How To Not Overpay For A New Build Property: Part 3/4
Build a new property is confusing and expensive and many people overpay as a result. The expert tips of how to not overpay for a new build property.
Hey guys! Ryan here from OnProperty.com.au helping you find positive cash flow properties and this is video number 3 in our 4-part video series on How To Build A Property. We are helping you guys understand exactly how to build a new-build property, the biggest mistakes that people make, how to not overpay for a property which is exactly what we are going to be talking about in today’s episode.
We have looked in video number one at Choosing The Correct Property: looking at the right area, the right suburb, getting the right development, getting the right site, and building the right design. That was video number 1.
So we talked about that which really gave us a good understanding of how to do research. Video number 2, we looked at The Biggest Mistakes That People Make When Building A New-build Property. In this video we are going to talk about how to not overpay for a property. And I have with me my new-build property expert Ben Everingham from Pumped On Property.
Ryan: Hi Ben and welcome back!
Ben: Good day Ryan! Good day guys! Thanks for having me back.
Ryan: Okay, now Ben has worked as a marketing manager for a massive building company and sold, what was it? Over a billion dollars in the least year you were there?
Ben: Yeah. The company did a billion dollars of revenue. Yeah.
Ryan: But not you. You are not the billionaire yet.
Ryan: He is financially free through his investments and has built some himself. And he now helps others build new-build properties as a buyer’s agent. So we got him to get his expertise today on how to not overpay for a property.
So Ben let me first ask you, do you think there are a lot of people out there who do overpay for new-build properties?
Ben: Definitely. I was on the web the other night with a huge amount of people. We actually polled the audience and over 50% or 60% of those people said that they thought that they have overpaid for property in the last 12 months. So that was pretty significant.
Ryan: Yeah. And I definitely have friends of mine who bought new-build properties and overpaid for that property to the point where 5 years later the property was worth less than what they paid for it. And so it is a big issue in this industry. As I said in previous videos, I do not really understand this all that well. And so if I was to go into it, I would not know what to do, what not to do and so these videos have really been helpful for me.
So what we wanted to cover in this video is just a bunch of steps that you guys can take to avoid overpaying for a property. Do you want to go through those steps Ben? Or should I go through them?
Ben: You just want to run through those, if that is okay.
Ryan: I will run through them quickly and then I will drill Ben to get the answers and more details on this stuff.
So what we wanted to do, the first step was to actually find the land first rather than looking at those house and land packages. We wanted to do the research to identify what type of property we want and to what level. We wanted to learn how to compare apples to apples and if that does not make sense to you, do not worry because it does not make sense to me. But Ben is going to explain that to us.
We want to get quotes from a range of builders and look at a range of builders, not just one. Once we choose a builder, to be loyal to that builder. We do not want to sign off without a fixed price. And then we want to realize that we can negotiate and this is actually an easy industry where you can negotiate on price.
So let us talk about the first step: buying land first instead of buying a package. Why would someone buy land and then source it rather than buying them together?
Ben: There are a couple of reasons. The number one reason is when you buy land on its own it means you are generally going direct to the developer. The developer is obviously making their money and the sales consultant selling the land for the developer is making their commission but it is just as cheap as you are going to possibly get the land unless you personally know the developer and they are giving you a favor.
So that is the absolute number one thing and generally when someone else is bringing you a piece of land, there is generally something in it for that person so the builder is even getting a cut off the developer or a property marketer or somebody else is getting – they have some sort of vested interest by bringing you that product as a third party as opposed to going direct.
Ryan: Yeah, I think people need to understand that this industry is not as transparent as I would probably like it to be. People do not come to you and say, “Here is a house and land package. Here is how much I am making in this deal.” They often come to you as a “property advisor” and say, “Look we are doing this free service to you. Absolutely free.
Out of the goodness of our hearts, we just want to help you.” And what you do not know is that they get $50,000 in commission baked into that deal which is pushing the price of your property up $50,000 which is making you overpay for that property. And so basically by buying the land first – and then we are going to go through by looking at multiple different builders, you can really get an idea of how much that is actually going to cost.
