A common theme that emerges from our visitor feedback, is the understanding of why pricing seems to be so varied between Builders. This is our attempt to clarify a few common aspects about the sales process:
1) Pricing the house on a per-square rate.
This strategy probably works best as a rough guide only. The two major cost elements into your house are the structural items and the inclusions. The inclusions are visible, so price comparisons can be fairly transparent and accurate. The structure not so much. Standard designs from major builders will have a very lean and efficient structure, to keep costs down to a minimum. Block on Block designs, single roof design, etc. all contribute. This is where custom designs may lose out on. To achieve the design modification that you consider perfect for yourself, we may have to include structural elements like Iron Beams, Complex truss designs etc. This cost is not easily visible to the customer, hence the price per square rate strategy may not apply.
2) Bait Pricing
This is a strategy used to attract customers by luring them with the thought that they will have to pay less for something that costs more. This is often achieved by stripping the house down to the bare minimum needed for an Occupancy Certificate. Although there may be customers who are looking to buy such a product, we haven’t come across very many.
Most builders will price their houses at this minimum, so that they don’t lose out in a basic comparison. If the customer gets it in their mind that the builder is too pricey, it is never a good start. Most builders will then have an inclusion list that the majority of their customers will be happy with. This is probably a better start for comparisons. Also it is very important to factor what is not included. An advertised special may list all the wonderful items that are included, but the bite most certainly is in the items that are not. We have had feedback stating the major cost factors to be in site costs, driveways, cooling, minor customisations, etc. We have also seen quotes from other builders also charging extra for construction costs (scaffolding and temporary fencing!!). The only way to then realistically know what your true costs are, is to get a comprehensive quote on the product. Naturally this is going to be time consuming for both you and the builder, so it makes sense to go through this process if you are interested in the product offering.
In our next blog we will go through a few more of these points, to try and clarify them for you. Feel free to call us on 1300 722 703 if you need any of these points to be further detailed. And come visit us at the InnoHomes display home at 4 Clovelly Way, Officer, Vic. 3809 to see what this new approach to home building is all about.