If you are toying with the ideas of building a new home, having renovations made to your existing home or having a new dwelling added to your property there are a number of things to consider. One of the big things that comes up with the payments and how much it is going to cost. There is a process that most builders follow to some degree, that helps keep it all organised and transparent for both parties. This way you know from the beginning what to expect throughout the build and the builder themselves are also covered throughout. Check out below the payment process and what the builder will expect.
The first step is that the builder should come out and find out exactly what it is that you are wanting to get done. Once they have taken all the information, measurements and requirements that you have, they will put together a detailed quote for you.
This quote will provide you with a layout of everything that is to happen through the build and the costs involved.
Once you have gone through the quote and are happy with it, it can be approved. An approved quote and contract should be drawn up and signed by both parties.
Once you have signed your contract and are ready to get started, a deposit is normally required.
This deposit is to secure your project and ensure that any materials that the builder needs to purchase to begin the project can be purchased. The deposit is normally non refundable. So if you decide after paying the deposit that you no longer want to proceed, you will loose these funds. So ensure you are 100% sure that you want to go ahead before signing and paying.
There are requirements and restrictions on the amount that a builder can ask for as an upfront deposit. Normally 10% – 20% of the total cost is the amount requested as a deposit.
Depending on the size of your project, it may be written into your contract that progress payments are required at different stages.
These can be to cover materials that need to be purchased or as security if the project is a large one that takes both a long time and costs a large amount of money.
The details of your progress payments will be detailed in your contract that you sign. Ensure that you read over it fully and are aware of when you will need to take payments.
Progress payments can not be charged to the full amount of the job. There needs to be at least 10% of the final amount that is due on completion of the project.
Once the renovation or new build is completed than it is time for the final payment.
Before making the final payment, it is important to do a check of the renovations and ensure that everything is completed and that you are happy with it all.
If there are any concerns that you have, it is important to raise them with the builder before accepting the handover and making the final payment.
Communication is important and the more you speak with them, the quicker things can be rectified.
It is important to remember that you builders are still human and still have families at home to feed.
So if you agree to a quote and sign a contract, stick to the payment terms and make payments when required. They are working hard to complete this for you and deserve to be paid on time.
Check the invoice for their payment terms and if you are unable to make payment within the time frame, speak to them as soon as possible to discuss your options.
Non payment can result in your renovations being delayed, legal action being taken and the builders refusing to finish the job.
Work together and communicate well and you should have no issues with the project progressing and being completed.
Remember, you wouldn’t like it if you went to work for a week and then your employer decided that they didn’t want to pay you on time.
If you need to arrange finance for your renovations please speak to Vital Finance Group to see how they might be able to assist you.
Also head over to our directory to find a builder in your area if you are still looking for one.