Because if you ask me how much does it cost to build a house. I know some rough guides but I do not understand how building company works, how its margins work, how it makes money. And so I am not going to know if someone comes to me with a house and land package for $450,000, is that a good package? Is that a bad package?
Ryan: I think the best way to do it is really to get the land first and then just look at multiple different builders. Would you agree?
Ryan: Alright. So how would someone go and look at land? Like if they are driving past the highway they see like an ad of a house and land packages for $450,000, how can that person then go and source land for themselves – just the land, and skip out the package?
Ben: Yeah. Beautiful Sell. A lot of the developers will partner with the builder to put a package because it is easier for people to wrap their heads around because as you said most people do not know the true cost of building or what they could potentially buy it for. So the easiest way is to find out who the developer is of that piece of land. It might be Stockton’s, AV Jennings, it might be a little local guy. Go and speak to the person in the sales office or..
Ryan: How do we find out who is selling the land?
Ben: Sorry. Most of those people, most of those ads will have basically the name of the estate. It might be Peregian Springs for example on the Sunshine Coast or it might be whatever anywhere else. It is just a matter of jumping on Google, looking at the name of the estate that they are selling because every state has its own name independent of the suburb and then finding the page, all of these guys set up their own websites and then giving them a call or going in and speaking to them from there.
Ryan: Yeah. So rather than calling the number that is on the banner that you see driving past, look at the name of the estate, Google it, and try and find the company that is doing the land and then give them a call and talk to their sales agents.
Ben: Yeah, exactly. Even though it might be a big company that is doing 15 or 20 projects Australia-wide, that development would be run by a local team of sales agents and it is going and speaking to those local sales agents specific to that actual development.
Ryan: Okay, cool. So find land first. We then talk about – you said you want to identify what you want, what do you mean by that?
Ben: In terms of the number one mistake, we touched on this in the second video a little bit, that most people make is really about not understanding clear enough exactly what they want before they go and speak to the developer and before they go speak to the builder. So the more clarity you have the less chance you have of getting ripped off, I suppose, and the less chance you have of being taken away from what it is you really want and what the market wants to what the builder or the property marketer generates for you to buy off them.
So in terms of really narrowing that down, the simplest way to do that is to look it up the builder’s products and go, “I like this floor plan for this reason and I like this floor plan for this reason. Let us take those both to a number of builders and then get them to price up those designs so we can begin to compare apples with apples from that perspective.”
Ryan: Yeah. I think we talked a lot about this in video number 2 but basically knowing what you want for the area means not trying to overcapitalize and spend too much or undercapitalize and not spend enough but to begin to understand what do people in the area want so we can build a property that is kind of in the average, maybe slightly above the average of the area. And so do your research, talk to real estate agents, talk to the developer in the area of what people are building.
Look at the area if there are already some built and then as Ben said, go on a bunch of different websites on the internet, look at different houses, different floor plans, and get an idea of what you want your house to be like and then present that to builders.
And basically what we are trying to avoid is people going to builders saying “Yeah, I want to build a house” and then that is it because then the builder is going to say, “Okay, well let us try and push them towards our more expensive product because we are going to make more margin on that. We are going to make more profit on that.” So if you do not know what you want to buy, they definitely know what they want to sell and they will move you towards that.
But if you know what you want and you have those things in mind then you can really direct the conversation and direct the project towards something that you know is going to be suitable for the area. And I think this really comes back to just being an active investor and doing a research and understanding the area and then trying to get something that you believe is going to be good for the area.
Ben: Yeah. And to add to that, I think that is a really important point you just brought up. In terms of being an active investor, an active investor is going to know what they want and why they want that product. So in the building industry – and this is something that is rarely unspoken of to people outside of the industry, builders will charge you a pain factor so if they think you can be a pain in their bum, they are going to charge you a higher margin than someone that is going to be easy.
And also a simple sale for a builder rarely occurs especially a person buying their first property or building their first, second, or third properties; those people take longer to make decisions so if you can go to a builder and go, “I want x. I want your best price on x.” That builder is far more likely to want to go, “This is simple. This guy knows what he wants.
