10 Tips for minimising variations on your New Home Build

Worried about variations blowing out your build budget? Fair enough, I get it!

There are things you can do to limit and in some cases avoid variations on your new home build - but first, let’s chat about what a variation actually is…

What is a Building Variation?

A variation is any change to your builder's scope of works after your building contract has been executed.

Variations incur additional costs (or credits!) to the build price agreed with your builder. They may also impact the building period your builder has agreed to complete your build within.

Here is a list of common variations I see on New Home Builds:

• Increased site setup costs (excavation and groundwork)

• Provisional or PC Sum overspend

• Permit fees

• Design errors or omissions

• Material change due to supply chain shortages

• Compliance works

• Design changes

Will changes to my New Home Build design be a variation?

The rule of thumb with home building variations is that:

• Changes made before the contract is signed won't be a variation.

• Changes made after the contract is signed will be a variation.

After your contract has been signed, try to avoid making changes at all costs. Even the slightest change, entitles your builder to request an extension of time to increase the building period, plus payment of the additional costs to complete the variation.

If you make the change before signing your contract, triple-check that the change is reflected clearly in your building contract before you sign.

Pro Tip: If there is something you know needs to change, incorporate it into the agreement with your builder before signing the building contract. If that’s not possible, let your builder know about the anticipated change and ask for written advice on what the cost, and time impacts will be to make the change after the building contract is signed.

When are variations paid?

Depending on your bank your variations will either be funded by your bank (loan) or out of your own funds (cash).

Your building contract specifies when variations need to be paid, which is usually within the following progress payment after the change has been made.

How to minimise variations during your build?

Here are my tips to minimise unwanted variations during your new home build:

1. Have a list ready to go of ‘nice to haves’, these are things you are willing to remove from the build to achieve a cost-neutral offset against the new variation cost. Some credit variation ideas include:

   1. Blinds

   2. Curtains

   3. Cabinetry fit-outs (wardrobes / linen)

   4. Fencing / outdoor works

   I’ve recommended these as they can be easily DIY’d or completed in the future after handover.

2. Look at your drawings carefully before signing the building contract - even the slightest change after signing can have a big time and cost impact on your build.

3. Set aside 10% of your total budget as an emergency fund for variations during the design and build. It’s there for security when variations crop up throughout the build. If you don't end up needing it by the end of your build, well done!!

I hope these tips help you on your new home-building journey.

Thanks for reading and catch you on my next post 🙂

Annelyse.

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