The Budget

Everyone is on a Budget, some people may have more in the kitty then others but there comes a point in everyone’s building journey when a line has to be drawn and the words “We can’t afford that” come out of your mouth.

Keeping a track of what you will spend is the key to remaining within budget.

We did this via a spreadsheet. It listed every single cost we came across and has grown to over 367 lines in the past 9 months. Some pricing is easy to find out, for instance, the electrical department at WOS are very open about their costings. Other areas such as the kitchen options are a lot harder to find out because it is priced up after your WOS appointment with Kitchen Culture.

Whenever we found out a cost on something we noted it in our spreadsheet, whether it was old pricing off the Home One forum, something a Sales Consultant had mentioned in passing or an approximate pricing from a WOS assistant.

If you want to know how to blow out a budget, I can help you. We spent $40k more than we originally intended, however, it was all tracked and accounted for along the way.

Tips for your spreadsheet

We had 4 columns beside the name of each item, Green, Blue, Orange and Red.

This meant that we could prioritise our wants and our needs. Everything we needed and decided would definitely be in the house was coloured green. The things that we really really wanted but were not 100% certain of were blue. The things that would be nice to have but didn’t need, such as underfloor heating in the master bathroom were coloured orange and items we had decided against were coloured red.

What this meant was that we could look at the total at the bottom of each colour and say, ok we can afford the green and blue column and if we find an extra XXX amount, we can include that orange item as well.

Also, it meant as our priorities changed, we could easily move things from one column to the next.

Having now completed Contract stage, the Blue and Orange columns are now empty and everything is either Red or Green.

We broke the spreadsheet up into sections and the order is the same as the PD quote,  tender document and contract document.

This meant that when we went to tender and the contract meeting, Dave pulled out his laptop and followed along, line by line. This allowed us to spot the few times when the pricing had changed and no one had advised us that an item had gone up or down in price. A few times there were pleasant surprises as an item we had questioned earlier came up as a credit.

It also meant that the contract appointment was not so daunting. These presenters move at quite a pace, they do it every day for a job and understand what they are saying and what it all means. However, most of us are not used to being told line after line of numbers and items, with no time to think, react or double-check our own notes.

 

Offices on the left that the Contact and Tender Meetings are held in

 

We now have a new tab in our spreadsheet for all the costs that will come in post-handover. This only has preliminary costs and items in it so far but it all needs to be kept a track of, the coffers are not bottomless and you cant keep saying “We’ll just find the money later.”

I’m not sure if Porter Davis has a clause in their contract about sharing pricing, I don’t know if it falls under their IP. So I won’t post the whole spreadsheet up on this blog, however, if you would like to know some line pricing of what we paid for certain areas please feel free to private message me and I’ll share what I know.

Our pricing is all from 2017, PD often goes through price rises, they have a small one coming up at the end of January 2018 and their main one for the year will be in August 2018.

 

More PD Office’s at Docklands that Client meetings are held in.

 

Below is the totals page from our contract. We had a House and Land package so our site costs and Estate Covenants requirements were all included in the “House type” price. Because we then picked promotional packages that included items that were already in our H&L package, we were then credited these back, hence why the Estate Covenants section is a negative amount.

This is also why the first line on the spreadsheet is different to the first line on the summery house type below, the spreadsheet has it all broken down.

Remeber the bank will only loan you up to 95% of what they value the house to be. This is if they had to sell it as a mortgagee sale prior to completion. Not what you spend on constructing it and not what the valuer will value it post hand over when everything is completed and you have time to sell it at your own pace. Be prepared for the bank to value your home a lot less then what you are paying to build it. You will be fine in the end but getting there can mean extra finances and deposits that you didn’t account for.

Do your research on what houses are currently selling for in the area that you are building. What price are people getting for the same house style as yours on Realestate.com.au . Ie. an already built house with 5 bedrooms, 4 bathrooms and a 2 car garage in Tarneit will cost you $900,000 at the moment.  But that’s not what our bank valued our land and construction at when they told us how much we could borrow to build our dream home.

Preparation is the KEY

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