This guy is actually educated. I am not going to be able to get away with ripping him off on price.” And if that person, if you are prepared to move forward faster, that is when you have the most potential like if you can say, “I am going to come in, have a couple of meetings with you, and then sign up.” That is the time when you get the concession that is when you get the negotiating power. Not if you are that guy that spend into the builder 15 or 20 times changing their design around before they have even put their money down.
And the builder feels he need to recoup 10 grand worth of costs in terms of staff time just to get you back to a level playing field, to get you the same product that you probably could have decided off in the first couple of meetings if you listened to the builder anyway.
Ryan: Yeah. Okay, so go in with the idea of what you want. Try and be as easy as possible to deal with and then hopefully you are going to get a better price on the product.
And so the next thing that we want to talk about is comparing apples to apples. What do we mean by this?
Ben: Yes. So the most challenging thing to do in the building industry is to compare company A versus company B. And so the reason that is challenging is because all of their quotes look different, all of their inclusions look different, and all of their costs for certain line items when you see like a 3- or 4-page quote which you know, a line item might be slab, soil test, roof, blah, blah, blah inclusions. So what we really want you to do and an educated investor will do, is have a checklist where it has the things that need to be in the quote that you need an actual price or a line item for or if you cannot get a line item price for that item then at least knowing that that is included in the fixed price quote and then being able to compare builder A’s quote versus builder B’s quote and making sure that all of those things you want in that particular design with that builder have been priced up so you can go, “Well, builder A costs $400,000 to build a 400 square meter place.
Building B costs $500,000 to build the same product. Why?” And if the builders do not have a substantial reason for why, it just means that they are making most of the time more profit or they are running on more expensive business with overheads and they have to pass those costs onto you as a consumer.
Ryan: Okay, so do we get these quotes like if we are asking builders for quotes, do they provide us with like a 4-page quote or something that has all the line item on there? How does it work?
Ben: So generally you get an initial quote which is a price for this design which is very simple. And then as you begin going down on that process and begin to identify exactly what you are looking for and what inclusions, levels that you like, that is when you get a more substantiated broken-down price. Most builders will not want to give you that before you deposit with them. But I say do not deposit with a builder unless you can actually guarantee a fixed price and compare that builder against the other builder that you are looking at.
Ryan: Okay, so I am just trying to think about this from people’s perspective, if they are going in – because we want to go in knowing what we want, right? But then what is the best way to talk to these builders to say this is exactly what we need to compare you to everyone else? Do we need to say we need a certain type of quote from you? Because I am getting a bit confused, that is all.
Ben: Sorry. So..
Ryan: Because you are saying there is a first quote and there is second quote but we want the second quote – the more detailed one, how do we, I guess, force the builder to give us that more detailed quote?
Ben: Generally you never want to go to a builder and tell them that you are looking at buying with anyone else because generally from that perspective there is no – in terms of normal negotiation, you should be able to go, “I am looking at 2 options” and that should hopefully hold people accountable. In the building industry it just means that the time they spend on you might not actually turn out to be a sale and so that means if they are going to give you a higher price then they are not going to look after you and they are not going to get you that information you need.
Ryan: Okay. So keep that mouth shut about shopping elsewhere.
Ben: Keep that mouth shut about shopping elsewhere if possible.
Ryan: Okay so we do not want to tell them that we are shopping elsewhere. How do we then get the quote that we want without saying that?
Ben: Yes, so in terms of getting to that second quote, to do that you really need to identify exactly what you want to build in terms of how big that is going to be, what sort of design and what sort of levels of inclusions. And the simplest way to do that will be like what Ryan and I are sharing a checklist with you guys in video 4 and that checklist will enable you to, I suppose, look at everything that should be included in the building contract – fixed price building contract. And then you will be able to look through the builder’s quote and go “I cannot see that this is included.” Go back to the builder and say, “Look, these 5 line items are not included.
Can you just confirm that either are included or if they are not, what cost to me that item, is that going to cost after we get to that next stage?” Because builders are notorious for leaving out information in their quotes.
Ryan: Do they leave out information so they can charge you more? Or just because they forget?
