Monaco 28 with modified Contemporary Facade

Monaco 28 with modified Contemporary Facade

Wednesday, 31 August 2011

Base Price versus Full Price

One of my questions when embarking on this project was 'what is it really going to cost'?
The Reps will always say 'it depends on what you want to include' and in part it is true, but the reality is the base price is bogus and it is ridiculous that they can even use it as there would never have been a home built without some extra costs.

For the record, our final tender ended up $130k over the base price of our double storey home.  This included a fair bit of site costs including a split in the home, BASIX and approvals, air con, optional alfresco, floors and driveway, and quite a few decorator inclusions.  On a flat (<500 mm fall), non-saline block we might have done it for +$100k.

Our No 3 Tip to date - factor in a hefty spend above the base price.  Pour over the inclusions and try to think of everything that is not included or will probably need to be upgraded.

We are yet to do the colour selection and electrical appointment so although we have included provisional allowances for upgrades, I won't be surprised to end up spending more.  We will wait and see...


We sent off emails to both Builders telling them that they were really expensive and listed the features that the other Builder was beating them with.  I also expressed some concern with Fowler Homes about their attention to detail after the tender fiasco.

Fowler Homes assured me the error was a one-off (a few pages got lost in the fax machine) and threw in for free a few of the things that Wisdom had in their upgrade package.

Wisdom Homes refused to negotiate.  When I told them that we were going to walk they rang the wife and asked for a copy of Fowler Homes' tender so that they could be sure it was a fair comparison.  They said that they would match Fowler's tender and take $1,000 off.  She told them that we wanted their best offer, not just $1,000 better, and that we would not give it to them because then we were giving up our competitive position.  They then rang me to see if I'd break but I held firm.

In the meantime we went back to Fowler Homes and told them that Wisdom Homes had given us more and dropped their price.  Fowler gave us a few more things which gave them a couple of grand price benefit and some nicer features.

Our No 2 Tip to date - there is room to negotiate (with some!)

Wisdom Homes had presented very professionally and we felt confident that they would do a good job.  Their unwillingness to negotiate lost them our business.  I get the feeling that they are doing a lot of work already and didn't need to chase our work and blow their margin.

On the other hand, Fowler Homes presented less professionally and we knew we would need to ride them but we were going to get more for our dollar and for this we were prepared to do some hard yards.

Fowler Homes it is...

The Fowler Tender

Starting the Fowler Homes process was far more laid back - our requests were recorded on a scrap of paper... We had to put the heat on to get their Tender within the 3 weeks promised.  It was presented in one of the display home sales offices, open to other customers and disruptions.  We turn to the first page to see that the split was wrong (tall at back, short at front, despite a block sloping to the front).  Then we find that 80% of the inclusions that we had asked for had not been priced. Very disappointing and frustrating.  The Sales Rep was apologetic and promised to get it corrected quickly.  This was a Saturday, we got the update on the Monday.  Almost exactly the same as Wisdom Homes ! The Rep also let on that there was room to move.  Despite their error, Fowler Homes were in the game.

The Wisdom Tender

Wisdom Homes spent forever handwriting all of the details to include in the tender, very meticulous. They completed their tender within the promised 3 weeks and presented it at their head office at Narellan.  It was very professional and well explained.  It was close to the original indicative quote.  Wisdom Homes' rep recorded any variations that we were interested in exploring and talked us out of a few things that were obviously going to be unrealistic.  We explained that we were getting other tenders and asked if there was any room for negotiation.  We were politely told 'no' and I have to say we were skeptical.  They then came back with a revised tender via email within a few days.  At this point we thought it likely that we would be going with Wisdom Homes.

How it all started (with Pic)

After battling with an older home for a few years we wondered whether we could afford to build.  We were always wary of the base price vs actual price unknown and assumed it would be out of reach.  We took the plunge and got an indicative quote from Wisdom Homes ($0) using the contour plan of a block of land in an area that we liked.  Here is a dodgy panorama from the block.  We liked the elevated location and the green views.  Also the area was nicely established and family oriented.

Panorama from our block

Even though it was a bit slopey we were surprised to find that it probably was within our reach and we felt that Wisdom Homes had been thorough and honest so we put our home on the market.

Lucky for us our home sold on the first day, $50 above the list price! The wife had really played the Agents against each other to get a low commission too so we were off to a great start.

We signed on with Wisdom Homes for a tender ($700) as we liked that their homes had good open plan access onto Alfresco areas and were small enough to leave us some yard space.  We were keen to tender with Eden Brae but all of their designs had way too big a footprint.  We got indicative costs from Clarendon Homes who were cost competitive but their designs weren't quite right and their tender was pricey ($1,000).  Finally we found Fowler Homes who use the same architect as Wisdom and chose to tender on a house that was almost exactly the same - hopefully a good 'apples for apples' comparison.

Our Number 1 Tip to date - get at least 2 tenders as the Builders will realise that they have to give you competitive pricing.  We had a friend who was quoted $40k in site costs.  When he walked they knocked $15k off without blinking an eye but he ended up buying something established he was so turned off.