Those who are thinking about hiring new home builders perth should know that there are a few types of contracts that can protect their interests as their house is built. Given the variety of contract formats, buyers need to make sure they choose the right one in order to accurately keep track of their expenditures, budget and also help the builder know exactly what the client expects. Each home building contract needs to include the terms of payment, the materials to be used, the project’s start and completion date, method of payment and other details in order to reduce the risks of future issues and surprises.
Cost plus contracts
If you’re an owner who can and agrees to pay a bit more for maximum flexibility, then you’ll find that a cost plus contract is one of the best choices you can consider. This is a contract that involves paying the ticket price for materials, but also the costs associated with the necessary labor. However, asides from these costs, you also need to pay a certain percentage (usually low) to the contractor to ensure a certain amount of profits for him.
Keep in mind that the specific amount of this fee is clearly stipulated in the contract ahead of time. In a cost plus contract, the home builders get paid for the amount of time they work, so working fast is not something they’re interested in and that is why the completion date may change. Even if you’ve received a completion date for the project, it can be influenced by unforeseen conditions and the type of construction materials you choose.
The fixed price contract is the most common custom house agreement people will usually consider. This contract means that the client is going to work with an architect for developing project specifications and construction drawings. After that, these will be presented to a list of contractors who are going to carefully analyze them and bid on the project accordingly. Their bid will include the equipment and labor required for building the house according to the supplied plans, the materials required and so on.
After each contractor has provided the client with a specific amount of money for the project, the client will analyze the bids and then choose the company that he thinks will do the best job. When using a lump sum agreement, it’s in the contractor’s best interest to finish the project as soon as possible, since going over the projected completion date will cost the company money.
Design and build
If you want to take advantage of the simplest option for building a house, especially if you want a hands-off type of agreement and a fast schedule, then the design and build is the best type of contract you should consider. One such contract means that you’re going to hire either an architect or a contractor and then authorize them to hire a builder or a designer for completing the project. The 2 parties will coordinate with one another and have the project completed according to the client’s specific requirements.
The great thing about these contracts is that the home builders and the designer will work under the same contract, so for you this translates to less risk of delays and disagreements between them. As for the contract price, it includes the labour, materials and design necessary for building the home. In terms of cost, this is one of the best choices for clients, since there will be no or less financial surprises.