Ben: No, because it is just most people have no idea where the money is going on a $200,000 product. They are going to make more money on certain line items, less money on other items and 80% of the builders in the industry in Australia will sign you up on a cheaper product like we discussed in video 2 and then after you have deposited with them and you are moving forward and you feel like you cannot walk away then they will jack the price up for all of these items. So before they do that, we want you to be proactive with your checklist and just go everything that should be included is included in this quote that feels like a fixed price contract for us.
Ryan: So do we get that first quote from them and then we email them back and say that we need to understand the breakdown of these items?
Ben: “Can you please give us a breakdown and I just wanted to reconfirm that this, this, this and that as per the checklist is included in this quote.”
Ryan: Okay, so cool. So basically what I am hearing is that you go to a builder. You receive a first quote which is like a bit fluffy like it is not really a solid breakdown quote. And then you would then respond to the builder saying, “Great. Thanks for your quote. Can we please get a breakdown of everything and make sure that these things are included in the quote?” And is that the point that we want to talk about being fixed-price?
Ben: That is where you are trying to get to with that second quote, an absolute fixed price. If you can possibly do it, the better place to have this conversation is in person because you will see the builder beginning to get uncomfortable and you have to read their body language if something is not included, it is easy for them to tell you over the phone that it is. But if you see them in person and you begin to read that person then you will be able to start finding out the differences in their story that do not stack up over time.
Ryan: Okay. I am just trying to get a step-by-step for people because a lot of people will get very nervous in negotiation and as you said, people do not like confrontation so we just have something that is simple for them. So basically you are going in to see the builder in person and you are talking to them before you have even gotten a quote saying “I want a fixed-price contract. Can you provide me with a quote?” And you are talking through that with them?
Ryan: And then you get the first quote back and that is when you are saying “Can I get a breakdown?”
Ben: Yeah. “Can I just please confirm that soil test were included or driveways were included or floor coverings were included.” You know the things that I generally leave out of a contract which will be included in that checklist that we share in video 4 and those things. They are either going to go “Yes, they are included,” or “No, it is not.” And if it is not included, you are asking for a price for that item so that you can add that to the total price and end up with a fixed-price contract.
Ryan: Well and then I guess you have said to them upfront I want a fixed-price contract and so then when you are going back to them saying “I need pricing on this,” you kind of set that precedent that I want a fixed price. And so then you can talk through with them on how much you are going to charge me for a soil test, how much are you going to charge me for floor coverings, and you can go through that with them because you have already set that precedent that you want a fixed price.
And as you said Ben, not everyone is going to want to give you a fixed price so it may require you to shop around to multiple different builders but we definitely want a fixed price. Do we want to quickly go through why we want a fixed price for a property?
Ben: Yeah. I think that is a really good thing that we begin to discuss. So the reason we want a fixed price for a property is one, you are an investor. You need to understand your total cost of the project you are undertaking so that you can compare that with market values and make sure that you are not overpaying for a product that the market is not going be responsive of. A good example of this would be building a property worth $700,000 in the ACT when the average price of products in the area is $600,000.
So the reason we want a fixed price is because it wants to give you a certain lease invested around your numbers on; two, you do not want to pay above market rates; and three, from a cash flow perspective your bank is not going to love it when you rock up and go, “Hey, we thought we have a fixed price but the builders just asked me to come up with an extra $50,000. Can you do that?” and then the banks say obviously, “No, we cannot do that. You have hit your servicing limits.”
So there are a lot of risks associated with not getting a fixed price, the major one being that the builder is going to ask you for more money at some point either at the start of the build or at the end of the build and you are going to have to find a way to come up with that money which can put you in a very vulnerable position.
Ryan: Yeah. And so people definitely shop around to get a fixed price. We also want to mention looking at different builders. How many builders would you look at and do we want to look at big companies? Or do we want to look at local builders? What is the best strategy?
Ben: Generally, it really depends for every person is different. A really good place to start would be to look at the top 10 builders in the state. The easiest way to find that is to just Google HIA Top 100 Builders Report and in every single sate in Australia it will have the top 100 builders and how many homes they have built in that state in the last 12 months.
Generally there are all types of builders so people think that building with the local little guy who has been building 3 homes in an area a year in the community is a good decision because you are going to get a better experience. Most of the time you are going to end up paying an extra $50,000 or $100,000 than you would have for the same product from someone else because that guy does not have buying power.
