With cost being such an important factor in the home buying process, it’s important to understand what this term actually means, and how it will implicate you and your purchase.
When we’re talking about building your home, fixed costs is the pricing model built into your contract. It means that there is a price decided on together between you and the builder and that price won’t change, regardless of delays, extra materials required or anything else that may happen in the course of your build. The builder will absorb all these costs.
In many contracts there will be approved variations under the contract. For example, if the buyer upgrades to a more expensive option during the course of the build, then the additional cost would be added to the fixed price.
There are many reasons why buyers seek the added security of a fixed price contract when purchasing their home. Firstly, when customers know what they’re going to be paying it can make day-to-day life and budgeting much easier, as you do not have to take into account costs that may or may not come up. Fixed cost contracts will also make your life easier when you approach the bank for a home loan. As fixed costs provide more certainty the loan approval process is generally much easier.
Thirdly, by choosing a builder with fixed costs you’ll be giving yourself more peace of mind and security. Any cost blowouts will fall to the builder, not you. This means your home will always stay within the budget you set.