How To Avoid Budget Blow-outs!
Contracts often include ‘industry terms’ that may be unfamiliar.
For example, the term ‘Provisional Sum’ is often used when a particular aspect of the work is undefined and not fully costed. Another term, ‘Prime Cost’ refers to items that have an allowable budget but may be interchangeable (things like vanities, baths, doors etc.) What these terms really mean is… The Price May Change For example, if earth-works is listed as a Provisional Sum item, you may end up paying way more than the base rate (depending on the difficulty of the work). Or if certain elements of your design (e.g. bathroom basin and plumbing) are listed as Prime Cost items, they too may increase in cost depending on the market price and availability of stock. Think about why many builders do this: If products become difficult to source during the building process, they can make substitutions without your consent. If a substitution costs more, it doesn’t affect them – you’re the one who pays. This is perfect for the builder. But it can be disastrous for you because you may end up paying way more for things you don’t really want. So be sure to… Read and Understand Every Word of Your Contract… …especially any ‘industry terms’ that are unfamiliar to you. If you’re not sure about something – ask. And don’t sign anything if it does not specify exactly what you want your home to be. That means no Provisional Sum or Prime Cost items.