They do not have any leverage with their trades because their trades are not full-time workers for them. There is just a huge amount of extra cost that you are going to pay by getting that boutique experience. The builder could go bust and you could be left stuck.
In terms of going with some of the bigger boys, there are three types of big guys. The really really cheap guys that just churn and burn business models which do not really care about you, you are just another number. They are going to build the product that they want, not the product that you want. You are not going to have any say. There are the guys in the middle which most of the time, genuinely do care about you. And there are the guys at the top that have incredibly beautiful-looking homes that you are paying $50,000 to $100,000 premium for because of their marketing and not because of the quality of their product.
Ryan: Yeah. So who do we want to go with? The guys in the middle, I am guessing.
Ben: Yeah. Most of the time I think the guys in the middle are the only ones who are going to give you the fixed-price contract.
Ryan: And do we identify the guys in the middle just by the types of houses we can see on their website?
Ben: I like to identify the guys in the middle by one simple question: how many homes did you build in this state in the last 12 months? And the sweet spot for a guy in the middle is anywhere between 50 and 200 homes. It is your standard sort of guy in the middle.
Ryan: Okay. Alright. And how many of those builders would we want to get quotes from? Now remember guys, like we are not telling each builder that we are shopping around. I just want to remind you but yeah, how many are we kind of looking at? Like 3? Is 3 a good number?
Ben: I like to go 3. If you have the time, you like to go for 5 because 2 of those builders – personality-wise, values-wise, you just want to learn with and so whatever price they give you is not going to be meaningful because you are not going to use them. So you really want 3 guys that you have identified that you would potentially use and you are trying to get to the best price point for those 3 guys.
Ryan: Okay. So you are kind of visiting 5 and then getting a feel for their business and chucking out 2 of that you do not really resonate with and then trying to get quotes from the 3 remaining people.
Ryan: Yeah. So you really want to find like 3 companies that you would be happy moving forward with either of these 3. And now it just comes down to price.
Ben: Yeah. I mean there are 2 ways that you can easily do this one. One way to identify the builders in terms of price before you go in and speak to them is jump on realestate.com and click on the new homes tab for the suburb that you are going to buy in and those builders will have put either house prices or house and land prices into there. So you will begin to get a feel for what type of price – that this is the cheapest price they are going to offer you by the way.
It is a marketing price to suck you in the door. It is not the natural price that you buy the home for. But it will give you an indication of what they are doing so you can begin pegging builders out.
The other one is to just jump on product review and search the builder’s name. And then that will be feedback from hundreds of customers for that builder and it will be very brutal. It is either very good or it is very very bad.
Ryan: Yeah. You just want to try and find the one that is not super horrible maybe.
Ben: Yeah. And you will find people will be like, “I paid $200,000 for this property. The builder charged me an extra $50,000” and then you know they are not the sort of people that are going to give you the fixed price.
Ryan: Cool. And so I guess there are 2 more things we want to talk about. Once you choose a builder, being loyal with that builder. Is there a reason for that? What do you mean by that?
Ben: Yes. So no one is really going to look after you until they know you are a real potential client. And the reason to be a potential client, the majority of people that I know think they are price shopping the market by talking to all these builders and playing them off against each other. In reality, the builders are far too smart because they know everybody is going to come in and do that like used car sales people do or sales people in car dealerships do.
So the best way is to once you have done all of your due diligence and you know who you are going to work with, just commit to working with that person and then aim to get the best results from there because that is when you are going to get your price discount. That is when you are going to get your free upgrades or inclusions because you have a real relationship with that person. And someone that knows they are going to make $40,000 off of you from a $200,000 build is going to be far more likely to go that extra mile for you than 3 guys that you actually think you are price sopping when in reality they have charged you a 30% profit margin when they would have sold it to you for 16% if you were just a nice guy.
Ryan: So really we are getting out 3 quotes from 3 builders. Do not try to be too difficult so we do not get that pain factor in there. And once we have decided who we are going with, really communicate that to them that, “We are going to go with you and we are just kind of doing final negotiations to see if we can get a little bit more of a discount or free upgrades.” Is that what we are talking about?
