vision. You can include functional and innovative home features from the start, like heating, ventilation, and security features.
Another plus factor of building a house is the satisfaction you feel when it is done. Seeing and being part of the construction journey brings an emotional connection. It’s like you have created something, and you are living in it. Can you just imagine the first time you set foot in the house, relax in the living room and inhale that distinctive clean, new home smell?
Problems happen. Even with well-planned house construction, there are uncontrollable things that are part of building a home. For example, man-made mistakes or a sudden economic shift that may increase the cost of building materials are part of the construction industry. These challenges may delay your moving date and affect your budget.
If you have limited funds and do not want the complexity involved in house building, you should choose a fixed price contract.
What is a Fixed Price Contract?
A lump sum or a fixed price contract specifies the total price for all construction-related activities in building your dwelling. The cost typically consists of material and labour cost. This is a suitable contract in times of uncertainties like the unstable economy we are dealing with today.
Advantages of a Fixed Price Contract
The aim of a fixed price contract is to avoid an unexpected price increase. In addition, choosing a fixed price contract will bring you peace of mind. The set price limitation ensures that your home construction stays within the set budget and a specified completion date. Choosing a lump sum contract simplifies things for the buyer, making building a new house an easy and stress-free experience. You’ll just have to decide and agree on the home design and materials, and your contractor will present you with an exact cost. Then, all the weight of the construction process is lifted from your shoulders. In addition, this includes early termination and late termination penalties, thus ensuring your house timely finish.
Disadvantages of a Fixed Price Contract
Lack of Flexibility
A fixed-price contract involves non-negotiable items such as materials and labour techniques. This ensures that the construction stays within the agreed design and timeframe. The non-negotiable items stated in the contract means that if you decide to change any of the said non-negotiable items, both parties must agree on the modification, and additional fees may apply.
The disadvantage of a lump sum contract is that builders usually quote higher pricing. As a buyer, you must realise that the contractor assumes the most risk in fixed priced contracts. The small addition in price takes offset some of the loss brought about by unexpected situations.
Why Should You Avail BuildQ’s Fixed Price Contract?
BuildQ Group has more than hundreds of finished construction projects under our belt with countless satisfied clients. We are steadfast in providing high-quality homes and prompt delivery, gaining a trustworthy reputation in the home and building industry. Still, the question remains, what do we really bring to the table that sets us apart from other builders?
- Excellent customer service
Our aim is to make your vision come true, and we can only do that through excellent communication. Your needs and views are important to us, and we welcome your thoughts and inputs. You can express them with our teams of architects and engineers to make your idea a reality. We also have our friendly representatives who will ensure ongoing communication and updates in every building process. You can also monitor the construction progress anytime with site visits.
We do not hide anything from our clients. On the contrary, we are transparent and inclusive, aimed to bring you satisfaction.
- Maintenance team after you buy from our homes
If you’ve heard of poor after sales, that is NOT us. We have a maintenance team to check and ensure that everything is in tip-top shape. In addition, BuildQ’s completed projects come with a 100% satisfaction guarantee and a 6-year structural guarantee. That’s how confident we are with the quality of our work.
- Quality assurance
We only provide fully finished and aesthetically pleasing homes using materials of the highest standards. We assure you a safe and durable home that complies with Australian and international safety standards.
- Timely delivery
We respect your time, so guarantee utmost punctuality and professionalism when presenting your new home.
Come and build your dream home with us at BuildQ. We ensure:
- Client’s delight with the highest quality standards for every project
- On-time project delivery
- A safe and secure home that complies with Australian and international safety standards
- 100% satisfaction guarantee and a 6-year structural warranty