Ben: Yes, like, “we have decided, we have talked to 5 builders and we cut it down to 3. We really want to work with you. For us to work with you, this is what you are going to need to do for us.” And then sharpen your pencil basically.
Ryan: Yes and so then they know that you are very close to a sale. You are very close to them making a lot of money out of you. And so really yeah, you can negotiate more strongly whereas if they think if you go in and you say, “I am still looking at 3 different builders. You need to sharpen your pencil,” and they are like, “Yeah but you will probably go with someone else. Why would I bother?” If you are like, “No. I am committing to you but I just need this,” then they are more likely to say “Oh yeah, okay.”
Ben: I have 2 really funny stories to tell. We have time to tell them quickly?
Ryan: Yeah. Yeah. Let us go.
Ben: So for my experience in the building industry, there was a builder in our company that ended up jumping up levels into the corporate office and he was an incredible guy. He built about a hundred homes a year in a small regional area, which was huge. He had this bloke come into his office one day that was shopping around. And basically he walked in and said, – it was a $300,000 build, and he said, “If you cannot build it for $290,000 I am going down the road to build it with someone else.”
The sales consultant went to his boss and went, “he was on the line, who cares about the $10,000. Let us get him over line.” The boss comes out of the office, walks to the guy and goes, “Sorry mate. I have just made a mistake on this building quote. The quote that we provided you for $300,000 was wrong. It is actually $320,000.”
Ryan: Sorry the quote was wrong it is actually what?
Ben: “The quote was wrong it is actually going to cost you $320,000 to build now.” And the guy was like, “Oh my God! What is going on? This is bullshit!” And he was like, “But if you sign up today for $300,000 I will give it to you.”
And so this is what people do. They walk in thinking they have control when in reality the builders are going to sell you for the price that they wanted to sell it to you for. And the more receptive you are to working with them and knowing, I suppose, what they are prepared to do and not prepared to do. You are not going to get much more than of a discount than the cost of building a house plus 16% is the minimum a builder needs to make just to keep its doors open like the margins are very fine.
The second thing that I learned is the most vulnerable time for a person when you are negotiating with them in the building industry is when the sales consultant and the builder think they have made the sale. So by you going “we have chosen you, we just need to fix a few things,” that is the time when they are prepared to give you the most concessions and price discount because in their mind the sale has already been made and they are thinking about the profit in their pocket now.
So they are 2 lessons that I have learned. Do not try and negotiate because it is not going to work price-shopping around and pretending to do this and that. And secondary to that, the vulnerable time for the builders is when they think they have got you as a customer.
Ryan: Yeah. And I guess you do not want to get so far passing like “I am going to go with you, just this few things” and then they tweak them and you come back and you are like “I am going to need another $10,000.” Then they might just be like, “Whoa. Go away.”
Ben: It needs to be a win-win for everyone because in reality the builder is going to be with you for the next 9 months. You do not want to stuff up your relationship arguing over $5,000. It is not even matter at the end of the day.
Ryan: Yeah. But I think it is important for people to understand that they can negotiate. They just need to be very careful about how they negotiate. And I think you have covered that off perfectly because that is slightly different to whether you are buying a new car or something and you are looking at 2 different dealerships and you are trying to price-shop them against each other compared to a home where as you said, they are going to be with you for the next 9 months.
So I think that pretty much covers it, How To Not Overpay For A Property. The first way, as we said, was just buy the land yourself and source the builders yourself which will be a bit of extra work but it is more about being an active investor and make sure that you are getting the right product for the right area and paying the right price and not overpaying. And if you go to a property marketer, expect to be charged commissions even though it is a free service.
Expect that you are potentially going to overpay for the property especially if they are providing you with things like rental guarantees. Then you are just going to either be buying a dead product or overpaying because no one should have to provide rental guarantees to sell a property. To me that is just an indication of they are just trying to sting you.
So find your land first. You then need to identify what you want by researching a bunch of different sites, choosing the right layout and the right kind of spec for that area, try and compare apples to apples and we talked about that with the quotes. This kind of blends into a lot of our things like we want to look at a range of builders, we want to compare similar style quotes so we can see exactly what they are charging and why. But then we want to find people that we are aligned with and once we have chosen, stick with that person and I guess let them know, “I am negotiating with you because I want to go with you.
I just need a couple of things fixed up.” And then just be careful not to go too hard because they do have margins to work within that if you push outside of that then you are just too difficult and they will even raise the price on you.
Ryan: Is that basically it? Is there anything else we need to cover for people to avoid paying too much.
Ben: One really quick thing – sorry, which I should have talked about before is quite simply: builders will suck you in with a low-price point and a huge amount of upgrades. So the number one thing in the building industry is that there is no free lunches. You never are going to get something for nothing off a builder so somewhere, either in their margins or in their pricing model, whatever they are giving you away for free has been completely calculated at their regular margin. And so just remember that if someone is giving you $100,000 or $50,000 worth of free stuff, it is not free.
It is just included in their overall pricing and if they are not already going to get you upfront with it, they will get you at the end with it.
Ryan: Yeah. And again, that is why we wanted the fixed price and why the fixed price is so important so they do not sting us for it after we have already paid the deposit or built the slab or invested a lot of money with them already.
Ben: Yeah. Sorry, things keep coming into my mind as we talk as well. The other last thing is that every time you make a change after you have signed off on that final agreement and you have a contract and you have settled and you have decided that that is builder, is going to cost you money. So you change rooms, you change design, you change upgrades, that is when they are going to sting you for extra money as well.
Ryan: So you want a fixed price. You want to know what you want and you want to stick with that.
Ryan: Because if you are changing then they kind of got you over your bowels like well if you are like “I want to change the room” and then they will say “it is going to cost this amount.” And if you want it done, they could increase their margins on that and you do not really have a choice because again, you have already signed up and you have this fixed price contract in place. It is kind of your fault for changing it and so they can make more money off you that way.
Ben: Yep and as it is extremely time consuming and painful for builders to change their entire schedule for one minor little thing that you did not think about at the start
Ryan: Definitely. So try and think about it ahead of time. Well, that finishes up for video number 3. In the next video, we are going to go through a bit of Ben’s service as a buyer’s agent for Pumped On Property. And we are also going to go through the steps that you need to take in terms of building a property and what needs to happen as you go through those steps.
So if you have decided that “Yes, I want to build a property. I do not want to make the mistakes that we talked about in video number 2. I do not want to overpay and I do not want to negotiate. But now I just need to know what is the type of process that I need to go through to buy the land, in order to get the build done and all of that sort of stuff.” That is what we are going to be covering in video number 4 as well as how Ben can help you guys if you need some extra help in order to make this happen because of his experience. He actually has an awesome service and we will talk more about that in video number 4.
So thanks so much Ben. This has been a great series so far. I have been getting heaps out of it and I think everyone will be as well.
So until next time, thank you very much!
Ben: Thanks a lot guys! Cheers Ryan!
Ryan: Alright guys. Until video number 4, stay positive!
DISCLAIMER No Legal, Financial & Taxation Advice
The Listener, Reader or Viewer acknowledges and agrees that:
- Any information provided by us is provided as general information and for general information purposes only;
- We have not taken the Listener, Reader or Viewers personal and financial circumstances into account when providing information;
- We must not and have not provided legal, financial or taxation advice to the Listener, Reader or Viewer;
- The information provided must be verified by the Listener, Reader or Viewer prior to the Listener, Reader or Viewer acting or relying on the information by an independent professional advisor including a legal, financial, taxation advisor and the Listener, Reader or Viewers accountant;
- The information may not be suitable or applicable to the Listener, Reader or Viewer's individual circumstances;
- We do not hold an Australian Financial Services Licence as defined by section 9 of the Corporations Act 2001 (Cth) and we are not authorised to provide financial services to the Listener, Reader or Viewer, and we have not provided financial services to the Listener, Reader or Viewer.
"This property investment strategy is so simple it actually works"
Want to achieve baseline financial freedom and security through investing in property? Want a low risk, straightforward way to do it? Join more than 20,000 investors who have transformed the way they invest in property."